TCRLA_Public/030218.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

           Tuesday, February 18, 2003, Vol. 4, Issue 34

                           Headlines


A N T I G U A   &   B A R B U D A

LIAT: Significant Shareholder May Create Serious Competition


A R G E N T I N A

TELECOM ARGENTINA: Creditors Disatisfied With Debt Proposal
TELEFONICA DE ARGENTINA: Blames Economy for $1.1B Loss In 2002
* IMF Press Briefing Generally Upbeat on Argentina, Brazil


B R A Z I L

BADEP: Parana Governor Alleges Itau Obtained $205M Illegally
CEMAR: Aneel Delays Wrapping Up Intervention
CEMIG: Considers Investing In New Projects
CEMIG: Chairman Remains Mum Over Shareholder Legal Dispute
COPEL: Poor Cash Flow Prompts Moody's Ratings Cut

ELETROPAULO: BNDES Decision Expected By March
EMBRATEL: Highest Bidder In 3.5GHz Spectrum Auction
GUARANIANA: Discord Among Shareholders May Cause Default
SANEPAR: Parana Head Revokes Vivendi Ownership
SANEPAR: Moody's Downgrades Ratings Following Deal Revocation


C O S T A   R I C A

ICE: Finance Minister Nixes Privatization Despite Squabble


M E X I C O

AVANTEL: CFC Approves Banamex's Stake Sale To Employees
UNEFON: Parent's Stock Up On Positive Expectations


N I C A R A G U A

ENITEL: Government To Sell Remaining 49% Stake This Year


P E R U

VOLCAN: Annual Loss Widens Despite Profits In 4Q02


T R I N I D A D   &   T O B A G O

BWIA: No Further Reductions in Barbados Staff
BWIA: Grounded Planes Exacerbate Losses


V E N E Z U E L A

* Venezuela Sells $32M Of Bonds To Dodge Liquidity Squeeze


     - - - - - - - - - -

=================================
A N T I G U A   &   B A R B U D A
=================================

LIAT: Significant Shareholder May Create Serious Competition
------------------------------------------------------------
LIAT may be threatened with the possibility of having to compete
with Tobago Express, which is 49% owned by LIAT's single largest
shareholder, BWIA. Local reports say that the new competition may
adversely affect LIAT's call for new investors. BWIA continues
competing with LIAT despite its 29% ownership of the latter.

The Antigua Sun recalls that Tobago Express has applied to St.
Vincent aviation authorities for a license to operate in the Port
of Spain - St. Vincent route, which is in direct competition with
LIAT.

The Tobago Express also applied to operate services between St.
Lucia and Barbados, said the newspaper, citing well-placed
sources. The airline has been operating in the Port of Spain -
Grenada route in behalf of BWIA. Tobago Express is using one of
BWIA's three Dash-8-300's in servicing the local airbridge.

LIAT benefited when troubled BWIA pulled out of some of the
routes they shared. Cash-strapped BWIA rationalized its fleet and
laid off some 40 pilots in line with its reorganization plan.
Last month, more than 600 workers were retrenched after the
airline failed to obtain the necessary concessions from unions
representing its workers.

If Tobago Express is granted the license to operate in direct
competition with LIAT, then LIAT, which expects to recover this
coming March may find some serious obstacles. Last year, LIAT
reportedly suffered from predatory pricing practices of another
competitor, the Caribbean Star.

CONTACT:  LIAT Corporate Headquarters
          V.C. Bird International Airport,
          P.O. Box 819,
          St. John's, Antigua West Indies
          Tel. 1 (268) 480-5600/1/2/3/4/5/6
          Fax: 1 (268) 480-5625
          Homepage: http://www.liatairline.com/
          Contacts:
          Garry Cullen, Chief Executive Officer
          David Stuart, Vice President of Marketing

          BRITISH WEST INDIES AIRWAYS
          Phone: + 868 627 2942
          E-mail: mailto:mail@bwee.com
          Home Page: http://www.bwee.com/
          Contacts:
          Conrad Aleong, President and CEO (Trinidad)
          Beatrix Carrington, VP Marketing and Sales (Barbados)
          Paul Schutz, CFO (Trinidad)



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


TELECOM ARGENTINA: Creditors Disatisfied With Debt Proposal
-----------------------------------------------------------
Telecom Argentina's proposal to buy back a portion of US$3.2
billion in defaulted debt failed to stir enthusiasm from
creditors. In fact, a Telecom spokeswoman told Reuters the first
round of meetings with creditors had been "difficult."

"The negotiations are difficult but we are still working
together," the spokeswoman said.

Telecom has said it plans to use US$260 million in cash to buy
back debt. The Company would pay up to 50% of face value, and the
plan may allow it to cancel about US$700 million in debt.

However, according to an El Cronista report, banks including
BankBoston NA and Citigroup Inc. that hold about US$1.2 billion
in Telecom Argentina SA's defaulted debt may call for a
bankruptcy proceeding to set new repayment terms.

Telecom, majority owned by France Telecom SA and Telecom Italia
SpA, had the biggest corporate default in Argentina after the
government defaulted on US$95 billion of debt and devalued the
currency in January 2002.

Telecom shares fell 27 centavos, or 9.8%, to ARS2.50 on the
Buenos Aires Stock Exchange. Its stock had soared nearly 10% on
Wednesday after the buyback offer was made public.

CONTACT:  Telecom Argentina Stet France Telecom SA
          Head Office
          10th Floor
          Alicia Moreau de Justo 50
          Buenos Aires
          Argentina
          1107
          Tel  +54 11 4968 4000
          Fax  +54 11 4313 5842
          Web Site  http://www.telecom.com.ar
          Contacts:
          Juan Carlos Masjoan,  Chairman
          Christian Chauvin, Vice Chairman
          Franco Bertone, Vice Chairman
          Susana Malcorra, Chief Executive


TELEFONICA DE ARGENTINA: Blames Economy for $1.1B Loss In 2002
--------------------------------------------------------------
Telefonica de Argentina, owned by Spain's Telefonica, posted a
ARS3.44-billion ($1.1 billion) loss last year, reports Reuters.
In a statement, the Company attributed the loss to Argentina's
worst-ever economic crisis and a punishing currency devaluation.

The Company said it would distribute "neither profits nor
dividends" related to the irregular 15-month accounting period,
stretching from October 2001 to December 2002, as it aligns its
accounting to the calendar year. Telefonica also disclosed its
net worth for the period was ARS2.39 billion.

Meanwhile, Telefonica is lobbying to have the government allow it
to hike its tariffs, which were frozen and converted to devalued
pesos after the January 2002 devaluation -- measures which
compounded utility firms' efforts to service their dollar debts
abroad.

Telefonica de Argentina also has operations in Spain, Brazil,
Chile, Mexico and Peru providing local exchange, long distance,
residential Internet access and directory publishing services.

Until October 1999, the Company was the exclusive provider of
telecommunications services in southern Argentina and controlled
nearly two-third of the Buenos Aires metropolitan area market.
Telefonica Argentina is now allowed to provide telecommunication
services to northern Argentina, where Telecom Argentina Stet
France Telecom S.A. is the incumbent operator

CONTACT:  TELEFONICA DE ARGENTINA
          Tucuman 1, 18th Floor, 1049
          Buenos Aires, Argentina
          Phone: (212) 688-6840
          Home Page: http://www.telefonica.com.ar
          Contacts:
          Carlos Fernandez-Prida Mendez Nunez, Chairman
          Paul Burton Savoldelli, Vice Chairman
          Fernando Raul Borio, Secretary


* IMF Press Briefing Generally Upbeat on Argentina, Brazil
----------------------------------------------------------
Thomas C. Dawson
Director, External Relations Department
International Monetary Fund
Thursday, February 13, 2003
Washington, D.C.

MR. DAWSON: Ladies and gentlemen, I'm Tom Dawson, Director of
External Relations at the IMF, and this is another of our regular
press briefings.

As is standard practice, the briefing is embargoed until
approximately 15 minutes after conclusion, and we will set the
time there.

I have no prepared remarks to offer today. Would you please
identify yourselves and your affiliations, which is the protocol
we like to follow. Any questions?

QUESTIONER: Can you just give us a status on the mission to
Brazil and Argentina? And specifically on Argentina, there's been
a lot of buzz about whether or not the issue of utility rate
increases is actually under discussion with the IMF, if you'd
address that as well.

MR. DAWSON: As far as Brazil goes, we are certainly very much on
track. We've taken note of and had a brief press line on the
authorities' announcement of their new fiscal targets. And I
think we are looking forward to a good mission. I don't think
there's anything of any news to report. Obviously, the broad
parameters of the program, the performance, have been quite
strong. So I think that augurs well for the mission about to take
place.

As far as Argentina goes, there is a mission. I believe the
latest date that I have on it is the 17th, but that could wind up
being delayed. That was going to be a joint Bank-Fund mission
discussing a number of issues relating to the utility pricing
issue. It is not a negotiating mission about increases. It is
more to deal with frameworks so that everyone has a better sense
of what the rules of the game are and how one might go forward.
So it's more in the nature of a technical assistance mission as
opposed to a negotiating mission. I think that's the best way to
describe it.

QUESTIONER: You talked about Brazil being on track. You didn't
use the same language for Argentina. There's some discussion
apparently from the authorities down there that they really
cannot meet, even if scaled down, an IMF program. What is your
reaction to that?

MR. DAWSON: I haven't actually seen any indication from the
authorities that that is, in fact, the case. The reason I used
that particular language with regard to Brazil is we do, in fact,
have a negotiating review mission going on, and that's sort of
the context in which it's taking place. In Argentina, we are, of
course, at an earlier stage since the program was only recently
approved.

QUESTIONER: Just to follow up, in other words, you say that from
everything the IMF knows at this time, the Argentine program is
on track?

MR. DAWSON: It certainly seems to be, but let us also remember it
was only recently approved, and at this point, we are engaged in
contact with the authorities on a number of issues. As I think
everyone knows, Minister Lavagna was here last Friday, I believe.

I don't think it's particularly useful to check in on a weekly or
even biweekly basis on status on programs because simply the
developments don't happen that quickly. Again, in the context of
Brazil, we are at a point where there's a review mission about to
take place. But I think they're just at different stages in their
different programs.

QUESTIONER: Could you update us on the Fund's mission in Uruguay?
And, in the last briefing you said that the Fund was concerned
about the Uruguayan debt. Do you think that the Uruguayan
Government can make an ordered debt restructure?

MR. DAWSON: That is actually not quite what I said in the last
briefing. I indicated that debt was one of the issues being
discussed, and indeed it is. The mission is still in Montevideo.
It continues at a pretty intensive level. Progress is being made,
and it remains our goal to try to work out an agreement that
helps them get back to a sustained growth path. I don't think it
is appropriate, since the negotiations are going on, discussing
details of the program. But as I say, progress is being made, you
know, and when I make that statement, that is a statement that's
referenced back to my last briefing two weeks ago. So as between
then and now, progress has been made.

QUESTIONER: But you actually said that the debt was a significant
burden.

MR. DAWSON: That is a fact. But I stressed then and I stress now,
that is not the only issue that is in the program under
negotiation. That's why I would not highlight it, and I made that
point last time. And I'll repeat that point this time.

QUESTIONER: I just wanted to ask because I know that Mr. Aninat
was discussing this issue yesterday with the leader of the
Uruguayan opposition here in Washington.

MR. DAWSON: I do understand there was a meeting, but I was not
part of the meeting. I don't think it would really be appropriate
talking about the content of the meeting. But that is true, he
did have a meeting with them.

QUESTIONER: For the sake of clarification, what are the dates,
beginning and ending, for the missions to Brazil and Turkey? And
would you please offer an assessment of the Turkish program at
this time?

MR. DAWSON: On Turkey, I don't have an end date, but that is not
unusual. The mission is discussing the 2003 budget plans with the
authorities, particularly with a view toward achieving the 6.5
percent primary surplus target, which we continue to view as a
good and appropriate target and an achievable target. So I think
I would leave it at that.

I think we have a pretty good record in terms of the missions in
Turkey that when they do wrap up it's made clear. We usually have
mission-ending statements, sometimes press briefings, and we'll
keep you informed on that.

On Brazil, the mission is there right now doing the second review
of the program and Article IV consultations. The mission will be
working for two and a half weeks.

QUESTIONER: In its last World Economic Outlook, the IMF assumed
that there will be an average oil price of $24 per barrel. It's
been much higher for weeks now. How far does an imminent war
against Iraq change the scenario of world economics?

MR. DAWSON: Well, we will be in a little more than a month
discussing on our own the World Economic Outlook, and then it
will be a subject for discussion at the middle of April for the
Spring Meetings. So I don't think it's appropriate for me to pre-
empt that.

I believe the last WEO indicated and Ken Rogoff is talking about
certain rules of thumb about the impact of higher oil prices if
they are sustained on global growth prospects. And I think I
would direct you back to that, and I don't have the number quite
in my mind, but we can get it for you. But there are certain
rules of thumb that-I believe it was triggered to what a
sustained increase of $5 a barrel would have in terms of growth
prospects over the longer term. But it does indeed need to be
sustained. And I do not expect-we are not in a situation where we
will be putting out a revised WEO or anything like that. We are
reasonably close to having the actual WEO Board discussion and
then release of the WEO and WEO press conference.

QUESTIONER: Minister Lavagna in Argentina has said that his
government entered into some technical agreements with the IMF
separate from the letter of intent, and that one of the issues
covered by one of the agreements is utility prices. I'm
wondering: What other issues are covered by these agreements, and
why were these issues treated in this way and not in the letter
of intent?

MR. DAWSON: We do not discuss what is or is not or when there is
or is not a so-called side letter. That is usually the term of
art for when there is a non-public aspect of an agreement.

On the other hand, I would direct you to the discussion of the
issue of side letters and our policy on side letters and when
they are appropriate and when they take place. And that was the
subject of a fairly extensive series of Board meetings that
culminated with a PIN, I believe around September 27th, I think,
approximately. It was a discussion of IMF transparency policy.
And if you go in there, you can see the circumstances under which
the Board and the authorities have these so-called side letters.

But I'm not in a position to talk about the position of Argentina
or of any other country that may or may not have had a side
letter. Just so you want to know, because I learned a little bit
about our website yesterday. If you just go on to the website, go
into the transparency discussion, or actually you can search
"side letter," then find the September document. There is both a
PIN, but there is also the underlying Board document which goes
into a reasonable amount of more detail about what a side letter
is. It's a longstanding practice in the Fund. There have been
them, although they are not very common.

QUESTIONER: Why the IMF didn't show yet the Argentinean last
report? And the second question will be: What do you expect for
the mission that will take place next week in Argentina also with
the World Bank?

MR. DAWSON: As I indicated at the very beginning, as far as the
latter part of the question first, it's a mission to go down to
talk about issues that involve the issues of utility pricing. It
is not, however, a negotiating mission, as I understand it.

Staff reports are only published when it is agreed to with the
authorities. I'll just leave it at that. We do not automatically
publish staff reports. They have to be agreed.

I just see back there, next to Francisco, Sergio Serrichio,
having just arrived to hear his successor ask a question. And I
understand he's returning to Argentina next week. I'm authorized
to say several soccer-sorry, football teams in Washington will be
missing Sergio's participation, including, I understand, that he
was-and this may not be suitable to be reported back to Buenos
Aires-apparently a member of the Washington Consensus, but which,
I will quickly add, was a soccer/football team. Sergio, you will
be missed. Now we can go back to business. Or are we finished
with business?

QUESTIONER: There was a report this morning suggesting that there
is a joint World Bank-IMF study of the voting power balances
between various regions and nations around the world. My
understanding was that the management had submitted to the Boards
a report and there was some discussion on this among the Board.

MR. DAWSON: Yeah, let me describe what I think the process is.
The process is that the Development Committee last September
asked that the staffs of the two institutions take a look at
issues regarding voting and representation in the institutions,
and that was a report that will be, as far as I know, presented
to the Development Committee at the meeting at the middle of
April.

The paper has not been discussed at the Fund Board. I honestly
don't know whether it's been discussed at the Bank Board or not.
I don't think it has, but that will be an issue that will be
discussed in the meetings in the middle of April.

The format of it is typically for reports to the Development
Committee-they are jointly prepared by the staff of the Fund and
the Bank, reviewed by the two Boards, and then submitted to the
Committee. It's my understanding that we're in the process of
preparing it. So the story that you referred to this morning,
while it was readable and interesting, I think this is a work in
progress. The report has not been submitted for final approval by
management.

Thank you very much. We'll adjourn and embargoed until 10 minutes
after 10:00. And the expectation is that the next press briefing
would be on Tuesday, March the 4th.

Thank you very much.

CONTACT:  IMF EXTERNAL RELATIONS DEPARTMENT
          Public Affairs:
          Tel: 202-623-7300
          Fax: 202-623-6278

          Media Relations:
          Tel: 202-623-7100
          Fax: 202-623-6772



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

BADEP: Parana Governor Alleges Itau Obtained $205M Illegally
------------------------------------------------------------
Brazil's second largest private bank, Banco Itau was accused of
illegally getting BRL750 million (US$205 million) from former
state bank BADEP, according to a report by local paper Valor
Economica. Roberto Requiao, governor of the Brazilian state of
Parana, challenged Itau's acquisition of the exclusive right to
handle the state's payrolls and bank accounts for five years.

Prior to Itau's purchase of Parana state bank Banestado in 2000,
the state's development bank Badep folded and its operations were
transferred to Banestado, says Business News Americas.

But the governor claims that Badep's loan portfolio belongs to
the state, and not to Banestado. He asserts that it should not
have been transferred to Itau.

Mr. Requiao, who reportedly supplied evidence supporting his
statements in court, said, "Itau sold those credits to Goldmann
Sachs, which is charging the bonds through its company's Rio
Araguaia and Rio Parana."

CONTACT:  BANCO ITAU, S.A.
          Rua Boa Vista, 176
          01014-919 Sao Paulo, Brazil
          Phone: +55-11-237-3000
          Fax: +55-11-5582-1133
          Home Page: http://www.itau.com.br
          Contacts:
          Olavo Egydio Setubal, Chairman of the Board
          Roberto Egydio Setubal, President and CEO

          Geraldo Soares, Investor Relations Superintendent
          Pra‡a Alfredo Egydio de Souza Aranha, 100
          Torre Concei‡ao - 11§ andar
          04344-902 - Sao Paulo - SP
          Phone: +5511 5019-1549
          Fax: +5511 5019-1133


CEMAR: Aneel Delays Wrapping Up Intervention
--------------------------------------------
Brazil's power regulator Aneel was supposed to conclude its
intervention in Maranhao state power company Cemar on February
17. However, according to a Business News Americas report, the
regulator extended the intervention for 180 days to allow more
time to resolve Cemar's financial difficulties.

Aneel intervened in Cemar in August 2002, 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 to an
investor that would offer the best financial solution to Cemar's
debts.

However, Aneel's efforts have been hampered by the legal
injunctions filed by Stiu-MA - the local utility workers' union -
and the federal public ministry, which oppose the sale.

According to Stiu-MA President Fernando Pereira, the union is
advocating a federal takeover of Cemar and does not want to risk
the "lottery" of a private partner again, as it has already
failed once. The union said Cemar's debt jumped from BRL200
million to BRL800 million, while service has deteriorated.

Aneel is still working to overturn the injunctions and continue
with the sale.

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


CEMIG: Considers Investing In New Projects
------------------------------------------
Wilson Brumer, chairman of Brazil's Minas Gerais state power
company, Cemig, recently declared "crisis always brings
opportunities." In a Business News Americas report, Mr. Brumer
said the Company will examine the possibility of investing in
generation projects beyond its traditional operating area of
Minas Gerais.

The Company has plenty of experience in putting together such
projects. With the problems currently facing the sector and many
of its largest players, Cemig is well positioned to examine new
projects and partnerships with other companies.

To this end, the new state government is committed to developing
the most transparent relationship with its partners in Cemig,
according to Mr. Brumer, who is also the economic development
secretary for the new Minas Gerais state government.

CONTACT:  Companhia Energetica de Minas Gerais
          Luiz Fernando Rolla, Investor Relations Officer
          Tel: +55-31-3299-3930
          Fax: +55-31-3299-3933
          lrolla@cemig.com.br


CEMIG: Chairman Remains Mum Over Shareholder Legal Dispute
----------------------------------------------------------
Cemig chairman Wilson Brumer maintains his silence about an
ongoing legal action between US-based AES and Brazil's
Opportunity over a shareholders agreement that was cancelled by
former governor Itamar Franco.

Franco reversed an agreement that gave AES and Opportunity
operating control, despite not owning a majority of Cemig's
ordinary shares. Franco obtained a ruling from a local court
declaring the shareholders' agreement illegal and proceeded to
take back operating control.

"We must await a judicial decision," Mr. Brumer said.

But on a day-to-day basis, the relationship with the partners on
the board is "cordial", he said, adding that all were agreed on
the common objective of adding value to the Company.

As part of its plans to resolve its debts with Cemig, the Minas
Gerais government has agreed to return all dividends directly to
the Company, Mr. Brumer said. Further talks are underway with the
federal government to resolve a remaining portion of the debts,
he added.


COPEL: Poor Cash Flow Prompts Moody's Ratings Cut
-------------------------------------------------
Moody's Investors Service downgraded the credit ratings of Cia.
Paranaense de Energia (COPEL), Brazil's second largest power
generator and distributor.

The ratings affected were:

- BRL500 million senior unsecured debentures due 2007: downgraded
to Baa1.br from Aa2.br (Brazilian National Scale) and to Ba3 from
Ba1 (Global Local Currency Scale);

- Issuer rating: downgraded to Baa1.br from Aa2.br (Brazilian
National Scale) and to Ba3 from Ba1 (Global Local Currency Scale)

The rating outlook is negative.

"The revised ratings reflect Copel's expected low level of cash
flow relative to its debt burden, the sizeable portion of its
debt denominated in foreign currency and uncertainties related to
the policies of the new government in the state of Parana,"
Moody's said in a report.

As of Sep. 30, 2002, COPEL's total debt is approximately BRL 2.2
billion, about 54% of which is denominated or linked to US
dollars, which proportionately affects COPEL's leverage and debt
service requirements due to the absence of hedging mechanisms,
Moody's said.

Moody's recalled that in the first three quarters of 2002,
despite a 21% increase in net revenues compared to the equivalent
period in 2001, the devaluation of the Real and higher interest
expense were key factors driving COPEL's nine-month net loss of
BRL(49.8) million, compared to a net income of BRL89.3 million in
the prior comparable period.

Moody's cited the possibility of "politically motivated
decisions" as one reason it is more inclined to lower Copel's
rating further.

CONTACT:  COPEL (in Brazil)
          Othon Mader Ribas
          Tel. 011-5541-222-2027
          Email: othon@copel.com

          Solange Maueler
          Tel. 011-5541-331-4359
          Email: solange@copel.com

          (New York)
          Richard Huber
          Tel. 212-807-5026
          Email: richard.huber@tfn.com

          Isabel Vieira
          Tel. 212-807-5110
          Email: isabel.vieira@tfn.com


ELETROPAULO: BNDES Decision Expected By March
---------------------------------------------
Brazil's national development bank BNDES will announce its
decision regarding the future of Eletropaulo by the end of
February, Business News Americas reports, citing BNDES president
Carlos Lessa. Lessa did not hint at what solution the government
might offer for Eletropaulo's problems.

Eletropaulo is now considered technically bankrupt after failing
to pay in January an US$85-million tranche of loans owed the
BNDES.

The executives of AES Corp. have hinted that the US-based parent,
which is also battling its own financial troubles, may simply
hand Eletropaulo back to the government rather than attempt to
renegotiate debts. AES bought Eletropaulo from the government as
part of a year 2000 privatization program.

"The disposal of the Eletropaulo question is not solely up to the
BNDES. It involves much more. I'm on the phone to the energy
ministry every day about this," Lessa said.

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


EMBRATEL: Highest Bidder In 3.5GHz Spectrum Auction
---------------------------------------------------
Brazilian incumbent long distance operator Embratel emerged as
the biggest bidder in last Tuesday's 3.5GHz spectrum auction,
Business News Americas reports. The operator paid BRL13.2 million
(US$3.61) in total for the three licenses, which together cover
the entire country.

According to Embratel operations and engineering VP Ivan
Campagnolli, the Company plans to make use of the licenses before
the end of June. Embratel will use the licenses to increase its
last-mile coverage nationwide via point to multi-point Broadband
Wireless Access (BWA) technology, he said.

Meanwhile, Embratel also gained authorization for further
expansion in the metro areas of Sao Paulo and Rio de Janeiro.

Embratel launched local telephony services in 4Q02, targeting the
corporate segment. The Company ended 2002 with more than 300
local telephony clients and expects to have the service in 29
cities by the end of the first quarter this year.

To see Income Statement:
http://bankrupt.com/misc/Income_Statement.htm
To see Balance Sheet: http://bankrupt.com/misc/Balance_Sheet.htm

CONTACT:  Embratel Participacoes S.A.
          Silvia Pereira, Investor Relations Manager
          Tel: 55 21 2121-6474/9662 (messages)
          Email: Silvia.Pereira@embratel.com.br
          invest@embratel.com.br


GUARANIANA: Discord Among Shareholders May Cause Default
--------------------------------------------------------
Guaraniana SA is likely to default with the Brazilian development
bank BNDES, to which it owes BRL400 million (BRL130 million will
fall due this year), reports Gazeta Mercantil. All the Company's
shareholders but one have agreed to a BRL361 million capital
injection. Shareholders consenting to the plan include Previ and
BBI (Banco do Brasil Investimentos). Meanwhile Spanish group
Iberdrola is expected to veto the proposal.

Iberdrola earlier announced its plans to reduce its investments
in Brazil by EUR400 million.

Guaraniana claimed it has been working to roll over its BRL4.6
billion debts. In 2002, it refinanced BRL450 million debts for
three years.


SANEPAR: Parana Head Revokes Vivendi Ownership
----------------------------------------------
Brazil's seventh- most populous state, Parana, took back control
of state water utility SANEPAR from French group Vivendi
Environnement SA following complaints about both poor water
quality and under-investment.

Parana owns 60% of SANEPAR with the balance owned by Domino
Holdings, a group comprising Vivendi, asset management firm
Opportunity and Brazilian builder Andrade Gutierrez SA. But even
with just 40% ownership, a deal with the previous governor gave
them power over staffing, loans, deals with shareholders and
final say over tariffs.

Recently however, the state's newly elected governor, Roberto
Requiao, annulled the four-year-old agreement, claiming that
Vivendi and the other shareholders have raised prices to boost
profits while water quality in cities such as the state capital
Curitiba is "doubtful."

"[The state government] understands that sanitation is not an
activity to make a profit but a social service," a spokesman for
Sanepar said.

Requiao also said that his predecessor never signed the relevant
decree.

The revocation of the agreement sent worrying signals for foreign
investors - just as new President Lula da Silva is trying to woo
them back after a rocky 2002 for the Brazilian economy, a source
close to SANEPAR told Reuters.

"No one puts money into a Brazilian company without getting some
control," the source said. "Changing the rules of the game now
that everyone has invested makes no sense."


SANEPAR: Moody's Downgrades Ratings Following Deal Revocation
-------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Parana state
water utility SANEPAR. The ratings downgraded include SANEPAR's
National Scale Rating to Baa3.br from A3.br (Brazil National
Scale), debentures to B1 from Ba3 (Global Local Currency Scale),
and Issuer Rating to B1 from Ba3 (Global Local Currency Scale).
This concludes the review for downgrade.

The rating outlook is negative.

The downgrades came after Parana Governor Roberto Requiao revoked
a shareholders agreement that gave management of SANEPAR to
Vivendi, the world's largest water company, and the other private
shareholders.

Should the Governor prevail, it is Moody's view that SANEPAR will
be less financially and operationally autonomous than was
previously the case. This could negatively affect the company's
credit quality and result in more limited sources of financing.
In the current environment in Brazil, Moody's sees this risk as
increasing.

SANEPAR's outlook is negative. Future direction will focus on the
financial impact of the governor's plans and management changes
for the Company, its financial and operating performance, and the
degree to which it maintains financial independence from its
public owner.

CONTACT:  Moody's Investors Service, New York
          Daniel Gates, Managing Director
          Corporate Finance Group
          JOURNALISTS: 212-553-0376
          SUBSCRIBERS: 212-553-1653

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



===================
C O S T A   R I C A
===================

ICE: Finance Minister Nixes Privatization Despite Squabble
----------------------------------------------------------
Costa Rican Finance Minister Jorge Walter Bolanos said that the
country would not push for the privatization of state electric
power and telecom monopoly ICE. The announcement comes despite a
misunderstanding between the Company and the government over
ICE's budget, Local paper Diario Extra reports.

Business News Americas recalls that the Company asked for a 64%
budgetary increase this year. Mr. Bolanos said the Company could
push the country into an economic crisis if it insists on the
said increase.

Other public institutions have to settle for a 5.9% increase.

ICE, which has four business units: ICE Electricidad and CNFL,
Grupo ICE Telecomunicaciones and RACSA, threatened to stage a
strike today if the government fails to make an acceptable offer.
The Company's union turned down the government's last offer.
Earlier, the Company and FIT union proposed to cut the budget by
CRC41 billion.  The government planned to cut the Company's 2003
budget by CRC156 billion.

Mr. Bolanos said, "The needs of ICE are just as important as
health and education, but we can't take new loans and get into
deeper debt which will be passed on to the next generation."

"The government does not want to debilitate ICE, and we want the
economic health of the country, but we don't want a poor country
and a rich institution...public institutions should be our best
allies," he continued, adding that investors are losing
confidence in the country.

Leaders of FIT union walked out of a meeting with the government
last Monday. The meeting lasted for only one and a half hours.
Negotiations over the budget proposal have been going on for five
months, reports Business News Americas.



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

AVANTEL: CFC Approves Banamex's Stake Sale To Employees
-------------------------------------------------------
Mexico's biggest bank Banamex obtained authorization from the
country's antitrust commission, the CFC, to sell shares of
subsidiary Promotora Banamex to its employees, reports Business
News Americas. The sale is part of a strategy to put Mexican
phone company Avantel's ownership in line with the federal laws
that limit foreign ownership of certain types of telecoms
companies. Promotora Banamex controlled Avantel.

Banamex ownership in Avantel spurred conflict in August 2001 when
Citigroup acquired Banamex, causing the telco to contravene laws
that limit foreign ownership to 49%. Banamex has a 55% stake in
Avantel and US-based Worldcom has the other 45%.

In November 2002, the economy ministry provisionally approved
Banamex's plan to transfer 51% of Avantel to the bank's 31,000
employees. The bank is looking to include Avantel's 2,500 workers
in its so-called "Mexicanization" restructuring program, which
requires an agreement with WorldCom.

Under the Mexicanization program, the bank would dilute is equity
stake but maintain 49% of voting rights.

"Since none of the new shareholders will have a stake of more
than 5%, and it is unlikely that they will have a significant
stake in any of Avantel's competitors, the operation announced is
not expected to have an effect on the competition in the
communications market," the commission explained.

CONTACT:  AVANTEL SERVICIOS LOCALES, S.A. (AVANTEL LOCAL)
          Reforma No. 265, 6o piso, Col.
          Cuauhtemoc, 06500, M,xico, D.F.
          Tel: 5242-1004
          Fax: 5242-1060
          Home Page: www.avantel.com.mx/

          WORLDCOM
          500 Clinton Center Drive
          Clinton, MS 39056
          1-877-624-9266
          Phone: (601) 460-5600
          Fax: (601) 460-8350
          E-mail: http://www.worldcom.com/
          Contact:
          John Sidgmore, President and CEO


UNEFON: Parent's Stock Up On Positive Expectations
--------------------------------------------------
TV Azteca, which is seeking to rebuild investor confidence
following its purchase of a stake in the money-losing wireless
phone company, Unefon SA, has seen a 10% increase in its stock
since February 4, reports Bloomberg.

The report says that the boost came after the Company, Mexico's
second-largest broadcaster, told analysts in briefings that it
would report that sales rose and costs fell more than expected in
the fourth quarter.

Matthieu Coppet, an analyst at UBS Warburg in New York, who was
briefed by telephone disclosed that TV Azteca will report that
sales rose 2.3% to MXN2.0 billion, or US$190 million, based on
the average exchange rate during the quarter.

Coppet said that substituting reality TV for soap operas lowered
programming costs to lift earnings before interest, taxes,
depreciation and amortization, or Ebitda, to MXN1.1 billion. That
compares with MXN945 million a year ago.

TV Azteca said net income fell to MXN640 million, from MXN675
million, on higher financing costs, analysts who were briefed
said. Adjusted for accounting changes, Johnson calculated that
net income was MXN502 million.

"The Ebitda margin of 56 percent is extremely high," said Coppet,
who has a 'buy' rating on the stock. "In a sense, the Mexican
business is a cash cow."

Coppet expects costs to rise again in the coming quarters as the
company invests more in soap operas.

Meanwhile, TV Azteca's earlier announcement that it would use
cash to reduce debt and issue dividends to shareholders had
encouraged investors that TV Azteca wants to bolster investor
confidence, said Christopher Palmer, who manages about US$225
million of Latin American funds at Gartmore Investment Management
in London, including TV Azteca stock.

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

          UNEFON S.A. DE CV
          Head Office
          EdificioA
          Puriferico Sur 4119 Fuentes del
          Pedregal
          Mexico
          DF
          Mexico 14141
          Tel: +52 8582 50000
          Fax: +52 8582 5052
          Web site: http://www.unefon.com.mx/
          Contacts:
          Engr Moises M. Saba, Chairman
          Pedro L. Padilla, Vice Chairman



=================
N I C A R A G U A
=================

ENITEL: Government To Sell Remaining 49% Stake This Year
--------------------------------------------------------
Nicaragua's incumbent telco Enitel is to become a fully
privatized company this year if the government proceeds with its
plans to sell off its 49% stake in the Company. Citing Enitel's
CEO, Carlos Ramos, Nicaraguan daily La Prensa reports that the
stake has been valued at US$50 million.

Enitel became partially privatized in 2001 when the Swedish-
Honduran consortium Megatel bought the government's 40 stake in
the Company. Sweden's Telia Swedtel and Honduran electricity
company EMCE paid US$33 million for the stake and will pay US$10
million each year through mid-2005 to pay for a five-year
management contract.

Before privatization, the international accountancy
Pricewaterhouse Coopers valued Enitel at around US$200 million -
meaning the 40% stake acquired by Megatel should have been worth
US$80 million, and the government's stake almost US$100 million.

According to Mr. Ramos, Enitel's operating efficiency has
improved since privatization, thanks to Megatel's efforts.



=======
P E R U
=======

VOLCAN: Annual Loss Widens Despite Profits In 4Q02
--------------------------------------------------
Peruvian zinc miner Volcan Cia. Minera S.A. posted  net income of
PEN8.8 million (US$2.5 million) for the last quarter of 2002. In
comparison, the Company lost PEN15.9 million in the same period
in 2001. The results were filed in the Lima Stock Exchange.

Since 2000, the Company has not posted an annual profit, said the
report. This year, the Company's losses went up to PEN40.7
million from PEN35.2 million in 2001.

Bloomberg attributed the Company's improved performance in the
fourth quarter on the foreign exchange rated and an extraordinary
gain.

A 3.3% increase in the Peruvian Sol in the fourth quarter gave
the Company a PEN20 million gain. In the year before that,
currency loss was posted at PEN900,000. Bloomberg explained that
the Company's debts are dollar-denominated, so an increase in the
local currency reduced the book value of its debts.

Luis Bravo an analyst from Centura SAB brokerage said the Company
recorded PEN20 million extraordinary gain that was "linked to the
November sale of stockpiles", to Pan American Silver Corporation
of Canada. He had anticipated the Company to report a US$700,000
loss in that period.

In the meantime, revenues went down by 12%, to PEN128 million
soles. According to Mr. Bravo the Company needs zinc prices to be
at least US$850 per metric ton to be profitable. During the
period concerned, zinc was traded at only US$786 per metric ton
in the London Metal Exchange.

CONTACT:  COMPANIA MINERA VOLCAN
          Av Gregorio Escobedo
          710 Jesus Mara
          Lima, Peru
          Tel: +51 1 219-4000
          Fax: +51 1 261-9716
          Contact:
          Mr. FMG Sayan (Francisco), Chairperson



=================================
T R I N I D A D   &   T O B A G O
=================================

BWIA: No Further Reductions in Barbados Staff
---------------------------------------------
Cash strapped British West Indies Airways (BWIA) said it has no
plans of trimming its staff in Barbados, relates local paper the
Barbados Nation. BWIA chief executive Conrad Aleong confirmed
that only one employee from Barbados was retrenched, compared to
more than 600 from Trinidad.

Beatrice Carrington, the airline's vice-president for sales and
marketing, BWIA employs 50 baggage handlers, 11 people in
reservations, seven duty officers at the airport, four people in
sales and another four in worldwide marketing.

"Barbados is very strategic to BWIA's operations. Trinidad is the
home-base but our commercial headquarters are here in Barbados,"
said Mr. Aleong, adding that Bridgetown was an important center
in the airline's operations and they were committed to Barbados.

The airline had not reduced its operations in Barbados even after
the September 11 attacks caused a massive decline in the global
airline industry.

Barbados' Minister of International Transport Noel Lynch said
that t he airline has made no financial commitments to the
country, but would continue to give marketing support.

CONTACT:  British West Indies Airways
          Phone: + 868 627 2942
          E-mail: mailto:mail@bwee.com
          Home Page: http://www.bwee.com/
          Contacts:
          Conrad Aleong, President and CEO (Trinidad)
          Beatrix Carrington, VP Marketing and Sales (Barbados)
          Paul Schutz, CFO (Trinidad)


BWIA: Grounded Planes Exacerbate Losses
---------------------------------------
Trinidadian airline BWIA is troubled by two turbo prop planes its
has grounded. According to the Antigua Sun, BWIA is saddled with
the unwanted burden of having to pay the leases on the planes
even though they're not airworthy.

The local paper cites sources in the industry, saying that one of
the planes costs BWIA about US$90,000 per month, and another
US$110,000 for the other. The sources further said that the
market values of the two planes are in the range of US$50,000 to
US$65,000 per month.

BWIA, which reported a 2002 net loss of US$28 million, is hard-
pressed to find other operators to assume the leases on the two
planes.


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

* Venezuela Sells $32M Of Bonds To Dodge Liquidity Squeeze
----------------------------------------------------------
Venezuela sold VEB52 billion (US$32 million) of bonds, according
to the country's central bank. A Bloomberg report said the move
is part of the country's efforts to avoid a cash crunch as about
VEB200 billion of three-year bonds came due yesterday.

The securities sold, which offer a yield of between 31% and 36%,
would mature between 161 and 342 days. The country faces about
VEB4 trillion of domestic debt coming due this year.

On Friday, the government also sold about VEB16 billion of 89-,
152-, and 215- day bonds to yield between 39.6% and 43.5%.

Venezuela swapped about 34% of bonds offered when it sold US$2.7
billion in domestic debt last year and another US$283 million
last month to reduce its budget deficit, the report reveals.

Benito Berber, an analyst from IDEAglobal said, "Banks will
continue to buy debt from the government since it's their most
important client.  But political instability has led to a big
decrease in the maturity of the debt the government is placing."

Political unrest in Venezuela reduced government revenue as
workers for state oil company PdVSA participated in a strike
aimed at deposing President Hugo Chavez. Earlier reports said
that oil production was slashed by as much as 90%. Venezuela is
the world's fifth largest oil producer.



               ***********


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
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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is $575 per half-year,
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