TCRLA_Public/030228.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

                   L A T I N   A M E R I C A

           Friday, February 28, 2003, Vol. 4, Issue 42

                           Headlines

A R G E N T I N A

ARGENTINE BANKS: May Get $2.64B in Government Compensation
ARGENTINE UTILITIES: Government To Appeal Court Ruling
CENTRAL COSTANERA: Requesting Loan Term's Extension
PECOM ENERGIA: Plans To Issue Dollar Bonds


B E R M U D A

ANNUITY & LIFE: A.M. Best Downgrades Ratings
ANNUITY & LIFE: Fitch Lowers IFS Rating to 'CC'
GLOBAL CROSSING: U.S. Orders Asian Buyers to Resubmit Bid
GLOBAL CROSSING: IDT Plans to Bid For Assets


B O L I V I A

* Republic of Bolivia Ratings Lowered; Outlook Still Negative


B R A Z I L

BCP: Telemar Will Take Control But With 70% Discount on Debt Load
ELETROPAULO METROPOLITANA: Previ Denies Investment Inclinations
TERRA LYCOS: Writes Down EUR1.4B in Assets

* World Bank Grants Brazil $505M Loan


C H I L E

ENERSIS: Renegotiates Debt With Creditor Banks
ENERSIS: Parent Endesa Releases 2002 Consolidated Results
SANTA ISABEL: Cencosud To Proceed With Purchase


C O L O M B I A

PAZ DEL RIO: University To Produce Report In A Fortnight
SEVEN SEAS: Announces Closing of Producing Properties' Sale


C O S T A   R I C A

ICE: Signs DSL Routers Agreement With GBM


J A M A I C A

AIR JAMAICA: COO & President Leaves Post


M E X I C O

BANCO INTERNACIONAL: New York Unit Voluntarily Liquidates Assets
VITRO: Reports Unaudited Fourth Quarter And Fiscal 2002 Results


P A R A G U A Y

* Paraguay Reaches Debt Deal With International Creditor Banks


U R U G U A Y

BANCO DE CREDITO: St. George Rejects Offer To Take Back Control
BNL: Exiting Uruguay Due to Low Profitability


V E N E Z U E L A

CERRO NEGRO: Resumes Operations on Smaller Scale
CITGO: Reduces 2003 Capex By US$200 Million
CITGO: Notes Recent Developments and Risks in 8-K Filing

     -  -  -  -  -  -  -  -  -

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

ARGENTINE BANKS: May Get $2.64B in Government Compensation
----------------------------------------------------------
Argentine economy minister Roberto Lavagna revealed that the
government is negotiating a financial compensation package with
local banks, reports Business News Americas. The US$2.64 billion
package is designed to compensate for the banks' losses caused by
the conversion of dollar-denominated deposits into pesos at below
market rates last year.

On Wednesday, Mr. Lavagna was scheduled to meet with
representatives from the banks to establish the compensation
package guidelines. The package is part of the government's
agreement with the International Monetary Fund, after obtaining
to permission to delay payments on US$6.8 billion in debt for
three to five years.

However, Mr. Lavagna did not indicate what form the compensation
will take.

Foreign and domestic banks in the country have begun returning
deposits to the public. Some analysts see this as a sign of the
foreign banks' commitment to stay in the country. But BNAmericas
said that banks fear that the Supreme Court might order them to
return former dollar-denominated deposits in dollars.

The Supreme Court is expected to decide on the redolarization of
US$247 million in deposits in Banco Nacion on March 4. The bank
said that it might pay up to US$400 million if it loses the case.


ARGENTINE UTILITIES: Government To Appeal Court Ruling
------------------------------------------------------
Argentine President Eduardo Duhalde confirmed reports that the
government would appeal a court decision that blocks a utility
rates hike decree declared last month. Judge Claudia Rodriguez
Vidal ruled on Tuesday that the government could not order rate
increases until after the renegotiation of contracts with
privatized utility companies is completed, reports Dow Jones.

"We know that there is a decision and, of course, we'll appeal.
We must think about the risk this situation creates. My
government is only around for two more months, but the next
government could suffer problems [surrounding] maintenance of and
investment in the public services," said Mr. Duhalde.

The decree would have allowed electricity companies to raise
their rates by 9 percent, while the allowed increase for natural
gas prices would have been 7 percent. This is the second decree
allowing utility companies to raise their rates, and like the
first one, has been blocked by Argentine courts, saying it the
decree is unconstitutional.

However, consumer groups are confident that even if the
government won an appeal, it would hardly have enough time left
to implement the rate increases.

Utility companies in the country had been hoping for a rate
increase of as much as 30 percent, after having no increases in
the previous year. A number of companies with dollar denominated
debts were pushed to the brink of bankruptcy after the local
currency declined by about 70 percent.

The decree was issued to satisfy one of the International
Monetary Fund's requirements for granting aid. Argentina lost all
its credit lines, except for the IMF, after it defaulted on a
record US$95 billion in debt in December 2001. Last month, the
country received permission to delay payments for about three to
five years on about US$6.8 billion in debt to the IMF.


CENTRAL COSTANERA: Requesting Loan Term's Extension
---------------------------------------------------
Argentina thermo generator Central Costanera asked six banks to
accept a Siemens combined cycle unit as guarantee for extending
the terms of a US$95-million loan until December 2004 from June
30, 2003.

The banks are BBVA, BankBoston, Bank of America, HSBC, Scotiabank
and the Latin American Export Bank.

According to the terms of the new agreement, the loan, issued on
July 12, 2000, will be paid back in quarterly installments from
June 2003 to December 2004. Interest will be charged at a 90-day
rate of Libor plus 4.4%-4.9% a year.

Central Costanera has agreed to defer dividend payments until the
loan is paid in full.

The Company plunged into red last year with a loss of ARS27.2
million (US$8.1 million) from a profit of ARS600,000 the prior
year. Central Costanera blamed the losses mainly on exposure to
inflation, and the devaluation of the local currency.

Central Costanera, whose net equity was ARS707 million at the end
of 2002, is majority-owned by Chilean generator Endesa Chile.


PECOM ENERGIA: Plans To Issue Dollar Bonds
------------------------------------------
Argentina's Pecom Energia is planning to issue dollar bonds, the
energy group revealed Wednesday, though without giving further
details.

This will be the first time that Pecom will issue dollar bonds
since Brazil's Petrobras buyout of parent company, Perez Companc.

Last year Brazil's state-owned Petrobras bought a 58.6% stake in
Perez Companc, which in turn controls 98.21% of Pecom Energia, in
an operation worth US$3 billion.

CONTACT:  PECOM ENERGIA S.A. DE PEREZ COMPANC S.A.
          Maipo 1 - Piso 22 - C1084ABA
          Buenos Aires, Argentina
          Phone: (54-11) 4344-6000
          Fax: (54-11) 4344-6315
          URL: http://www.pecom.com.ar/
          Contacts:
          Jorge Gregorio C. Perez Companc, Chairman
          Oscar Anibal Vicente, Vice Chairman



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

ANNUITY & LIFE: A.M. Best Downgrades Ratings
--------------------------------------------
A.M. Best Co. has downgraded the financial strength ratings to B+
(Very Good) from B++ (Very Good) of Annuity and Life Re Holdings'
(NYSE: ANR) (Bermuda) life insurance subsidiaries and the
indicative senior debt rating on ANR's $200 million shelf
registration to "b+" from "bbb-". Additionally, all ratings
remain under review with negative implications.

These actions reflect the continued erosion in ANR's earnings
base from its core life insurance and annuity businesses. In
addition, the ratings reflect ANR's recent announcement to cease
writing new business, the execution risk in its restructuring
plans and its lack of financial flexibility. These rating actions
follow ANR's February 24, 2003, announcement that it expects to
report a significant loss in the fourth quarter and for the full
year 2002.

On September 30, 2002, A.M. Best lowered ANR's ratings and placed
them under review with developing implications primarily to
reflect ANR's weakened operating performance, immediate concerns
regarding its ability to meet collateral requirements under bank
credit facilities and an SEC review. Since that time, ANR has
taken actions to improve the quality of its balance sheet and
continues to restructure its collateral funding requirements.
While ANR has not satisfied all its year-end 2002 collateral
requirements, A.M. Best acknowledges that it continues to attempt
to recapture, retrocede or sell additional blocks of life
insurance business to eliminate any unmet requirements. ANR is
also in the process of restating its financial statements as it
seeks to conclude an SEC staff review of the company's prior
public filings.

Although the combined impact of these issues has significantly
reduced ANR's capitalization in 2002, A.M. Best believes that the
company's capital remains adequate to cover its current
obligations to existing policyholders even after the anticipated
restatement of its financial statements. However, A.M. Best does
remain concerned about ANR's ability over the near term to
stabilize its overall financial position, particularly its
collateral funding requirements. Therefore, A.M. Best will
continue to monitor management's efforts to restructure the
company and re-establish it as a going concern. If the company
experiences any additional deterioration in its financial
position, the ratings on ANR could be lowered.

The financial strength ratings have been downgraded to B+ (Very
Good) for the following life subsidiaries of Annuity and Life Re
(Holdings), Ltd.:

-- Annuity and Life Reassurance, Ltd

-- Annuity & Life Reassurance America Inc

The following indicative senior debt rating has been downgraded:

Annuity and Life Re (Holdings), Ltd.--

-- "b+" on senior debt securities available under the $200
million shelf registration

A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. 6 For
more information, visit A.M. Best's Web site at www.ambest.com.


ANNUITY & LIFE: Fitch Lowers IFS Rating to 'CC'
-----------------------------------------------
Fitch Ratings has lowered the insurer financial strength rating
of Annuity & Life Reassurance, Ltd. (ANR) to 'CC' from 'CCC'. The
Rating Watch has been changed to Negative from Evolving.

Wednesday's rating action follows the company's public disclosure
on February 24th of a number of adverse developments related to
its operating performance and financial position. Of particular
concern to Fitch are the company's announcements that it has
ceased writing new business and has notified its existing
reinsurance clients that it cannot accept additional cessions
under previously established treaties, as well as disclosure of
continued adverse mortality and a large number of open claim
submissions. These disclosures, combined with other negative
developments, have led the company to announce that a significant
loss will be reported in the fourth quarter of 2002, and for the
year.

The company also acknowledged that it fell $15 million short of
securing a letter of credit issued in its favor by The
Manufacturers Life Insurance Company. In addition, the company
still has not satisfied year-end 2002 collateral requirements for
the benefit of certain ceding companies.

Being Bermuda-based, ANR is an unauthorized reinsurer in the
U.S., and like all unauthorized reinsurers, it must post
collateral to the benefit of its U.S. ceding companies per U.S.
regulatory requirements. Such collateral can be provided in the
form of trust deposits and/or letters of credit. On November 22,
2002, Fitch downgraded ANR's IFS rating to 'CCC' from 'BBB-'
following the disclosure in ANR's 8-K that the company needed to
raise additional capital to fill a collateral requirement of
between $140 million and $230 million by year-end 2002. While the
company has had some success in lowering its collateral
obligation through various negotiations with ceding companies,
the company reports that it still needs to collateralize or
otherwise eliminate the need to collateralize in excess of $50
million. Further, the company has indicated ultimate collateral
requirements may exceed this amount due to additional losses
reported under certain treaties for which the company is seeking
additional information.

The Rating Watch Negative will remain in place until after ANR
reports fourth quarter 2002 results, and Fitch is able to better
judge the impact of the loss on capital. Fitch will also review
several technical issues related to ANR's inability to meet its
collateral obligations to judge if under the agency's ratings
definitions, ANR should at some point be viewed as technically in
default under certain of its reinsurance treaties.


GLOBAL CROSSING: U.S. Orders Asian Buyers to Resubmit Bid
---------------------------------------------------------
Hutchison Whampoa. Ltd. and Singapore technologies Telemedia Pte
are required to resubmit their proposal to buy a majority stake
in bankrupt Global Crossing, Ltd., according to the Bermuda Sun.

The United States government wanted to make sure that their
proposal would not jeopardize national security.  The country's
Committee on Foreign Investments is asking for more evidence to
keep Global Crossing secure, said sources close to the matter.

Hutchison, owned by Hong Kong billionaire Li Ka-shing and state-
controlled Telemedia, are offering to buy a 61.5 percent stake in
Global Crossing for US$250 million.

Bermuda-based Global Crossing chief executive John Lagere
said,"They worry about, in a time of war, in a time of
uncertainty, is there anything that a group could do by
controlling these assets."

CONTACT:  GLOBAL CROSSING
          Press Contacts
          Kendra Langlie
          + 1 305-808-5912
          kendra.langlie@globalcrossing.com

          Analysts/Investors Contact
          Ken Simril
          +1 310-385-3838
          investors@globalcrossing.com


GLOBAL CROSSING: IDT Plans to Bid For Assets
--------------------------------------------
Long distance telecommunications company IDT Corp. plans to bid
for the assets of bankrupt Global Crossing, Ltd., relates the
Royal Gazette. However, a statement from Global Crossing said
that although it appreciates that IDT recognizes its increasing
value, the Company is intent on completing its deal with
Hutchison Whampoa and Singapore Technologies Telemedia.

Hutchison and Telemedia are offering US$250 million for a 61.5
percent stake in Global Crossing.

Nevertheless, IDT chairman Howard Jonas is confident that the
U.S. government would block the Asian companies' acquisition of
Global Crossing.

"We think it is against the national interests of the United
States to sell this company to a foreign entity, particularly a
hostile foreign entity like the Communist Chinese and anyone who
would be their partners, like the Singaporeans," said Mr. Jonas,
adding, "We know we have obligations to our shareholders, but
frankly, we think we have obligations to the country, too."

California Republican Representative Dana Rohrabacher told U.S.
President George W. Bush that the Asian companies should be
prevented from acquiring fiber-optic networks in the country, as
Hutchison owner, Hong Kong billionaire Li Ka-shing is reputed to
have ties to the Chinese government.

Mr. Jonas also mentioned that Global Crossing's fibre-optic
network carries data for the Justice Department, CIA and FBI.

The Asian companies defended their position. Telemedia
spokesperson Melinda Tan said, "We have a definite agreement with
Hutchison Whampoa approved by the Bankruptcy Court to take over
Global Crossing. I do not think IDT will be entertained by the
court."



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

* Republic of Bolivia Ratings Lowered; Outlook Still Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services said Wednesday that it lowered
its long-term ratings on the Republic of Bolivia to 'B' from
'B+'. Standard & Poor's also lowered its short-term ratings to
'C' from 'B'. The outlook continues to be negative.

"The downgrade reflects the increased social tensions, which
weaken the government's already narrow base of support and
capacity to introduce and implement policies. This diminishing
room to maneuver occurs at a critical time as near-term fiscal
and financing challenges exceed expectations," said Standard &
Poor's credit analyst Sebastian Briozzo.

The fiscal deficit for 2002 is now estimated to have reached 8.6%
of GDP compared with an earlier forecast of 7.5%. The new
official projection for the general government's 2003 deficit is
at least 6.5% of GDP versus the original target of 5.5%.

Standard & Poor's also said that due to the social unrest that
occurred in mid-February, the government set aside its planned
tax hikes and spending cuts and replaced these controversial
proposals with a new strategy that provides for a more gradual
reduction in fiscal imbalances.

"Even with this relaxation of the target, given the volatile
social pressures under which the government operates, the
administration will be challenged to meet the current forecast.
While the government has introduced some expenditure
rationalization policies, most of the burden of the adjustment
will come from the revenue side in the context of weak economic
prospects," added Mr. Briozzo.

A downgrade could occur should social and political problems
further destabilize governability and impede the administration's
ability to regain political momentum and garner broader support
for its new strategy.

Other downward pressures on the rating would occur should the
administration be unable to secure sufficient sources of
financing at reasonable terms.

Conversely, evidence of broader political support for government
initiatives and signs of a sustainable increase in investment
levels that boosts medium-term growth prospects could lead to a
stable outlook.

ANALYSTS:  Sebastian Briozzo, New York 212-438-7342
           Jane Eddy, New York (1) 212-438-7996



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

BCP: Telemar Will Take Control But With 70% Discount on Debt Load
-----------------------------------------------------------------
Brazilian PCS operator Oi admitted it is looking to buy Sao
Paulo-based mobile operator BCP as part of its expansion efforts.

However, Oi's parent, fixed line incumbent Telemar, told
creditors that it would buy BCP on the condition that the
acquisition agreement involves a 70% or greater discount on the
Company's US$1.8-billion debt.

Business News Americas says that if Telemar or any other buyer
were to purchase BCP at its total debt figure, the sale price
would work out to an astronomical US$1,115/subscriber. However,
under a 70% discount the sticker would be about
US$350/subscriber.

BCP's main creditors are ABN Amro and Bank of America, and its
main shareholders are BellSouth and Brazil's Safra Group.

Telemar is already active in the mobile segment through Oi, but a
BCP acquisition would give it a formidable presence in the
country's most lucrative market of Sao Paulo.

CONTACT:  BCP S.A.
          Rua Florida, 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


ELETROPAULO METROPOLITANA: Previ Denies Investment Inclinations
---------------------------------------------------------------
Previ director Arlindo de Oliveira said the Brazilian pension
fund is not planning to invest in debt-laden Sao Paulo power
distributor Eletropaulo Metropolitana, relates Business News
Americas.

Arlindo issued his statements to refute comments made by another
Previ director, Erik Persson, that the fund is considering
joining a pool of other pension funds, which would buy up to 15%
in the utility, which is controlled by AES Corp..

"That is his [Persson's] personal opinion...but we have a policy
of investments and we have already surpassed the limit of
exposure to the electric sector," Oliveira said. Previ's total
portfolio is about 34bn reais (US$9.48bn), of which 48%, or 17bn
reais, is invested in equities. Of that total, 23%, or 4bn reais,
is invested in the power sector.

Meanwhile, Persson has also withdrawn his comments. In a
statement, the fund said: "The board of Previ reaffirms that it
is not analyzing the possibility of investing in Eletropaulo. The
board meeting carried out [on Tuesday] was ordinary, with no
discussion about new acquisitions in the electric sector on the
agenda."

AES has proposed to Brazil's development bank BNDES - its main
creditor in the country - the sale of a stake in Eletropaulo to
help the troubled distributor in its debt renegotiation process.

Eletropaulo has been negotiating with BNDES for a way to settle
its US$1.16 billion debt since it missed an US$85-million payment
to the bank in January. A decision from the bank is expected as
early as the end of the month. In the meantime, the distributor
will likely seek an extension of Friday's deadline for a US$329
million payment to BNDES.

BNDES, along with the country's Mines and Energy Minister and
other government offices, have been analyzing different options
to save Eletropaulo from bankruptcy after AES left its subsidiary
to fend for itself when it started facing financial difficulties
at home. AES announced last year it wouldn't make any new
investments in its troubled units.

AES hopes to reschedule its debt maturities without giving up
control of Eletropaulo. But some government officials have warned
that renationalizing the Sao Paulo utility to later resell it to
a private investor is an option.

As the return of certain AES assets in Brazil to state control in
the event of default is part of guarantees included in the
utility's loan contract with BNDES, the bank also has its eyes on
the thermoelectric plant of Uruguaiana and on AES Sul
Distribuidora Gaucha de Energia SA.

The financing deal between BNDES and AES was signed in 1998 when
it got a US$1.03 billion loan to acquire Eletropaulo.

The government hasn't approached the fund to negotiate a possible
deal, a Previ spokeswoman 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

          AES Corp., Arlington
          Kenneth R. Woodcock, 703/522-1315
          Web site www.aes.com
          Investor relations: investing@aes.com


TERRA LYCOS: Writes Down EUR1.4B in Assets
------------------------------------------

Terra Lycos issued the following information regarding its 2002
fiscal reports:

* In the fourth quarter of 2002 and for the ninth consecutive
quarter, the Company met its EBITDA and revenue projections made
to analysts

* Terra Lycos used transparency and prudent conservative
accounting criteria to bring the book value of past investments
in line with the current market situation.

* These non-cash charges resulted in a net loss for the year of 2
billion euros. Net income for the year, excluding these asset
write-downs and applying the same tax rate as in the previous
year, amounted to 423 million euros, a 25% improvement over 2001.

* Write-down of goodwill was 857 million euros, of which 81%
corresponded to the acquisition of Lycos, while the write-down of
the tax credit amounted to 453 million euros.

* In the fourth quarter of 2002, revenues were 173 million euros,
applying the same exchange rate of the third quarter, exceeding
the guidance of 160-170 million euros provided in the third
quarter conference call. This is an increase of 19% over the
third quarter on a constant euro basis.

* The effect of the devaluation in 2002 of all currencies outside
the euro zone where Terra operates yielded a negative impact of
19 million euros in the fourth quarter.  Taking into account the
exchange rate impact, revenues were 154 million euros, 5% more
than the previous quarter.

* Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the quarter was -21 million euros, an EBITDA margin
of -13%, also in line with the Company's guidance (between -11%
and -14%). EBITDA for the year was -120 million euros, a 48%
improvement over 2001, equivalent to 112 million euros.

* At the end of December 2002, Terra Lycos had a total of 3.1
million paying access, communications services and portal
subscribers, an increase of 24% over the previous quarter and 88%
over 2001. The Company ended the year with 378,000 ADSL
customers, an increase of 11% over the previous quarter and 62%
over 2001.

ASSET IMPAIRMENT
Terra Lycos employed transparency and prudent conservative
accounting criteria to bring the book value of past investments
in line with the current market situation via an asset write-down
totaling 1.4 billion euros.

The write-down of goodwill was 857 million euros, of which 81%
corresponded to the acquisition of Lycos, with the remainder due
to other acquisitions. In keeping with this, a write-down of the
tax credit amounted to 453 million euros. The rest of the write-
downs, up to 1.4 million euros, correspond to other asset
entries. These write-downs, which did not result in any cash
disbursements, led to a net loss for the year of 2 billion euros.
Net income for the year, excluding asset write-downs and using
the same tax rate as in the previous year, amounted to -423
million euros, a 25% improvement over 2001.

FOURTH QUARTER

The Company kept its commitments with the Market.

In the fourth quarter of 2002, Terra Lycos earned revenue of 173
million in constant third-quarter euros, an increase of 19% over
the previous quarter. Exceeding the Company's guidance for the
quarter (between 160 and 170 million in constant third-quarter
euros). Total revenue, after consolidation of the different local
currencies, suffered a negative exchange-rate effect of 19
million euros due to the appreciation of the euro against other
currencies.

Revenue in current euros, taking into account the exchange-rate
effect, was 154 million euros, an increase of 5% over the
previous quarter.

The transition of the Company's business model was reflected in
results for the fourth quarter of 2002, with the diversification
of Company revenue being especially noteworthy. During the
quarter, 33% of total revenue came from access subscriptions, 35%
from advertising and e-commerce, 22% from portal subscriptions
and communications services, and 10% from other sources,
including corporate and SME services.

During the fourth quarter, Terra Lycos launched value-added
communications services, including Terra Messenger in Spain,
inaugurating a new strategy based on real-time communications
services. Terra Messenger was just one of several value-added
products rolled out within the framework of the O.B.P. model in
2002, which also included the launch of a for-pay e-mail service
in Brazil, which offers the protection of anti-virus and anti-
spam filters and which already has almost 480,000 customers.

Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the fourth quarter of 2002 improved by 21 million
euros over the same period of the previous year, to -21 million
euros, advancing the continual improvement in EBITDA over the
last two years. The EBITDA margin was -13%, in line with the
Company's guidance for the quarter (between -11% and -14%) an
increase of 5 percentage points over the third quarter and 12
percentage points over the same period of the previous year. (SEE
APPENDIX I)

FISCAL YEAR 2002

Terra Lycos' revenue increased quarter by quarter.

Revenue for fiscal year 2002 amounted to 622 million euros. At a
constant 2001 exchange rate, revenue for 2002 would have amounted
to 692 million euros. Despite an adverse macroeconomic
environment, this is a figure similar to that reached the
previous year, although it has greater quality because it is
based on growth in profitable segments.

At the close of 2002, and applying to each quarter of the year
the foreign exchange rate effect for the twelve month period,
Terra Lycos' revenues increased quarter by quarter throughout the
year.

EBITDA for the year was -120 million euros, a 48% or 112 million
euro improvement over 2001. The EBITDA margin for the year was -
19%, a 14 percentage point improvement over the previous year.

Operating Expenses

In 2002, Terra Lycos continued to combine effective management
with process improvement and created an organization consistent
with its global presence, enabling the gradual reduction of
operating expenses. During the year, the Company reduced costs by
22% from the previous year, a savings of 123 million euros.

Net Income

In 2002, the Company posted a net loss of 2 billion euros, due to
the asset write-down of 1.4 billion euros. Excluding this non-
cash charge, and applying the same tax rate as in 2001, net
income would have reached 423 million euros, 25% higher than the
year before.

Cash

Terra Lycos has one of the strongest cash positions in the
sector, allowing it to fund its operations and explore new
business opportunities in order to boost profitability. Skilled
cash management enabled the Company to end 2002 with 1.8 billion
euros.

OPERATING RESULTS

An increase of paying subscribers

Terra Lycos ended 2002 with a total of 5.9 million subscribers,
3.1 million or 53% of which are paying subscribers to access,
communications and portal services. This marks a 24% increase
from the end of the third quarter and an 88% increase from the
close of 2001. The Company ended the fourth quarter of the year
with 378,000 ADSL subscribers, 62% more than the previous year
and 11% more than at the end of the third quarter.

Terra Lycos closed December with 1.7 million subscribers to
communications and portal services, a 379% leap from the year
before and 52% more than at the end of the third quarter.

"2002 presented a major challenge for Terra Lycos, with an
adverse macroeconomic backdrop and a crisis in the advertising
industry in general and in the online advertising market in
particular" stated Terra Lycos Executive Chairman Joaquim Agut.
He added "We were still able to continue growing and focusing on
services for which our clients are willing to pay. At the same
time, we have maintained a constant path towards profitability
through efficient management and a commitment to innovation that
allows us to obtain new sources of recurring revenue."

This growth and progress towards profitability were reinforced
with an asset write-down in the year's last quarter and also with
the strategic alliance signed with Telefonica, which will allow
Terra Lycos to consolidate its long-term business model. The
agreement makes Terra Lycos the exclusive portal and provider of
value-added Internet services for the Telefonica Group, as well
as continuing to exploit globally its broadband and narrowband
access business.

The agreement, for an initial period of six years with an
automatic one- year renewal, guarantees that Terra Lycos will
generate a minimum margin of 78.5 million euros per year, the
difference between revenues from these services and the related
direct costs and investment. For the first year (2003), Terra
Lycos estimates it will obtain about 118 million euros from this
agreement, generating a minimum margin of 78.5 million euros.
2002 SUMMARY:

GROWTH:

Despite an adverse operating environment, Terra Lycos managed to
sustain its growth and profitability. Growth in revenues in local
currency accelerated each quarter. Terra Lycos refocused towards
the client and profitable services.

EBITDA:

This remains the key measure used by analysts of Internet
companies. For the ninth straight quarter, Terra Lycos
outperformed the guidance and met its commitments. In 2002,
EBITDA increased by 112 million euros and the EBITDA margin by 14
percentage points.

CASH:

Terra Lycos boasts one of the strongest cash positions in the
sector, which leaves it in a comfortable position to carry out
operations to drive growth.

TERRA LYCOS-TELEFONICA AGREEMENT:

This agreement is aimed at tapping existing synergies between the
two companies, while for Terra Lycos and its shareholders it
provides a long-term guarantee for its business model.

GOODWILL:

The significant write-downs and the restructuring of assets and
fiscal credits in the 2002 financial statements are all part of
Terra Lycos' aim of maintaining a high level of investor
transparency.

MANAGEMENT:

Reorganisation of the global group realized efficiencies and
redundancies in the organization that led to management changes.
The aim is to bring the size of the teams in line with the
desired objectives, while complying with prevailing labour laws.
This need was particularly evident in 2002.

U.S.:

The U.S. is one of Terra Lycos' most important markets. The
company intends to maintain its presence there, both because of
its position (it is the country's fourth-largest portal) and
because of its technological leadership, which can be exported to
the rest of the world.

SPAIN AND LATIN AMERICA:

They are both the natural markets in which Terra Lycos will
continue its operations maintaining its leadership position.

About Terra Lycos

Terra Lycos is a global internet group, with a presence in 42
countries in 19 languages. The group, which resulted from Terra
Networks, S.A's acquisition of Lycos, Inc. in October of 2000,
operates some of the most widely visited web sites in the US,
Europe, Asia and Latin America, and is the largest access
provider in Spain and Latin America.

Terra Lycos' network of websites includes Terra in 17 countries,
Lycos in 25 countries, Angelfire.com, Atrea.com, Azeler.es,
Direcciona.es, Educaterra.com, Emplaza.com, Gamesville.com,
HotBot.com, Ifigenia.com, Invertia.com, Lycos Zone, Maptel.com,
Matchmaker.com, Quote.com, RagingBull.com, Rumbo.com, Tripod.com,
Uno-e.com and Wired News (Wired.com), among others.

Terra Lycos, with headquarters in Barcelona and operating centers
in Madrid and Boston, as well as elsewhere, is listed on the
Madrid stock exchange (ticker: TRR) and on the NASDAQ electronic
market (ticker: TRLY).

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

CONTACTS:

    Public Relations
    Miguel Angel Garzon
    Tel: +34-91-452-3021
    Email: miguel.garzon@corp.terralycos.com

    Kirsten Rankin (U.S.)
    Tel: +1-781-370-2691
    Email: kirsten.rankin@corp.terralycos.com

    Investor Relations
    Miguel Von Bernard
    Tel: +34-91-452-3278
    Email: relaciones.inversores@corp.terralycos.com


* World Bank Grants Brazil $505M Loan
-------------------------------------
First loan to Brazil's new administration promotes better
targeting, better distribution and better impact of social
spending

The World Bank Board of Directors approved Wednesday a first
US$505 million Programmatic Human Development Sector Reform Loan
for Brazil. The loan supports Brazil's accelerated program of
human development reforms. This program is important to reducing
hunger and poverty by improving the quality and reach of public
spending in education, health and social assistance, and to
protecting the poorest and most vulnerable groups from the
impacts of economic crises.

"The crucial question right now is how to get the most impact
from social spending," said Vinod Thomas, World Bank Brazil
Country Director. "The increased quality of public spending
supported by the current effort is aimed at enabling Brazil to
speed up human development while maintaining fiscal
responsibility," he added.

A specially positive aspect of Brazil's human development sector
reform program is to have been able to identify cross-cutting
issues in education, health and social assistance and to focus on
the important issues of accountability, governance, equity,
quality and efficiency in public social spending. This loan
supports the following results:

(i) The recent substantial progress on social policies and
outcomes. Over the recent years, Brazil has strengthened an
innovative set of programs at the federal level to decentralize
the delivery of social services, to place a floor on basic
education and health spending, and to reduce inter-state and
inter-municipality inequalities. It has also developed
institutional mechanisms to coordinate and focus assistance to
poor communities through a variety of programs to improve
assistance for disadvantaged populations.

(ii) The protection of budgets and monitoring of implementation
of effective social policies during times of instability. In the
face of macroeconomic instability, sound human development
policies such as targeting, redistribution of resources to
benefit the poor, transparent allocation of resources, and
successful conditional cash transfers, are critical for
guaranteeing continued growth and poverty reduction.

(iii) The commitment by the new administration to the
continuation, improvement, and expansion of these effective
social policies to obtain better sector outcomes. The encouraging
messages from the new administration have been coupled with the
launching of important social sector initiatives. The Zero Hunger
program, launched as a flagship program to fight hunger, supports
the health, education, and social protection agendas. The new
government has announced its commitment to decentralization,
education evaluation, community empowerment and participation,
and conditional cash transfer programs for the poor.
Complementary is the effort to promote quality growth,
competitiveness and employment, including through the First Job
program, which the World Bank is following up with additional
support.

"Brazil is carrying out one of the greatest experiments in
history of pursuing a bold social program with fiscal
responsibility in an unusually tough external environment. This
operation is one of the many ways the World Bank is supporting
these efforts," said Vinod Thomas. "We will continue to work with
the Government of Brazil for the common purpose of fighting
poverty and inequality and bringing about socially and
environmentally sustainable development in Brazil."

The US$ 505 million single-tranche loan is a customized LIBOR-
based, Fixed-Spread Loan, repayable in 10 years including a grace
period of 7.5 years.

The World Bank's current investment portfolio in Brazil includes
50 projects, totaling more than US$4.5 billion in commitments.
Since 1949, the Bank has made more than 300 loans and invested
more than US$32 billion to promote poverty reduction, social and
economic development in Brazil. The World Bank Group, including
the IBRD, IFC and MIGA, contemplates US$ 6 billion up to US$10
billion in new investments during the four years of this
administration.




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

ENERSIS: Renegotiates Debt With Creditor Banks
----------------------------------------------
Chilean power sector holding Enersis said it will complete a
US$2.3-billion debt deal with its four main creditor banks within
two weeks, Business News Americas reports, citing Enersis
spokesperson Marcelo Castillo.

Enersis said the Company has reached an agreement "in principle"
with the banks. Details of its terms were not revealed due to
confidentiality agreements.

This news comes on the heels of a downgrade of Enersis and Endesa
Chile's debt rating Friday to one notch above junk, by ratings
agency Standard & Poor's Corp.

Enersis' efforts are part of a wider financial restructuring of
the Company, hard hit by the economic meltdown of Argentina and
the financial crisis in Brazil.

As a result of last year's regional turmoil, Enersis suffered a
CLP223.75-billion loss for the whole of 2002, principally due to
writedowns on the value of its investments in Argentina and
Brazil.

Speaking in Madrid, Endesa Chief Financial Officer Jose Luis
Palomo said the debt renegotiation for Enersis is "at a very
advanced stage of talks."

Within the overall restructuring plan, Endesa has sought to
distance itself from its Latin American units, seeking to put
them on independent financial footing.

A week ago, Enersis said it would increase its capital by $2
billion, up from a $1.5 billion hike previously. The exact
amount, price and period of the increase will be presented to the
shareholders at an extraordinary meeting March 31.

Enersis said the decision to beef up the capital increase by
US$500 million came in response to Spain's Endesa, which wants to
capitalize the total debt Enersis has with it, some US$1.3
billion.

At the extraordinary meeting, the shareholders will also have to
give their approval to the proposed sale of the Rio Maipo
electricity utility.

Enersis said that in January it had received 13 offers for Rio
Maipo and an Endesa Chile company up for sale, and that the
bidders are now undertaking due diligence of the companies.

CONTACT:  ENERSIS
          Investor Relations:
          Ricardo Alvial
          Chief Investments & Risks Officer of Enersis
          Email: ram@e.enersis.cl
          Phone: (562) 353-4682
          Contacts:
          Susana Rey, srm@e.enersis.cl
          Ximena Rivas, mxra@e.enersis.cl
          Pablo Lanyi-Grunfeldt, pll@e.enersis.cl


ENERSIS: Parent Endesa Releases 2002 Consolidated Results
---------------------------------------------------------
Net income for the year 2002 was euro 1,270 million, and earnings
per share euro 1.20, both with a decrease of 14.1% over 2001, due
to the company's decision to make write downs and provisions to
strengthen the balance-sheet.

    --  Other relevant magnitudes that registered significant
     changes were:

        --  Cash flow of euro 4,285 millions, an increase of 28%
            vs 2001.

        --  Operating income amounted to euro 3,582 million,
            12.8% higher than 2001.

        --  Ordinary income was euro 1,500 million, increasing by
            43.4%.

    --  Earnings per share evolved in line with net income,
        amounting to Euro 1.2, representing a 14.1% decrease
        against 2001.

    --  ENDESA's Board of Directors will submit a proposal to the
        Annual Shareholders Meeting to pay the same dividend
        against 2002 results than the one paid against 2001.

    --  Extraordinary provisions and write-downs have been made
        to cover future risks for an amount of Euro 1,169
        million, with an impact in net income of Euro 802
        million.

    --  2002 net income before write-downs and provisions
        amounted to Euro 2,072 million, a 40.1% increase from
        2001.

    --  Domestic electricity business operating income amounted
        to Euro 2,131 million. This represents an 18.5% increase
        against 2001.

    --  Latin American operating income was Euro 1,268 million,
        representing 35.4% of the total operating income.

    --  This amount represents a 10.9% decrease against 2001
        caused by the exceptional currency devaluation taken
        place in the main Latin American countries. Measured in
        local currency, Latin American operating income grew by
        25.2%, confirming its profitability potential.

    --  Operating income for the electricity business in European
        countries other than Spain, which corresponds entirely to
        the activity carried out by ENDESA Italia, amounted to
        Euro 150 million, a 25% more than the effect of the sale
        of Viesgo.

    --  In telecommunications, AUNA EBITDA was positive amounting
        to Euro 610 million. Net income of AMENA, its main
        subsidiary, was Euro 101 million. The foreseeable future
        performance of the parent company and the asset sale in
        process will make unnecessary new equity contributions
        from the shareholders

    --  In 2002 ENDESA reduced its debt by Euro 2,260 million, 9%
        against year 2001. Excluding the new debt consolidated
        from Endesa Italia, debt reduction was Euro 3,590
        million.

    --  Average cost of debt for the year ending 2002 improved
        significantly to 5.05%, against 5.85% for 2001.

    --  Debt reduction and the decrease in the average cost of
        debt have enabled a reduction in net financial expenses
        of Euro 222 million, a decrease of 15.2% against 2001.

    --  Debt reduction was especially relevant in the domestic
        business amounting to Euro 2,374 million with an average
        cost of debt of 4.3%, vs 4.6% in 2001.

    --  The company's total investments in 2002 amounted to Euro
        3,963 million, down 27.2% from 2001. Excluding the
        financing of the deficit of revenues from regulated
        activities, investments were reduced by 40.2%.

    --  In accordance with the 2002-2006 Strategic Plan, the
        remarkable investment control above mentioned, did not
        affect the capital expenditures in the Electricity
        business in Spain, which amounted to Euro 1,350 million,
        +11.5% from 2001.


ENDESA's (NYSE:ELE) net income for the year 2002 was Euro 1,270
million and earnings per share were Euro 1.20, both with a
decrease of 14.1% over 2001.

The lower results are due to the company's decision to make write
downs and provisions in the amount of Euro 1,169 million in order
to cover future risks, which have had an impact on net income of
Euro 802 million.

This provisioning effort against 2002 results considerably
strengthens ENDESA's balance sheet covering the risks that might
materialise in the next few years, yielding a more solid position
to address the future.

Net income before the above write-downs and provisions for future
risks amounted to Euro 2,072 million, 40.1% higher than 2001.
This increase is due in part for the new regulation contained in
the Royal Decree 1432/2002 costs liquidation of the regulated
activities.

Cash flow for 2002 amounted to Euro 4,285 million, Euro 938
million or 28%, higher than in 2001. The increase in cash flow is
in line with the increase in net income before write-downs and
provisions for future risks.

ENDESA's different lines of business have generally shown a very
positive performance in 2002, as evidenced by a 43.4% increase in
ordinary income to Euro 1,500 million.

This positive evolution has been made possible by both a 12.8%
higher operating income to Euro 3,582 million and by lower
financial expenses.

Domestic electricity business delivered 59.5% of the total
operating income, amounting to Euro 2,131 million. This
represents an 18.5% increase against 2001, which would have been
26.9% on a like for like basis discounting the effect of the sale
of VIESGO.

This increase was obtained mainly as a result of a 3.2% increase
in the energy generated by ENDESA in an homogeneous basis and
through the higher wholesale generation prices in 2002, more than
compensating the higher fuel costs derived from lower hydro
levels in 2002 against 2001.

Royal Decree 1432/2002 establishes the companies' right to
recover on a lineal basis, over the period 2003-2010, the amount
of the tariff shortfall for regulated activities including the
corresponding interest. The 2002 financial statements fully
reflect the revenues from generation, supply, distribution and
transmission in accordance with the price setting systems in
force, deregulated in the first two cases and regulated in the
latter two.

ENDESA accounted Euro 658 million as account receivable to
reflect the right to recover the revenue shortfall of the
regulated activities.

Of this amount, Euro 524 million correspond to the 2002 shortfall
and the balance of Euro 134 million to the previous years,
including their corresponding interests.

It is important to highlight that previous years amount, deducted
from revenues in year 2000, has been accounted in year 2002 as
"Extraordinary Results".

In addition to this, Royal Decree 1432/2002 recognises the right
to recover, in the same way and in the same period as the revenue
shortfall, the additional compensations for the extra costs in
extra peninsular systems. Therefore, ENDESA has accounted Euro
128 million as extraordinary income for 2002 corresponding to the
compensations recognised for previous years.

The above Royal Decree has allowed the normalisation of the
remuneration to the Spanish electricity industry by making sure
that all of the agents receive the remuneration to which they are
legally entitled for the activities carried out in 2002 and
previous years.

As for the business in Latin America, their performance has been
positive in general in all of the countries in which ENDESA's
subsidiaries operate, with a 25.2% rise in operating income in
local currency terms. Even in Argentina, despite the country's
crisis in 2002, the whole of the operating income from ENDESA's
subsidiaries rose 27.0% in Argentinean peso terms.

Nevertheless the currency devaluation in the countries where
ENDESA's subsidiaries operate together with the Euro's strength,
have resulted in a 10.9% decrease in operating income for the
region to Euro 1,268 million against 2001, that represented 35.4%
of the company's total.

Given deep economic crisis that Latin America has gone through in
2002 and the strong currency devaluation in he area, this
decrease in the operating income of the Latin American operations
should be considered as moderate. This proves that even in
extraordinary adverse circumstances, this business has a clear
potential for growth and return.

As for ENDESA's European electricity business, operating income
rose 25% to Euro 150 million, more than offsetting the effect of
the sale of Viesgo.

On the other hand, ENDESA reduced its debt levels in Euro 2,260
million in 2002 to a total Euro 22,747 million as of 31December
2002.

Average cost of debt for 2002 showed a significant decrease to
5.05%, against 5.85% in 2001. In particular, it is worth
mentioning that the cost of debt for the domestic business
decreased to 4.3% from 4.6% in 2001.

The drop in debt and its average cost enabled Euro 222 million
lower net financial expenses in 2002, a 15.2% decrease against
2001.

The lower financial expenses have allowed absorbing the effect of
the foreign exchange differences derived from the Latin American
currency devaluation, with an improvement of Euro 88 million in
the financial results for the year against 2001.

As a summary, 2002 showed a very positive performance of the
ordinary income and cash flow mainly due to the Spanish
electricity business. In addition to this, ENDESA made a great
effort through provisioning and write-downs in order to
strengthen the company's balance sheet, allowing ENDESA to
address the future from a more solid position. It is also
remarkable the significant reduction in debt levels.

Dividend

ENDESA Board of Directors will submit a proposal to the Annual
Shareholders Meeting to pay the same dividend against the 2002
results, than the one paid against 2001. Therefore, total
dividend proposed would amount to Euro 0.6825 per share.

On January 2nd 2003, an interim dividend of Euro 0.264 per share
was paid, therefore final dividend would be Euro 0.4185 per
share. This final dividend would be payable on July 1st 2003.

This dividend proposal against 2002 results means a 56.9% pay-out
ratio, which is similar to other European utilities.

CHANGES IN THE CONSOLIDATION PERIMETER

The main changes in the consolidation perimeter that took place
in the year have been due to the following:

-- In January 2002, ENDESA sold the 87.5% stake that it held in
Viesgo as of 31 December 2001. As a result of this sale,
completed as of January 2002, Viesgo has not been consolidated in
ENDESA's 2002 accounts.

-- In the first quarter 2002, ENDESA Europa acquired an
additional 5.7% of ENDESA Italia, raising therefore its stake in
the company to 51%. Therefore ENDESA's financial statements for
2002 fully consolidate ENDESA Italia from the beginning of the
year.

-- The Chilean mobile telephone operator SMARTCOM is now
consolidated by the equity method. Before 2002 the company's
accounts had previously been fully consolidated.

ANALYSIS OF RESULTS

The table below shows the main magnitudes of ENDESA's
consolidated profit and loss account for 2002 and their
comparison against 2001.

Main magnitudes of ENDESA's profit and loss account
(Euro million)
----------------------------------------------------------------
                                       2002      2001     % var.
----------------------------------------------------------------
Revenues                             16,739   15,576        7.5
----------------------------------------------------------------
EBITDA                                5,278    5,004        5.5
----------------------------------------------------------------
Cash flow                             4,285    3,347       28.0
----------------------------------------------------------------
Operating income                      3,582    3,175       12.8
----------------------------------------------------------------
Ordinary income                       1,500    1,046       43.4
----------------------------------------------------------------
Net income                            1,270    1,479      -14.1
----------------------------------------------------------------

1 Operating income

ENDESA's revenues in 2002 amounted to Euro 16,739 million, a 7.5%
rise on the previous year.

EBITDA was Euro 5,278 million, an increase of 5.5% over the
previous year.

Operating income for the year 2002 was Euro 3,582 million, an
increase of 12.8% against the previous year.

The table below shows a breakdown of revenues, EBITDA operating
income among the different markets and lines of business in which
ENDESA operate.

                           Electricity
             Domestic         Europe      Latin America     Other
-----------------------------------------------------------------
       Euro    % on    Euro    % on   Euro    % on   Euro   % on
     million   total  million total  million total  million total
-----------------------------------------------------------------
Revenues10,885  65.0   1,744   10.4   3,850   23.0     260   1.6
-----------------------------------------------------------------
EBITDA  3,205    60.7     263    5.0   1,735   32.9      75   1.4
-----------------------------------------------------------------
Operating
Income 2,131    59.5     150    4.2   1,268   35.4      33   0.9
-----------------------------------------------------------------
Cash
Flow   2.537    59.2     179    4.2   1.444   33.7     125   2.9
-----------------------------------------------------------------

1.1 Domestic electricity business

Operating income for the domestic electricity business in 2002
was Euro 2,131 million, an increase of Euro 332 million in
absolute and of 18.5% in relative terms against 2001.

For a homogeneous comparison between the operating income for
2001 and 2002 it is necessary to consider the sale of Viesgo,
which contributed Euro 120 million to the operating income in
2001, whereby, on a like for like basis, operating income
increased by Euro 452 million, that is, 26.9% higher than 2001
without Viesgo.

This higher operating income has been mainly due to the
advantages provided by ENDESA's balanced generation mix under low
hydro conditions such as in 2002, in which the company can
increase its output and therefore its market share with lower
fuel costs than the rest of the industry.

Revenues

Revenues from the domestic electricity business amounted to Euro
10,885 million in 2002, an increase of 7.9% against 2001.

The table below shows a breakdown of revenues. In order to
facilitate the analysis, figures for 2001 highlight the figures
for Viesgo.

                                    Euro million
---------------------------------------------------------------
                             2002     2001     Change   % chge.
---------------------------------------------------------------
Sales                        10,579     9,044    1,535     17.0
---------------------------------------------------------------
CTC
-By technology                   49        70      (21)   -30.0
-Coal                            41        67      (26)   -38.8
---------------------------------------------------------------
Services                        216       251      (35)   -13.9
---------------------------------------------------------------
Viesgo                            -       654     (654)     N/A
---------------------------------------------------------------
TOTAL                        10,885    10,086      799      7.9
---------------------------------------------------------------

Sales

Sales in 2002 were Euro 10,579 million, broken down as follows:

                                         Euro million
-----------------------------------------------------------------
                                 2002      2001  Change  % chge.
-----------------------------------------------------------------
Generation, mainland            3,739     3,085     654     21.2
-----------------------------------------------------------------
Distribution and transmission,
mainland                       4,306     3,713     593     16.0
-----------------------------------------------------------------
Supply                          1,209     1,085     124     11.4
-----------------------------------------------------------------
"Trading"                         121       173     (52)   -30.1
-----------------------------------------------------------------
Extra peninsular systems*         872       845      27      3.2
-----------------------------------------------------------------
Extra peninsular compensations    204       126      78     61.9
-----------------------------------------------------------------
Other**                           128        17     111      N/A
-----------------------------------------------------------------
TOTAL                          10,579     9,044   1,535     17.0
-----------------------------------------------------------------

* For a higher transparency and due to the particularities of
production and generation in the extra peninsular systems, the
information on these activities is shown separately.

** Most of this amount corresponds to sales of gas in the Spanish
liberalised market.

Generation

In 2002, demand for electricity in the mainland grew 2.1% against
2001. Still, the output from generators under the ordinary regime
was only 0.8% higher, due to the 12.4% higher output from
generators under the special regime and to the higher imports of
electricity.

ENDESA's generation sales in the mainland were 21.2% higher as a
result of the following:

-- ENDESA's output in the mainland sold in the wholesale market
was 78,138 GWh in 2002, a decrease of 4.6% against 2001. Though,
on a comparable basis, after subtracting the output corresponding
to Viesgo, it increases a 3%. This represents a market share of
44% for the ordinary regime.

-- The unit price of the electricity sold by ENDESA to the
wholesale market rose 17.6% to 4.55 Euro cents per Kwh against
3.87 Euro cents per Kwh in 2001. This increase has been due to
the low hydro generation levels in the year.

The table below shows the structure of the generation in the
mainland for both ENDESA and the whole of the industry for 2001
and 2002:

Structure of electricity generation in the mainland
for ENDESA and the total industry (%)
-----------------------------------------------------------------
                             ENDESA             Total industry
-----------------------------------------------------------------
                          2002       2001         2002       2001
-----------------------------------------------------------------
Nuclear                   36.3       34.4         33.8       34.5
-----------------------------------------------------------------
Coal                      47.5       45.2         43.1       37.6
-----------------------------------------------------------------
Hydro                     10.1       15.4         12.2       22.1
-----------------------------------------------------------------
Fuel-gas                   3.9        5.0          7.9        5.8
-----------------------------------------------------------------
CCGT                       2.2          -          3.0          -
-----------------------------------------------------------------
Total                    100.0      100.0        100.0      100.0
-----------------------------------------------------------------

The table above shows that ENDESA's generation mix in the
mainland is very stable, with low volatility to hydro conditions.
This allows ENDESA to replace the hydro deficits with coal power
plants, instead of fuel oil burning plants that result in much
higher costs per kWh.

On the other hand, is worth to point out that in the third
quarter 2002 the CCGT plants at Besos (Barcelona) and San Roque
(Cadiz) have generated a total of 1,732 GWh in their first five
months of commercial operations.

Distribution and Transmission

Energy sold by ENDESA in the mainland was 73,399 GWh in 2002,
3.4% lower than 2001, though it increases a 2.9% compared to 2001
after subtracting figures for Viesgo. This figure represents a
share of 39.6% of distribution in the mainland.

Revenues from distribution and transmission in the mainland grew
by Euro 593 million. Of this amount Euro 561 million corresponded
to the higher cost of energy purchases, mainly as a result from
the higher pool prices. The regulated margin on distribution
remains at similar levels as in the 2001.

Disregarding this effect, sales from distribution and
transmission would have increased by Euro 32 million against
2001, a rise of 0.9%.

Supply

In 2002, ENDESA sold 22,797 GWh to eligible customers, an
increase of 4.9% against 2001.

Along the year 2002 ENDESA followed a pricing policy geared
towards an improvement of margins, which led to a 6.3% increase
in the price for energy, thereby leading to a 11.4% rise in
revenues for the activity to Euro 1,209 million.

ENDESA's share in the market for eligible customers has been
36.7% in 2002.

Extra Peninsular Systems

In 2002, ENDESA's output in the extra peninsular systems was
11,238 GWh, 3.7% higher than 2001.

Sales in these markets were Euro 872 million, an increase of 3.2%
against 2001.

In addition to this, revenues include Euro 204 million from
compensations, an increase of Euro 61.9 million against 2001,
before the additional compensations established by Royal Decree
1.432/2002.

In 2002 the 232 MW cycle power plant of Son Reus (Balearic
Islands) started its commercial operations.

Operating Costs

The table below shows operating costs for the domestic
electricity business, separating the ones for Viesgo in 2001 for
an easier comparison.

                                    Euro million
-----------------------------------------------------------------
                              2002      2001      Change  % chge.
-----------------------------------------------------------------
Purchases                     6,426     5,489      937      17.1
-----------------------------------------------------------------
Purchases of energy          4,605     3,837      768      20.0
-----------------------------------------------------------------
Fuel                         1,434     1,318      116       8.8
-----------------------------------------------------------------
Transmission and other
  external expenses             387       334       53      15.9
-----------------------------------------------------------------
Depreciation                  1,074     1,029       45       4.4
-----------------------------------------------------------------
Provisions                      (22)       23      (45)      N/A
-----------------------------------------------------------------
Personnel                       825       823        2       0.2
-----------------------------------------------------------------
Other Operating Costs           641       549       92      16.8
-----------------------------------------------------------------
Viesgo                            -       542     (542)      N/A
-----------------------------------------------------------------
TOTAL                         8,944     8,455      489       5.8
-----------------------------------------------------------------

Purchases

In 2002, purchases were increased Euro 937 Million (17.1%)
against 2001 mainly due to the following two reasons:

-- Higher purchases of energy by ENDESA's distribution and
commercialisation affiliates in the amount of Euro 768 million,
representing an increase of 20.0% over the figures for 2001. This
increase was a consequence of the higher average pool prices.

-- Fuel costs increased by Euro 116 million as a consequence of
the higher volumes of thermal-based generation vis-a-vis 2001.

Provisions

Operating provisions for 2002 include the usual annual provision
charges, the amount for 2002 being lower since Euro 56 million
from the domestic coal consumption compensations for the first
half 2000 were collected in 2002. The provision, which was
created for this amount in 2000, has therefore been reversed.

Personnel Expenses

As of December 31st 2002 ENDESA's domestic electricity business
workforce amounted 13,548 employees decreasing 1,468 against
December 31st 2001, including 876 of VIESGO.

Personnel expenses in 2002 were Euro 825 million, practically
equal to 2001 after excluding personnel costs from VIESGO.

1.2. European Electricity Business

Operating income for the electricity business in European
countries other than Spain corresponds entirely to the activity
carried out by ENDESA Italia. ENDESA's output in Italy in 2002
was 17,551 GWh with revenues of Euro 1,108 million.

During 2002, ENDESA has continued to develop the improvements in
efficiency as set out in the business plan. Total workforce at
ENDESA Italia as of 31st December 2002 was 1,108, lower in 290
employees than at the end of the year 2001.

EBITDA for 2002 was Euro 263 million, enabling an operating
income of Euro 150 million.

1.3. Latin American Electricity Business

Operating income for the Latin American electricity business in
2002 was Euro 1,268 million, a decrease of 10.9% against last
year. However, should Argentina be disregarded, operating income
shows an increase of 3.8%.

Between 2001 and 2002 local currencies experienced significant
devaluation against the Euro having a negative effect on the
operating income measured in Euro. However, in local currency
terms, operating income from the Latin American companies that
are fully consolidated increased by 25.2%.

The table below shows the performance of the EBITDA and operating
income in Latin America broken down by activity:

                                   Euro million
----------------------------------------------------------------
                             EBITDA            Operating income
----------------------------------------------------------------
                     2002    2001   % chge.  2002    2001 %chge.
----------------------------------------------------------------
Generation            858     968   -11.4     627    653   -4.0
----------------------------------------------------------------
Distribution &
Transmission         911   1,115   -18.3     679    774  -12.3
----------------------------------------------------------------
Other                 (34)      3     N/A     (38)    (4)   N/A
----------------------------------------------------------------
Total               1,735   2,086   -16.8   1,268  1,423  -10.9
----------------------------------------------------------------

The table below shows EBITDA and operating income for the
activities of generation and distribution in 2002 and 2001,
broken down by country where ENDESA has fully consolidated
affiliates.

                                   Euro million
-----------------------------------------------------------------
                              EBITDA           Operating Income
-----------------------------------------------------------------
                       2002    2001 % chge.   2002   2001 % chge.
-----------------------------------------------------------------
Generation
-----------------------------------------------------------------
Chile                   375     362     3.6    281    256    9.8
-----------------------------------------------------------------
Colombia                179     193    -7.3    124    132   -6.1
-----------------------------------------------------------------
Brazil                   50      70   -28.6     40     63  -36.5
-----------------------------------------------------------------
Peru                    158     163    -3.1    118    121   -2.5
-----------------------------------------------------------------
TOTAL Generation ex
Argentina              762     788    -3.3    563    572   -1.6
-----------------------------------------------------------------
Argentina                96     180   -46.7     64     81  -20.9
-----------------------------------------------------------------
TOTAL Generation        858     968   -11.4    627    653   -4.0
-----------------------------------------------------------------


Distribution and Transmission
-----------------------------------------------------------------
Chile                    194     208    -6.7    171    184   -7.1
-----------------------------------------------------------------
Colombia                 133     149   -10.7     56     65  -13.8
-----------------------------------------------------------------
Brazil                   413     314    31.5    343    228   50.4
-----------------------------------------------------------------
Peru                      85      91    -6.6     55     62  -11.3
-----------------------------------------------------------------
TOTAL Dist. and Trans. ex
Argentina               825     762     8.3    625    539   16.0
-----------------------------------------------------------------
Argentina                 86     353   -75.6     54    235  -77.0
-----------------------------------------------------------------
TOTAL Distribution &
Transmission            911   1,115  -18.3     679    774  -12.3
-----------------------------------------------------------------

In all the countries and activities that reflect lower EBITDA and
operating income against 2001, their decreases have been lower
than the devaluation of the local currency against the Euro,
therefore the currency devaluation has been the reason behind the
reduction of both magnitudes in Euro terms. It is worth noting
that in Chile, Colombia and Peru the drops have been much lower
than the ones for their currency devaluation thereby evidencing
the good business performance in local currency terms.

On the other hand, the excellent performance of the Chilean
generation should be highlighted, with an increase in Euro terms
of its operating income of 9.8% despite the Chilean peso's 23,4%
devaluation against the Euro in 2002, as well as distribution and
transmission in Brazil, where the higher operating income was
mainly due to CIEN, the company that interconnects Argentina and
Brazil, whose second line was commissioned in 2002.

Operating results for the Latin American electricity business of
ENDESA in 2002, achieved in a very adverse economic environment,
reflect the efficiency improvements that are being achieved in
its subsidiaries and the limited impact from the situations of
recession on the electricity business.

The table below shows the physical data of ENDESA's Latin
American subsidiaries in 2002 and 2001.

                 Generation (GWh)         Distribution (GWh)
---------------------------------------------------------------
                             % chge.                    % chge.
                 2002         s/2001         2002        s/2001
---------------------------------------------------------------
Chile           16,285        3.5           9,895        3.9
---------------------------------------------------------------
Colombia        10,699        5.0           9,029        4.1
---------------------------------------------------------------
Argentina        8,600      -23.4          12,159       -6.0
---------------------------------------------------------------
Brazil           2,467        9.3          12,653        4.6
---------------------------------------------------------------
Peru             4,404       -2.3           3,872        5.1
---------------------------------------------------------------
TOTAL           42,455       -3.3          47,608        1.5
---------------------------------------------------------------

The data above show that ENDESA's Latin American business is
adequately diversified, both by country and line of business,
which enables it to face the consequences of the odd situations
of recession.

2 Financial Results

Financial results for 2002 were a net loss of Euro 1,634 million,
an improvement of 5.1% against last year, as broken down below:

                                   Euro million
-----------------------------------------------------------------
                              2002       2001    Change   % chge.
-----------------------------------------------------------------
Financial expenses           (1,499)    (1,628)     129      7.9
-----------------------------------------------------------------
Financial income                260        167       93     55.7
-----------------------------------------------------------------
FX differences                 (549)      (398)    (151)   -37.9
-----------------------------------------------------------------
Monetary correction             163        141       22     15.6
-----------------------------------------------------------------
Change in provisions             (9)        (4)      (5)     N/A
-----------------------------------------------------------------
Total financial results      (1,634)    (1,722)      88      5.1
-----------------------------------------------------------------
----

2.1 Financial Expenses

In 2002 ENDESA reduced its debt figure by Euro 2,260 million. As
a consequence of that, debt fell to Euro 22,747 million as of
December 31st 2002.

The reduction in debt was the result of the following:

-- The result of the operations in the year resulted in a
reduction of the debt of Euro 1,366 million, as is detailed in
item 6 "Cash Flow, Investments and Financing."

-- The consolidation perimeter changes added Euro 1,330 million
corresponding to ENDESA Italia's debt position as of 31 December
2001 as well as the reduction of Euro 152 million of the debt at
that date from the companies that ceased to be fully consolidated
mainly VIESGO.

-- The changes in the exchange rates against the Euro of the
currencies in which the consolidated affiliates hold their debt
have resulted in a decrease of the Euro value of the total
consolidated debt of Euro 2,072 million.

On the other hand, average cost of debt for the year was 5.05%,
against 5.85% for 2001.

This decrease and the debt reduction have enabled a reduction in
net financial expenses of Euro 222 million, a decrease of 15.2%
against 2001.

The following table shows a breakdown of debt and its average
cost by line of business in 2002:

Euro Million                  Debt as of Debt as of  Change  Avge
                               31-12-01  31-12-02           cost
                                                             2002
-----------------------------------------------------------------
Domestic electricity business  11,768     9,394  (2,374)  4.26
-----------------------------------------------------------------
Latin American electricity
business                      11,525     9,599  (1,926)  6.25
-----------------------------------------------------------------
       Enersis with third parties
        debt                    8.570     6.984  (1.586)  7,05
-----------------------------------------------------------------
       Rest                     2.955     2.615    (340)  4,17
-----------------------------------------------------------------
European electricity business       -     1,627   1,627   3.83
-----------------------------------------------------------------
Other businesses                 1,714     2,127     413   4.13
-----------------------------------------------------------------
TOTAL                           25,007    22,747  (2,260)  5.05
-----------------------------------------------------------------


2.2. Foreign Exchange Differences

Net foreign exchange differences for 2002 resulted in a net loss
of Euro 549 million.

Among the currencies of the countries where ENDESA operates, the
most significant exchange rate fluctuation against the Euro and
US dollar has been the Argentinean peso. As of 31st December 2001
the exchange rate was 1 peso per dollar while as of 30th December
2002 was 3.37 pesos per dollar, meaning a devaluation of 70.3%.
Since ENDESA closed its accounts for the year 2001 using an
exchange rate of 1.7 pesos to the dollar, the effect on 2002
corresponds to a devaluation of 49.6%.

Of the remaining currencies of the countries in which ENDESA has
a presence, it is worth noting the 34.3% devaluation of the
Brazilian real against the dollar.

In 2002 the negative effect of the devaluation of the Argentinean
peso on the debt of the ENDESA's subsidiaries operating in this
country amounted to Euro 392 million with an impact on net income
of Euro 67 million.

In the case of Brazil, most of the dollar-denominated third party
debt in ENDESA's subsidiaries is hedged; hence the impact from
foreign exchange differences derived from this debt upon the
results is not significant.

3 Equity Income

In 2002, losses attributable to ENDESA under the equity method
were Euro 93 million.

The largest component of the equity losses corresponds to the
shareholdings in telecommunications affiliates.

The telecommunications holding company AUNA, showed a loss of
Euro 160 million, which, apart from AUNA's ordinary income,
includes some the provisions corresponding to the closing of
Quiero TV and other write downs.

In 2002 AUNA showed positive EBITDA of Euro 610 million and its
main subsidiary, AMENA, posted a positive net income of Euro 101
million with a customer base of 6,460,000, and an income market
share of 18.6%.

On the other hand, the foreseeable future performance of the
parent company and the asset sale in process will make
unnecessary new equity contributions from the shareholders.

It is important to highlight that the foreseeable future
performance of the holding and divestments will make it
unnecessary to ask for new equity contributions from the
shareholders.

The Chilean mobile telephone operator Smartcom, despite showing
net loss of Euro 53 million, had EBITDA positive of Euro 8.6
millions for the year, due to 42% revenues increase compared to
2001.

Moreover, as of 31st December 2002 it had a customer base of
946,000, 55% higher than a year ago, and a market share of 15.5%,
against 12.6% in 2001.

Following prudence criteria, ENDESA has deferred the effect from
the fiscal deductibility of the telecom participations, for the
amount of Euro 152 million, which will cover the future fiscal
cost arisen when these participations show benefits.

4 Extraordinary Results

Extraordinary results for ENDESA in 2002 were Euro 71 million.
Its main components were the following:

--  The Euro 1,066 million capital gain from the sale of 87.5%
     of VIESGO.

--  The recognition of the tariff deficit and additional
     compensations corresponding to previous years over costs in
     the extra peninsular systems for the amount of Euro 86 and
     128 million, respectively.

    --  A Euro 317 million extraordinary amortisation of Smartcom
        goodwill as a result of the value decrease in the sector
        of telecommunications.

    --  Euro 380 million provisions to cover the risks related to
        the national electricity business. This corresponds to
        the shortening of the useful life of assets caused by the
        liberalisation of the market, the new regulation on
        meters and the update of the actuarial studies for the
        pension commitments with the workforce as a consequence
        of higher inflation than the previously assumed.

    --  Euro 404 million provisions to cover risks related to the
        Latin American electricity business, where 134 millions
        were already allocated in the first nine months of the
        year. This provision covers possible assets and goodwill
        capital losses in Latin America and future risks due to
        other contingencies in ENDESA's subsidiaries and in
        operations conducted by ENDESA in Latin America.

        Among these provisions it is noteworthy the Euro 145
        million provision to fully cover the risks of the
        investments, including intercompany loans granted to
        Argentinean subsidiaries, regarding the uncertainty of
        the economic situation of the country.

        With this provision, the book value of ENDESA's net
        assets in Argentina is zero.

    --  A provision to cover the effect of the lower share price
        on the treasury stock, which amounted to Euro 75 million.

5 Information by Line of Business

The table shown below shows the main parameters of the income
statement and balance sheet as of December 31, 2002 by line of
business:

                                Euro Million
----------------------------------------------------------
                    Revenues  Operating    Net      Fixed
                                Income    Income    Assets
----------------------------------------------------------
Generation            4.345     1.364     2.082     8.316
----------------------------------------------------------
Distribution          5.597       684       498     6.729
----------------------------------------------------------
Supply                1.323        98        38        10
----------------------------------------------------------
Latin America         3.850     1.268      (281)    9.286
----------------------------------------------------------
Europe                1.744       150        21     2.349
----------------------------------------------------------
Other businesses        260        33      (496)      505
----------------------------------------------------------
Services                254         6        27        59
----------------------------------------------------------
Corporate
Structure              211       (27)     (619)      154
----------------------------------------------------------
Adjustments among
activities            (845)        6         -       333
----------------------------------------------------------
TOTAL                16.739     3.582     1.270    27.741
----------------------------------------------------------


The net result by activities includes the effect of the
Ministerio de Hacienda official reply to ENDESA's inquiry,
regarding the company of the ENDESA Group to which the early
retirement programs tax credit should be applied. As a result of
this inquiry, the anticipated tax has been reallocated among the
different companies of the Group, with no effect at a
consolidated level. The main effects have been a negative Euro
541 million in the Holding Company and Euro 272 million and Euro
246 million in Generation and Distribution respectively. The
balance of the positive effect basically corresponds to services
for an amount of Euro 20 million.

6 Cash Flow, Investments and Financing

Cash flow from operations amounted to Euro 4,285 million during
2002, a 28% increase over 2001.

This cash flow allowed covering capital expenditures and
intangibles which amounted to Euro 2,470 million, payment of the
dividend to ENDESA's shareholder in the amount of Euro 723 and to
minorities in the amount of Euro 116 million as well as payment
of previously provisioned commitments, such as pensions and
payroll reductions, in the amount of Euro 440 million, which
includes the externalisation of the pension fund materialised in
2002.

In 2002, funds from asset disposals amounted to Euro 1,889
million, of which Euro 1,684 million correspond to the sale of
87.5% of Viesgo. In addition, in December 2002, an advance
payment of Euro 485 million was received from Red Electrica de
Espana (REE) for the sale of the mainland transmission network
that will be made in 2003.

On the other hand, financial investments amounted to Euro 1,493
million, including the tariff deficit in Spain corresponding to
the regulated business and the extra peninsular systems amounting
to Euro 706 million to be cashed in more than one year time,
thereby accounted as financial investment.

Other financial investments include capital increases subscribed
in AUNA and Smartcom for Euro 273 and 57 million respectively,
and the acquisition to Telecom Italia of an additional 2% of AUNA
for Euro 159 million.

The acquisition of shares in consolidated companies corresponds
in its entirety to the acquisition of the additional 5.7% in
ENDESA Italia, already mentioned.

The breakdown of total investments in the period 2002 and its
comparison with 2001 is as follows:

                                            Euro Million
-----------------------------------------------------------------
                                                     Change
-----------------------------------------------------------------
                           2002      2001     Amount       %
-----------------------------------------------------------------
Capital Expenditures      2,372      2,403     (31)      (1.3)
-----------------------------------------------------------------
Intangibles                  98        141     (43)     (30.5)
-----------------------------------------------------------------
Financial                 1,366      2,890  (1,524)     (52.7)
-----------------------------------------------------------------
  Tariff deficit financing
   and islands compensations 706       ----     706        N/A
-----------------------------------------------------------------
  Other financial
   investments               660      2,890  (2,230)     (77.2)
-----------------------------------------------------------------
Acquisition of shares in
consolidated companies      127         12    (115)       N/A
-----------------------------------------------------------------
Total investments           3,963      5,446  (1,483)     (27.2)
-----------------------------------------------------------------
Total investments without
regulated activities deficit3,257      5,446  (2,189)     (40.2)
-----------------------------------------------------------------

Following the investment control strategy carried out by ENDESA
towards leverage reduction contemplated in it Strategic Plan
2002-2006, 2002 total investment decreased by 40.2% against 2001,
excluding the tariff deficit financing and the extrapeninsular
compensations. Even including this deficit, total investment
decreased by 27.2%.

The breakdown of capital expenditures by line of business is as
follows:

                               Euro Million
                   Electricity business
-----------------------------------------------------------------
                Spain       Latin       Europe    Other    Total
                          America               Business
-----------------------------------------------------------------
Generation        604           276         241        -    1,121
-----------------------------------------------------------------
Distribution      658         402(*)          -        -    1,060
-----------------------------------------------------------------
Others             88            32           4       67      191
-----------------------------------------------------------------
Total           1,350           710         245       67    2,372
-----------------------------------------------------------------

* Including the investment in the second transmission line
between Brazil-Argentina.

It is important to highlight, that in accordance with the 2002-
2006 Strategic Plan, the remarkable investment control above
mentioned, did not affect the capital expenditures in the
Electricity business in Spain.

Particularly the capital expenditures in the distribution
business in Spain amounted to Euro 658 million, or 48.7% of the
capital expenditure carried out by ENDESA in the electricity
business in Spain and a 11.3% increase against 2001. On the other
hand, generation capital expenditures in Spain amounted to Euro
604 million, mainly in the deployment of new combined cycle power
plants.

Financing activity wise, in 2002 ENDESA made long term financing
transactions for an amount of Euro 2,048 million and an average
life of 5.6 Years. Additionally, in February 2003, Euro 700
million bond was issued under ENDESA's Euro Medium Term Notes
(MTN's) program maturing in 10 years and closed a "Club Deal"
with 14 banks in the amount of Euro1.5 billion maturing in 2008,
and a bilateral loan of Euro 50 million maturing in 2009.

As of today, there are credit lines available for an amount of
Euro 2,514 million approximately and cash investments for Euro
1,060 million.

CONTACT:  Jacinto Pariente
          North America Investor Relations Office
          Phone: (212) 750 7200
          Web Site: http://www.endesa.es


SANTA ISABEL: Cencosud To Proceed With Purchase
-----------------------------------------------
Chilean retailer Cencosud is sticking to its plans to buy Royal
Ahold NV's Santa Santa Isabel supermarket chain in Chile despite
the Dutch retail giant's admission of accounting irregularities.

"We've got a deal signed with Ahold and what's happening to its
operations in other countries won't affect this agreement," an
Cencosud source told Dow Jones Newswires Tuesday.

Ahold admitted this week that it overstated operating earnings by
more than US$500 million during the past two years. In addition,
the Dutch retailer said that it's investigating bookkeeping at
its U.S. Foodservice unit and its Argentine retailer Disco, which
partly owned Santa Isabel until Ahold took full control late last
year.

Cencosud, which agreed on Feb. 6 to buy Santa Isabel - 97%-owned
by Ahold - for around $150 million, said it has so far, seen no
evidence that accounting errors at Ahold could extend to Chilean
operations.

"We're in the middle of due diligence and there's a chance we
might get a better bargain, but at least at present there's
nothing to change the terms," the source said.

According to Dow Jones, the US$150-million price tag for Santa
Isabel's 77 stores in Chile includes the possible assumption of
the supermarket retailer's debt amounting to some US$115 million.

The transaction's final price will be determined approximately by
late March, once due diligence has been carried out.

Via its Jumbo hypermarket chain, Cencosud presently controls 8.8%
of Chile's supermarket sector. By taking over Santa Isabel, which
holds a 9.5% market share, Cencosud will become the second-
biggest player in the domestic market behind D&S SA (DYS), which
holds 30%.

CONTACT:  Royal Ahold
          Investor Relations:
          Huibert Wurfbain, 011-31-75-659-5813
          or
          Media Relations:
          Annemiek Louwers, 011-31-75-659-5720
          or
          Taylor Rafferty New York
          Media Relations:
          Ethan Sack, 212/889-4350
          or
          Taylor Rafferty London
          Media Relations:
          Matthew Nardella, + 44 20 7936 0400



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

PAZ DEL RIO: University To Produce Report In A Fortnight
--------------------------------------------------------
The National University of Colombia is expected to produce in two
weeks' time a report that would help Colombian steelmaker Acerias
Paz del Rio decide on an industrial reconversion plan, Business
News Americas reports.

According to a company spokesperson, the report is ready and is
currently in the hands of the country's economic development
ministry, which is preparing a presentation to be made to
Colombian President Alvaro Uribe.

"It's possible that either this week or next they [the ministry]
will have the presentation ready, and then a meeting with the
president will be scheduled," the spokesperson said.

Once the presentation is ready, company executives will meet with
President Uribe to discuss the plans and decide how to proceed
with it.

The plan is aimed at cutting costs by an estimated US$32/t and
doubling output to 500,000t/y within seven years. A Paz del Rio
director told Business News Americas previously that the plan
would cost around US$45 million if it were to involve new
equipment, including a continuous casting machine to produce
billets and a ladle furnace.

Uribe has pledged support, in the form of loan guarantees, to
finance the technological conversion.

But while the finance question is not resolved, nor that of a
trustee for the Company, which is in a form of bankruptcy
protection, no concrete steps can be taken to obtain resources,
the spokesperson said.

There are three potential investors interested in financing the
industrial conversion project, one from the Colombian department
of Antioquia and two from the United States.

On the question of a trustee, President Uribe proposed naming a
university that would in turn appoint someone to replace the
previous trustee, Gilberto Gomez, who resigned.

Bankruptcy protection law 550 is not clear on the issue, and the
government wants to introduce a modification that would allow
universities to play a role in appointing a trustee.

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


SEVEN SEAS: Announces Closing of Producing Properties' Sale
-----------------------------------------------------------
Seven Seas Petroleum Inc. (OTC Pink Sheets: SVSSF) announced the
closing of the sale of its Colombian subsidiaries' interest in
the shallow Guaduas Oil Field inclusive of the 40-mile Guaduas-La
Dorada Pipeline to Sociedad Internacional Petrolera, S.A.
(Sipetrol). The purchase price is $20 million, subject to certain
adjustments and taxes.

Seven Seas is operating under the administration of a court-
appointed trustee under Chapter 11 of the United States
Bankruptcy Code. The Company has no source of cash flow from
operations and is currently seeking to secure additional
financing to test and complete the Escuela 2 exploration well.

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

Statements regarding anticipated oil and gas production and other
oil and gas operating activities, including the costs and timing
of those activities, are "forward looking statements" within the
meaning of the Securities Litigation Reform Act. The statements
involve risks that could significantly impact Seven Seas
Petroleum Inc. These risks include, but are not limited to,
adverse general economic conditions, operating hazards, drilling
risks, inherent uncertainties in interpreting engineering and
geologic data, competition, reduced availability of drilling and
other well services, fluctuations in oil and gas prices and
prices for drilling and other well services and government
regulation and foreign political risks, as well as other risks
discussed in detail in the Seven Seas Petroleum Inc.'s filings
with the U.S. Securities and Exchange Commission.

CONTACT:  Seven Seas Petroleum Inc.
          Daniel Drum, Investor Relations
          Tel: +1-713-622-8218
          Web site: http://www.sevenseaspetro.com



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

ICE: Signs DSL Routers Agreement With GBM
-----------------------------------------
Costa Rican state power and telecom monopoly ICE signed an
agreement with IT provider GBM to acquire routers for the
country's broadband Internet backbone project, reports local
paper El Financiero.

The agreement, signed last Friday, requires GBM, distributor of
Cisco System's products in Central America, to install the
routers within 4 months. Cisco Systems will provide the equipment
for a total cost of US$25.2 million.

The project is expected to be fully operational on August, after
a trial version has been started last year. However, said the
report the government and ICE would have to reinstate a tender
process for the deployment of the DSL lines themselves, that was
suspended last year.

ICE's contract with GBM came under threat until the government's
comptroller rejected an appeal by French vendor Alcatel last
month.

Earlier this year, Costa Rican Finance Minister Jorge Walter
Bolanos said that the country would not push for ICE's
privatization, despite a misunderstanding between the Company and
the government over ICE's budget.



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J A M A I C A
=============

AIR JAMAICA: COO & President Leaves Post
----------------------------------------
Air Jamaica Chief Operating Officer and President Bruce Nobles
resigned from his post, according to an article released by in
RJR News. A company press release said Mr. Nobles found it
difficult being separated from his family in Texas.

However, Mr. Nobles would be staying with Air Jamaica as a
consultant, on a part-time basis. He has served as the airline's
president since June 2002.

The airline also announced that Chief Executive Officer Chris
Zacca will assume the responsibilities of the company's day-to-
day operations.

It is not clear whether the airline's problems figure in Mr.
Noble's resignation. Last month, the airline asked the Jamaican
government for aid.

CONTACT: Air Jamaica
         4 St. Lucia Avenue
         Kingston 5,
         Jamaica
         Phone: 876/922-3460
         Fax: 929-5643
         Email: webinfo@airjamaica.com
         Contact:
         Gordon Stewart, Chairman
         Allen Chastanet, Vice President for Marketing and Sales



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

BANCO INTERNACIONAL: New York Unit Voluntarily Liquidates Assets
----------------------------------------------------------------
Banco Internacional, S.A., disclosed the voluntary liquidation of
its New York agency, located at 437 Madison Avenue, New York. The
agency will cease operations on April 30, 2003.

Any person or entity with a claim against the New York agency is
directed to submit its claim on or before March 31, 2003, to:

            Banco Internacional, S.A., New York Agency
            437 Madison Avenue, 17th Floor
            New York, NY 10022
            Attn: Carlo Martinez, EVP and General Manager

Banco Internacional was Mexico's fifth largest commercial bank in
terms of total assets with a 7.3% market share at end- September
2002.


VITRO: Reports Unaudited Fourth Quarter And Fiscal 2002 Results
---------------------------------------------------------------
Results for the year reflected continued weakness in the US and
Mexican economies. This particularly affected sales at Flat Glass
and Glassware. Glass Containers results, on the other hand, were
less affected by the macroeconomic environment, particularly in
the domestic market, and benefited from Vitro's strategy to
target niche specialty product markets. Vitro's management is
aggressively implementing several initiatives to further
strengthen its operations. Three key strategic initiatives are:
focusing on niche markets; shifting sales to the more profitable
auto replacement market; and, implementing measures to improve
productivity across all businesses.

- Consolidated net sales for the year, excluding Ampolletas,
remained unchanged YoY at US$2,343 million despite
unfavorable economic conditions. For the quarter, sales decreased
YoY by 3.0 percent to US$574 million

- Consolidated EBITDA for the year decreased YoY by 7.9 percent
to US$403 million and for the quarter declined YoY by 20.1
percent to US$78 million

- Exchange rate losses for US$152 million, which are non-cash
items, affected the US$7 million consolidated net income for the
year

- Consolidated outstanding debt decreased YoY by 10.8 percent, or
US$161 million, to US$1,336 million. This considers the cash
available from the net proceeds of a medium term note in Mexican
pesos issued on December 30, 2002 and the net obligation of a US
private placement

- Consolidated net sales. Consolidated net sales for the year
declined YoY 1.1 percent to US$2,343 million. Excluding the
effect of Ampolletas, which was divested in April 2002 and had
sales of US$29 million for fiscal 2001 and US$9 million through
April 2002, sales for the year would have remained unchanged.
Glass Containers continued its solid results for the year and
increased sales by 0.9 percent despite the Ampolletas
divestiture. Net sales for the quarter declined by 5.6 percent,
or US$16 million, at Flat Glass, by 1.7 percent, or US$4 million,
at Glass Containers, and by 8.3 percent, or US$6 million, at
Glassware. The decline in sales at Flat Glass and Glassware was
mainly due to continued adverse market and economic conditions in
both Mexico and the U.S. At Glass Containers, the YoY comparison
was negatively impacted by the divestiture of Ampolletas.
Excluding sales at Ampolletas, sales at Glass Containers would
have risen by 1.4 percent, while consolidated net sales would
have declined by 3.0 percent vs. actual 4.1 percent for the
quarter.

- Consolidated EBITDA. Consolidated EBITDA for the year, declined
by 7.9 percent to US$403 million, reflecting the continued
weakness in macroeconomic conditions. For the quarter, EBITDA at
Flat Glass, declined by 36.0 percent, or US$14 million, as a
result of some non-recurring charges, continued weakness in
demand from the non-residential construction in the U.S. and OEM
auto segments, pricing pressures that affected margins and
increased costs in the domestic construction segment. At Glass
Containers, EBITDA rose by 0.4 percent, or US$0.2 million, mainly
as a result of improved efficiencies, the implementation of cost
saving measures and a more favorable sales mix in the domestic
market. At Glassware, EBITDA declined by 15 percent, or US$2
million, mainly due to lower profitability in the plastics
segment, which accounted for 64 percent of the decline, and
pricing pressures that affected margins in both segments as
imports into the Mexican market increased driven by a strong
peso.

- For the year, the Company reported consolidated net income of
US$7 million, which reflected the negative impact of an exchange
loss, non-cash, of US$152 million. For the quarter, consolidated
net loss was US$6 million, compared with consolidated net income
of US$38 million for the fourth quarter of 2001. This was mainly
due to the YoY increase in total financing cost resulting from
exchange losses in the amount of US$20 million.

- On December 31, 2002, consolidated outstanding debt was
US$1,455 million. This amount considers the issuance of a Ps$1.0
billion, six-year, bullet, medium term note (MTN*) issued in the
Mexican market on December 30, 2002. It also considers the full
obligation of a US private placement. Net of these proceeds and
the net obligation of the above-mentioned private placement,
consolidated outstanding debt decreased YoY by 10.8 percent, or
US$161 million to US$1,336 million, and QoQ increased by
approximately US$5 million.

On December 31, 2002, leverage (total debt/EBITDA) was 3.7 times,
compared with 3.3 times on December 31, 2001. Net of the effect
of the above mentioned issues, leverage on December 31, 2002,
would have remained stable at 3.3 times.

Consolidated Results

Sales

Consolidated net sales for the quarter decreased YoY by 4.1
percent, or US$25 million, to US$574 million. This was the result
of declines at Flat Glass of 5.6 percent or US$16 million; at
Glass Containers of 1.7 percent or US$4 million; and at
Glassware, of 8.3 percent or US$6 million. The YoY comparison was
negatively impacted by the divestiture on April of 2002 of
Ampolletas, a company of Glass Containers, which accounted for
one third of the YoY decline. In 2001, sales at Ampolletas were
US$7.3 million for the fourth quarter and US$29 million for the
year. Excluding sales at Ampolletas for the fourth quarter of
2001 from the YoY comparison, sales at Glass Containers would
have risen by 1.4 percent, while consolidated net sales would
have declined by 3.0 percent, instead of 4.1 percent. Flat Glass'
sales declined mainly due to: the continued weakness in the U.S.
economy, particularly the nonresidential construction sector in
the U.S. and the OEM auto segment; and pricing pressures as
imports into the Mexican market increased during the year driven
by the strong peso. Glass Containers' sales (excluding
Ampolletas) positively reflected the business unit's strategy to
enter niche specialty product markets within segments such as
wine & liquor, cosmetics and food. Additionally, during the
fourth quarter the beer segment in Mexico continued to perform
ahead of the general economic trend.

Glassware's sales were negatively impacted by the continued
weakness in the Mexican and U.S. economies and the rise in
imports into the Mexican market driven by the strong peso. Sales
were also affected by pricing pressures, especially in the retail
segment, and decreased demand in the plastic segment. For the
year, consolidated net sales declined 1.1 percent, or US$26.6
million, to US$2,343 million. However, excluding the effect of
Ampolletas, which had sales of US$29 million for fiscal 2001 and
US$9 million through April 2002, sales for the year would have
remained stable. Glass Containers posted a solid year, despite
the divestiture of Ampolletas, increasing sales YoY by 0.9
percent to US$977 million.

EBIT and EBITDA
Consolidated EBIT and EBITDA for the quarter decreased YoY by
34.7 and 20.1 percent, respectively, to US$26 million and US$78
million.

Flat Glass' EBIT and EBITDA decreased by 67.3 and 36.0 percent,
or US$16 and US$14 million, respectively, due to: the decrease in
sales of US$16 million explained above; cost increases which
included non-recurrent charges, derived by inventory write-offs;
and pricing pressures in the automotive and domestic construction
markets that affected margins. Glass Containers' EBIT and EBITDA
increased by 23.0 and 0.4 percent, or US$4 and US$0.2 million,
respectively, as a result of improved operating efficiencies,
especially in the glass domestic operations, and better capacity
utilization.

Glassware EBIT and EBITDA decreased by 29.2 and 15.0 percent, or
US$2 and US$3 million, respectively, due to: the decrease in
sales of US$6 million described above, increases in the cost of
raw materials within the plastic sector, and lower fixed cost
absorption as a result of lower capacity utilization.

For the year, consolidated EBIT and EBITDA declined by 13.9 and
7.9 percent, or US$32 and US$34 million, respectively, reflecting
the continued weakness in macroeconomic conditions.

Financing Cost
During the quarter, the Company recorded a consolidated financing
cost of US$31 million, compared with a consolidated financing
gain of US$15 million for the same quarter of 2001. The decrease
is explained by exchange losses during the quarter, which were
non-cash items. The weighted average cost of debt for the quarter
was 9.1 percent, similar to the same period of 2001. Interest
expenses for the quarter were US$37 million, compared with US$34
million for the fourth quarter of 2001. The 7.9 percent YoY
increase in interest expenses included costs from derivative
transactions.

Foreign exchange loss for the quarter was US$20 million,
representing 63 percent of the total financing cost, and it was
due to the 2.0 percent depreciation of the Mexican peso against
the U.S. dollar over the period. This loss had no impact on the
Company's cash position. For the year, the Company recorded a
total financing cost of US$223 million, compared with US$59
million for fiscal 2001. Even tough interest expenses decreased
YoY by 16.9 percent, a higher non-cash foreign exchange loss of
US$152 million, as a result of the 13.8 percent depreciation of
the Mexican peso against the U.S. dollar during the year,
accounted for the majority of the increase.

During fiscal year 2002 the Company entered into cross-currency
swap transactions that as of December 31, 2002, covered a total
of US$323 million and interest rates related derivatives for up
to US$695 million. Such transactions were part of the Company's
strategy to offset future increases in U.S. and Mexican interest
rates and a possible abrupt devaluation of the local currency,
therefore reducing the uncertainty of the cash flow generation.

Taxes
For the quarter, the YoY increase in accrued income taxes is due
mainly to higher taxable gains in some of our foreign operations
which are not consolidated for Mexican tax purposes. The deferred
income tax decrease from US$21 million in 4Q'01 to US$(-7)
million in the same quarter of 2002 is due to exchange losses
byproduct of the Mexican peso devaluation during the year and the
decrease in sales by the reasons previously explained. For fiscal
2002, the Company posted a negative US$85 million deferred income
tax, mainly as a result of the reduction of the Mexican legal
income tax rate, mentioned in previous quarters.

Consolidated Net Income
For the quarter, the Company posted a consolidated net loss of
US$6 million, compared with consolidated net income of US$38
million for the same period of 2001. This was mainly the result
of the above-mentioned increase in total financing cost and other
extraordinary expenses related to the write-off of certain fixed
assets and severance payments in connection with headcount
reduction as part of the ongoing downsizing program at the
corporate level announced in conjunction with 3Q02 results.

For the year, the Company reported consolidated net income of
US$7 million, a YoY decline of 88 percent from US$62 million for
fiscal 2001, due mainly to the above-mentioned increase in total
financing cost and EBIT decrease.

Capital Expenditures
During the fourth quarter, the Company made capital expenditures
(CAPEX) for a total of US$33.5 million, nearly all for
maintenance purposes. Of these, US$16 million were invested at
Flat Glass, US$14 million at Glass Containers and US$4 million at
Glassware. CAPEX for the year was in line with the Company's
initial expectation of US$100 million. For the year, a total of
US$47 million were invested at Flat Glass, of which US$18 million
corresponded to the purchase of a Glass Containers' facility in
Mexicali, US$58 million at Glass Containers and US$13 million at
Glassware, nearly all for maintenance purposes.

Consolidated Financial Position
On December 31, 2002, consolidated outstanding debt was US$1,455
million, compared with US$1,370 million on September 30, 2002.
Consolidated outstanding debt rose QoQ by US$85 million, mainly
as a result of the issuance of a Ps.1.0 billion, six-year,
bullet, medium term note (MTN*) issued in the Mexican market on
December 30, 2002. Proceeds from this MTN will be used to
strengthen the financial position of the Company. Consolidated
outstanding debt as of year-end 2002 also considers the full
obligation of a U.S. private placement. Net of these proceeds and
the net obligation of the above-mentioned private placement,
consolidated outstanding debt decreased YoY by 10.8 percent, or
US $161 million to US$1,336 million, and QoQ increased by
approximately US$5 million.

On December 31, 2002, leverage (total debt/EBITDA) was 3.7 times,
compared with 3.4 times on September 30, 2002 and 3.3 times on
December 31, 2001. Net of the effect of the above mentioned
issues, leverage on December 31, 2002, would have remained stable
at 3.3 times.

Debt Profile as of December 31, 2002

- Continuing with the Company's strategy of strengthening its
financial structure, short-term debt decreased QoQ by US$34
million to US$458 million, thus increasing the average life of
Vitro's debt to 3.1 years, (and 3.2 years net of the effect of
the MTN issue on a pro-forma basis) from 3.0 years for the third
quarter of 2002, and from 1.8 years at December 31, 2001.

- Long-term debt represented 69 percent of total debt as of
December 31, 2002 versus 64 percent as of December 31, 2001. Net
of the effect of the MTN issue, long-term debt would have been 73
percent on a pro-forma basis.

- 50 percent of debt maturing in the period January 2003 -
December 2003, or approximately US$228 million, was related to
trade finance.

Cash Flow
Starting with the fourth quarter of 2002, the Company aligned its
definition of "Working Capital" to include other current assets
and liabilities in addition to the variations in clients,
inventories and suppliers. For ease of comparison, working
capital for 2001 was adjusted to reflect this new definition.

For the quarter, net interest expense declined as a result of a
lower debt level and lower financing costs; working capital
decreased by US$16 million. Dividends paid for the period
corresponded to minority interest from joint venture partners in
Central America. The Company recovered US$16 million on tax
returns that more than offset taxes paid for the quarter. On
summary, net free cash flow for the quarter was US$14million,
compared with US$76 million for the fourth quarter of 2001.

For the year, the decrease in EBITDA was compensated by lower
interest expenses, dividends and cash taxes paid. However, a
total investment of US$85 million in working capital and higher
capital expenditures resulted in a net free cash flow of US$8
million. For 2002, other extraordinary cash inflows, from the
divestitures of Acros Whirlpool and Ampolletas, were a total of
US$143. 4 million. Excess cash flow was mainly used to pay down
debt.

Sales
Sales for the quarter declined YoY by 5.6 percent, to US$265
million, from US$281 million for the same quarter in 2001. This
was mainly due to the continued weakness of the U.S. economy;
particularly the non-residential construction sector in the U.S.
and the OEM auto segment, which declined YoY; and pricing
pressures, mainly in the commodity segment, as imports into the
Mexican market increased driven by the strong peso. The impact of
these factors was only partially compensated by increases in
sales to the auto replacement market in Mexico and at Vitro
Cristalglass in Spain, where sales increased YoY by 31.4 percent.
Domestic sales for the quarter declined YoY by 11.4 percent to
US$78 million. This was mainly due to a sales volume decline to
the OEM auto segment, despite an improvement in the sales mix
toward more value-added products. Volumes also declined slightly
in the construction segment, with sales shifting to the export
market as a consequence of the slowdown of the Mexican economy.
Export sales for the quarter declined YoY by 4.4 percent to US$62
million mainly due to a decline in volume and prices of the OEM
auto segment.

Vitro America's sales to the non-residential construction segment
in the U.S. continue to be affected by excess availability of
office space due to the decline in business activity, especially
on the West Coast of the U.S. Sales at Vitro Cristalglass
increased by 31.4 percent, driven by higher sales from the
distribution segment. For the year, domestic sales declined by
10.1 percent to US$320 million. This was partially compensated by
a 4.7 percent increase in export sales, to US$272 million, in
particular to the auto segment. Volumes were up for both the
construction and auto segments, while prices remained stable in
the case of construction and declined for the auto segment,
especially the OEM, which is the sector where prices are under
constant pressure.

EBIT and EBITDA
Consolidated EBIT for the quarter was US$8 million, representing
a YoY decline of 67.3 percent. This was mainly due to the decline
in sales explained above and US$9 million in extraordinary
charges related to the write-off of inventories previously
mentioned in the 3Q'02 earnings report, as well as increases in
the following costs: direct materials for the auto segment,
maintenance and freight; the latter due to the shift in sales to
export markets. EBIT margin was affected by pricing pressures and
the shift in sales toward the less profitable export market.

EBITDA for the quarter was US$26 million, reflecting a 36.0
percent YoY decrease, as a result of the factors discussed above.

Management continued in its efforts to shift sales of the OEM
auto segment toward the more profitable auto replacement market
by improving the utilization of existing distribution channels to
partially offset pricing pressures and by increasing production
of car sets with better margins for import car models within the
domestic auto replacement market. For the year, sales produced in
Mexico (excluding Vitro America) to the auto replacement market
increased to 37 percent of total sales to the auto industry, from
33 percent for fiscal 2001.

Management is currently working on several initiatives to enhance
synergies with its foreign subsidiaries, including increasing
purchases by Vitro America of glass produced by the Mexican
operations, which is expected to improve consolidated margins.
Also, at Vitro America, the Company started implementing
different initiatives to optimize its distribution network.

Other initiatives include increasing efficiencies of the furnaces
by reducing the number of products produced by the float glass
process and focusing on those with the highest margins and
demand. Other products are being purchased from third parties,
and finished by Vitro according to each client's requirements. In
addition, Flat Glass sales are expected to benefit from the start
up of operations during the second half of 2003 of the new
furnace currently being built by the JV with Asahi. This new
furnace will provide additional capacity of 146,000 tons per
year, which will be used 50/50 by the JV partners.

Glass Containers
(42 percent of Consolidated Sales)

Sales
Consolidated sales for the quarter declined by 1.7 percent to
US$241 million, from US$245 million. This was mainly due to the
divestiture of Ampolletas on April of 2002, which had net sales
of US$7.3 million for the fourth quarter of 2001. Excluding the
effect of these sales on the YoY comparison, sales for the fourth
quarter of 2002 would have increased by 1.4 percent.

For the quarter, net sales of glass products accounted for
approximately 85 percent of the business unit's sales. Average
prices for the period were stable for both, the domestic and
export markets.
Domestic sales (excluding Ampolletas) were up by US$7 million to
US$156 million. Sales to the beer and the wine & liquor segments,
and to a lesser degree, to niche markets within the food segment,
continued to be strong. This was offset by a 7 percent decline in
sales at the business unit's subsidiary in Central America, due
to lower demand in that region.

Exports declined by 4.2 percent YoY to US$53 million. Exports to
the wine and liquor segments, especially to the West Coast of the
U.S., and the cosmetic segments improved. This increase, however,
was not enough to compensate for the decline in sales in other
segments explained partially by a cold winter that impacted sales
to the soft drink segment in the U.S.

For the year, consolidated sales rose by 0.9 percent to US$977
million, with the improvement resulting mainly from strong
demand, both at the domestic operations and foreign subsidiaries.
Excluding the effect of Ampolletas on the YoY comparison, sales
for the year would have increased by 3.2 percent. Ampolletas
sales for fiscal year 2001 were US$29 million, and US$9 million
for the period through April 2002, when the company was divested.

Due to a strong demand, the business has been working at full
capacity, reflecting the business unit's strategic position
within the region. As a result, it is currently in the process of
aligning production capacity with demand by increasing capacity
at the Queretaro facility to better serve the soft drink and beer
segment.

EBIT and EBITDA
EBIT for the quarter, increased YoY by 23.0 percent to US$23
million, mainly due to increased sales, an improvement in
operating efficiencies, better capacity utilization and sales mix
in the domestic market. EBIT margin improved YoY by 190 basis
points to 9.5 percent.

EBIT for the quarter at Vancan, the aluminum can subsidiary, rose
YoY as a result of higher sales and increases in productivity.

EBITDA for the quarter rose YoY by 0.4 percent to US$46 million,
mainly due to the factors discussed above.

Glassware
(11 percent of Consolidated Sales)

Sales
Sales for the quarter declined YoY by 8.3 percent to US$65
million, mainly as a result of a 6.5 percent decline in sales at
the glass segment of this business. This was mainly due to an
increase in glassware imports into Mexico favored by the strong
peso, the YoY decline in import duties and continued weak
consumer confidence. Glass sales accounted for approximately 82
percent of total sales at the Glassware business unit, compared
with 80 percent for the same quarter of 2001.
Sales at the plastic subsidiaries declined YoY by 15.6 percent,
mainly due to lower demand for promotional products within the
industrial segment and pricing pressures within the disposable
dishware segment, especially with retailers. For the year, sales
declined YoY by 4.9 percent to US$256 million, mainly due to same
factors that impacted the quarter.

EBIT and EBITDA
EBIT for the quarter decreased YoY by 29.2 percent to US$6
million, mainly as a result of a decline in profitability of the
plastic business caused by lower fixed cost absorption within the
industrial segment and lower sales, as well as a YoY increase in
raw materials costs of oil sub-products. Additionally, margins
were impacted by pricing pressures in the disposable dishware
segment, as a result of over capacity in the sector, and in the
glass segment, especially due to imports. EBITDA for the quarter
was US$12 million, reflecting a YoY decrease of 15 percent,
resulting from the factors discussed above.
Management continues to focus on improving customer service,
while leveraging on its distribution channels and traditional
quality product line. In addition, management is focusing on
product innovation and the degree of quality demanded in the
medium and high-end markets.

Key Developments
Debt Refinancing
On December 30, 2002, the Company issued a MTN in the Mexican
market for Ps.1 billion, six-years, bullet, maturing on December
22, 2008. On February 13, 2003, the Company placed another MTN in
the Mexican market for Ps. 1.14 billion, maturing on February 5,
2009, bullet. Proceeds from both issues will be used mainly to
extend the average life of Vitro's debt profile at the holding
company level by replacing short-term debt and current maturities
of long-term debt.

With these transactions, Vitro continued to focus on
strengthening its financial position and improving its debt
profile, while maintaining a presence in the capital markets. The
program and both issues were granted a rating of AA- (mex) by
Fitch México, S.A. de C.V., the rating agency.

The Company is in the process of finalizing a US$200 million
syndicated loan facility within Flat Glass to improve the
business unit's debt profile. The average life of the facility is
2.5 years. Proceeds are being used to pay down mostly short -term
maturities and some long-term debt with less favorable financial
conditions. After the closing of these transactions, the average
life of the Company's consolidated net outstanding debt improved
on a pro-forma basis, as of December 31, 2002 to 3.4 years, from
3.1 years with long-term debt accounting for 77 percent of total
debt.

Joint Venture in Portugal
As part of Vitro's strategy to grow within value-added segments
and to increase its presence in Europe, especially in the Iberic
Peninsula Vitro Cristalglass, the Company's subsidiary in Spain,
recently completed a 60/40 joint venture with the Portuguese
company Vidraria Chaves Lda. This will allow the Company to
expand its operations and better serve the European flat glass
market with value-added products by integrating a total of four
manufacturing facilities and three distribution centers to meet
demand for laminated glass and double glazing products in Spain,
Portugal, and France. The 60 percent stake in the JV was acquired
for approximately US$3 million. The new company employs 55
people, dedicated to manufacturing glass and glazing products for
the industrial, commercial and home segments.

Long-Term Supply Agreement
On February 19, 2003, a power and steam generation facility was
inaugurated in the metropolitan area of Monterrey, Nuevo Leon,
home to several Vitro facilities. This cogeneration plant was
built and is to be operated by Tractebel, a french-belgian energy
group.

Vitro will be one of main customers of this facility, using 104
of the 245 Megawatts of capacity and all of the Steam generation
(approximately 1.3 million metric tons per year) under a 15-year
contract. Fifteen Vitro facilities in five states of Mexico are
part of this project.

This is the largest private sector project of its nature in
Mexico and will provide cost savings and increased availability
of power to Vitro and the other participants.

Savings for Vitro are estimated to average US$10 million per year
and the Commercial Operation Date is expected in the next few
weeks.

Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA), through its
subsidiary companies, is one of the world's leading glass
producers. Vitro is a major participant in three principal
businesses: flat glass, glass containers, and glassware. Its
subsidiaries serve multiple product markets, including
construction and automotive glass; fiberglass; food and beverage,
wine, liquor, cosmetics and pharmaceutical glass containers;
glassware for commercial, industrial and retail uses; plastic and
aluminum containers. Vitro also produces raw materials, and
equipment and capital goods for industrial use. Founded in 1909
in Monterrey, Mexico-based Vitro has joint ventures with major
world-class partners and industry leaders that provide its
subsidiaries with access to international markets, distribution
channels and state-of-the-art technology. Vitro's subsidiaries
have facilities and distribution centers in eight countries,
located in North, Central and South America, and Europe, and
export to more than 70 countries worldwide. For further
information, please visit our website at: http://www.vitro.com

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

CONTACTC:  Vitro S.A. de C.V.
           Investor Relations
           Beatriz Martínez
           Tel: + (52) 81-8863-1258
           Email: bemartinez@vitro.com

           Breakstone & Ruth International
           U.S. agency
           Luca Biondolillo / Susan Borinelli
           Tel: (646) 536-7012 / 7018
           Email: Lbiondolillo@breakstoneruth.com
           Email: Sborinelli@breakstoneruth.com

           Media Relations
           Albert Chico
           Vitro, S. A. de C.V.
           Tel: + (52) 81-8863-1335
           Email: achico@vitro.com



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P A R A G U A Y
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* Paraguay Reaches Debt Deal With International Creditor Banks
--------------------------------------------------------------
Paraguay struck an agreement with several international banks
over payment of US$21 million in outstanding bonds the government
defaulted on, reports Business News Americas, citing a central
bank spokesperson.

International and local banks holding US$21 million in sovereign
bonds had a "put" option to demand full payment last December,
but the government did not have enough cash on hand to comply
with its obligations.

A host of international banks including Citibank, Sudameris, SCH,
Banco do Brasil and Banco de la Republica de Uruguay have now
agreed to accept a 30% partial payment and the balance when the
bonds come due in 2005, the spokesperson said.

Other banks such as ABN Amro and Spain's BBVA did not accept the
partial payment and instead will earn interest on the principal
until 2005, according to the spokesperson.

The government's failure to honor its obligations prompted
international rating agency Standard & Poor's to downgrade
Paraguay's long-term foreign currency credit rating to a
selective default rating SD, from B-.

The rating action was prompted by the government's failure to
honor the "put" option exercised by local bondholders of US
dollar-denominated debt. The terms and conditions of the debt
allow bondholders to exercise a "put" option every year until
maturity in 2005.

Although the government is in talks with the local banks that
hold the defaulted bonds "full repayment of this debt seems
unlikely in the coming weeks" given the Paraguayan government's
limited liquidity, S&P sovereign analyst Sebastian Briozzo said.



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

BANCO DE CREDITO: St. George Rejects Offer To Take Back Control
---------------------------------------------------------------
Uruguay suffered another blow in its attempts to draw bidders
into its ailing financial system, says Bloomberg.

Just two days after a failed attempt to auction Nuevo Banco
Comercial, the country's third-largest bank, an expected bidder
for Banco de Credito SA turned down an offer to buy back a
majority stake in the bank.

St. George Ltd., an investment arm of the Rev. Sun Myung Moon's
Unification Church, said it wouldn't try to reclaim a majority
stake in Banco de Credito.

"We do not want to be the majority shareholder," said Elizeu
Christiano Netto, vice president of Banco de Credito who
represents St. George Ltd. in Uruguay.

Banco de Credito's operations were suspended in August after it
ran out of cash. According to Finance Minister Alejandro
Atchugarry, the government was hoping St. George would inject at
least US$120 million to reclaim it.

Uruguay has held a 51% stake in the bank since 1998. Prior to its
suspension, the bank was one of Uruguay's 10 biggest.

Uruguay's bank workers had planned to hold a strike Thursday to
protest delays in lifting the suspension of Banco de Credito,
Juan Jose Ramos, an official at Uruguay's largest bank employees
union, AEBU, told El Pais newspaper.

The country promised in August, after a one-week shutdown of the
entire financial system, to close insolvent banks as part of an
agreement to tap US$3.8 billion in credits from the International
Monetary Fund, World Bank and Inter-American Development Bank.

The IMF, which in December held up a disbursement saying the
country hadn't solved liquidity problems in the banking sector,
last week said it reached a new agreement with Uruguay that would
free up US$480 million in the first half of this year.


BNL: Exiting Uruguay Due to Low Profitability
---------------------------------------------
Italy's Banca Nazionale del Lavoro (BNL) told Uruguay's central
bank that it is leaving the South American nation. Citing low
profitability levels, BNL said it will cease its operations in
Uruguay on June 30.

The news came as a surprise to Juan Jose Ramos, chairman of the
banking industry workers union AEBU. Ramos expressed his surprise
that the Italian bank would choose to leave Uruguay while
continuing to operate in crisis-ridden Argentina.

Ramos said BNL will have to negotiate the fate of its 20
contracted employees and 20 associated workers with the union.

AEBU's board met with the Italian ambassador to Uruguay, Giorgio
Malfatti, earlier this week to express their concern over BNL's
exit.

BNL originally operated in Uruguay as a financing house before
receiving the central bank's green light to operate as a bank in
2001.



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

CERRO NEGRO: Resumes Operations on Smaller Scale
------------------------------------------------
"Operadora Cerro Negro, an ExxonMobil (XOM) affiliate, confirms
that its upgrader operations have restarted with an initial
production of 50,000 barrels per day of upgraded crude," Dow
Jones reports, citing a company press release.

The national strike that hit Venezuela forced the extra-heavy
crude oil joint-venture between ExxonMobil and state oil company,
PdVSA, to cease operations in December last year, by cutting off
the gas feed needed for operations. Cerro Negro's pre-strike
daily output was an average of 390,000 barrels per day.

The strike nearly crippled Venezuela's oil industry. The
country's, oil output was reduced by about 90 percent during the
strike.

Strikers were clamoring for either the resignation of President
Hugo Chavez, or the implementation of early elections. Mr. Chavez
retaliated by dismissing thousands of oil workers. About US$4
billion in revenue was lost.

Since the strike ended, the country's oil industry is starting to
recover. In fact, Cerro Negro is the third operator to resume
operations, after Sincor and Hamaca. Another operator, Petrozuata
remains shuttered, said the report.


CITGO: Reduces 2003 Capex By US$200 Million
-------------------------------------------
Petroleos de Venezuela subsidiary, Citgo Petroleum Corporation
reduced its projected capital expenditures for this year by
US$200 million. Business News Americas cited the company's recent
8-K filing with the U.S. Securities and Exchange Commission
saying the reduction is caused by the disruption brought about by
a nation-wide strike that hit the country. The company now
expects this year's capital expenditure to be US$448 million.

In the filing the company said, "We have taken steps to reduce
our planned discretionary capital expenditures in 2003 by
approximately US$200mn and are continuing to review the timing
and amount of scheduled expenditures under our planned capital
spending programs."

Capital expenditure for the 2004-2007 period is projected at
about US$2.07 billion.

The company's 2002 net income went down by 55 percent, compared
to a US$180 million net income in 2001.

Citgo is supplied by its parent, Venezuelan state oil company,
PdVSA. But in the recent months, the strike has reduced the
amount of crude volumes Citgo is receiving. According to
BNAmericas, PDVSA supplies in December 2002 were 61% of the
supplies Citgo received in December 2001, and in January 2003 the
supplies were 94% of January 2002 levels. This month, Citgo
expects to receive about 80% of the regular supply.

When the strike broke out, Citgo was forced to pay higher prices
for alternative sources of crude oil to maintain normal
operations at its refineries. Suppliers shortened Citgo's payment
terms, in some cases requiring payment before delivery, which
hurt liquidity.

CONTACT:  Petroleos de Venezuela SA
          Head Office
          Apdo 169
          Avenida Libertador La
          Campina, Caracas
          Venezuela 1010-A
          Phone: +58 212 708 4111
          Fax:  +58 212 708 4661
          Home Page: http://www.pdvsa.com/
          Contact:
          Ali Rodriguez Araque, Chairman
          Jorge Kamkoff, Joint Vice Chairman
          Jose Rafael Paz, Joint Vice Chairman


CITGO: Notes Recent Developments and Risks in 8-K Filing
---------------------------------------------------------
Citgo related its take on the consequences of the recent
Venezuelan strike:

RECENT CRUDE OIL SUPPLY DISRUPTION

Our ultimate parent is PDVSA, the national oil company of the
Bolivarian Republic of Venezuela and our largest supplier of
crude oil. We have long-term crude oil supply agreements with
PDVSA for a portion of the crude oil requirements for our Lake
Charles, Corpus Christi, Paulsboro and Savannah refineries.

A nation-wide work stoppage by opponents of President Hugo Chavez
began in Venezuela on December 2, 2002, and has disrupted most
activity in that country, including the operations of PDVSA. A
large portion of PDVSA's employees abandoned their jobs during
the month of December. PDVSA has informed us that these actions
led to an employee termination process and an organizational
restructuring of PDVSA, which are expected to produce longer-term
savings at PDVSA. PDVSA also informed us that its production of
crude oil and natural gas, as well as the export of crude oil and
refined petroleum products, were severely affected by these
events in December, but that since then the production and export
of crude oil has been progressively increasing. While operations
have been hampered by work stoppage, some members of PDVSA
management have continued to work and PDVSA has restored a
portion of its output. PDVSA has reported that some employees are
returning to work and some qualified replacements are being
found.

We continue to be able to locate and purchase adequate crude oil,
albeit at higher prices than under the contracts with PDVSA, to
maintain normal operations at our refineries and to meet our
refined products commitments to our customers. In December 2002,
we received approximately 61 percent of the crude oil volumes
that we received from PDVSA in December 2001. In January 2003, we
received approximately 94 percent of the crude oil volumes that
we received from PDVSA in January 2002. In February 2003, we
expect to receive deliveries of approximately 80 percent of the
crude oil volumes that we received from PDVSA in February 2002.
For the three-year period ended December 31, 2002, we purchased
approximately 52 percent of our total crude oil requirements from
PDVSA. The reduction in supply from PDVSA and the purchase of
crude oil from alternative sources has had the effect of
increasing our crude oil cost and decreasing our gross margin and
profit margin from what they would have been had the crude oil
been purchased under our long-term crude oil supply contracts
with PDVSA.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity has been adversely affected recently as a result of
events directly and indirectly associated with the disruption in
our Venezuelan crude oil supply from PDVSA. That disruption
affected a portion of the crude oil supplies that we receive from
PDVSA, requiring us to replace those supplies from other sources
at higher prices and on payment terms generally less favorable
than the terms under our supply agreements with PDVSA. We
received approximately 43% and 91% of our contracted crude oil
volumes from PDVSA during December and January, respectively. We
expect to receive approximately 80% of our contracted crude oil
volumes from PDVSA during February. During this supply
disruption, we have been successful in covering any shortfall
with spot market purchases, but those purchases generally require
payment 15 days sooner than would be the case for comparable
deliveries under our supply agreements with PDVSA. This
shortening of our payment cycle has increased our cash needs and
reduced our liquidity. Also, a number of trade creditors have
sought to tighten credit payment terms on purchases that we make
from them. That tightening would further increase our cash needs
and further reduce our liquidity.

In addition, all three major rating agencies lowered our credit
ratings based upon, among other things, concerns regarding the
supply disruption. One of the downgrades caused a termination
event under our existing accounts receivables sale facility,
which ultimately led to the repurchase of $125 million in
accounts receivables and cancellation of the facility on January
31, 2003. That facility had a maximum size of $225 million, of
which $125 million was used at the time of cancellation. In the
ordinary course of business we maintain uncommitted short-term
lines of credit with several commercial banks. Effective
following the debt ratings downgrade, these uncommitted lines of
credit are not currently available. Our committed revolving
credit facilities remain available.

Letter of credit providers for $76 million of our outstanding
letters of credit have indicated that they will not renew such
letters of credit. These letters of credit support approximately
$75 million of tax-exempt bond issues that were issued previously
for our benefit. We are arranging for the repurchase of these
tax-exempt bonds. We expect that we will seek to reissue these
tax-exempt bonds with replacement letters of credit in support if
we are able to obtain such letters of credit from other financial
institutions or, alternatively, we will seek to replace these
tax-exempt bonds with new tax-exempt bonds that will not require
letter of credit support. We have an additional $231 million of
letters of credit outstanding that back or support other bond
issues that we have issued through governmental entities, which
are subject to renewal during 2003. We have not received notice
from the issuers of these additional letters of credit indicating
an intention not to renew. However, we cannot assure you that any
of our letters of credit will be renewed, that we will be
successful in obtaining replacements if they are not renewed,
that any replacement letters of credit will be on terms as
advantageous as those we currently hold or that we will be able
to arrange for replacement tax-exempt bonds that will not require
letter of credit support.

In August 2002, three of our affiliates entered into agreements
to advance excess cash to us from time to time under demand
notes. These notes provide for maximum amounts of $10 million
from PDV Texas, Inc., $30 million from PDV America and $10
million from PDV Holding. If a demand were to be made under these
notes, it would further tighten our liquidity. At December 31,
2002, the outstanding amounts under these notes were $5 million,
$30 million and $4 million, respectively.

Operating cash flow represents a primary source for meeting our
liquidity requirements; however, the termination of our accounts
receivable sale facility, the possibility of additional tightened
payment terms and the possible need to replace non-renewing
letters of credit has prompted us to undertake arrangements to
supplement and improve our liquidity. To date, we have undertaken
the following:

     - We have reduced our planned discretionary capital
expenditures in 2003 by approximately $200 million.

     - Effective February 20, 2003, we entered into a commitment
letter, which is subject to customary terms and conditions, with
an affiliate of Credit Suisse First Boston LLC for a $200 million
three-year term loan. The loan will bear interest at a floating
rate plus a spread and will be secured by our equity interests in
Colonial Pipeline Company and Explorer Pipeline Company.

     - On February 6, 2003, we signed a commitment letter with a
financial institution pursuant to which, subject to customary
terms and conditions, the financial institution has agreed to
provide us with a new non-recourse facility to sell trade
accounts receivable to independent third parties. The amount
funded under this facility will be limited to a maximum of $200
million outstanding at any one time.

In addition, we are working on a transaction that, if
consummated, could provide us with up to $100 million from the
transfer of title to a third party of certain of our refined
products at the time those products are delivered into the
custody of interstate pipelines. We would expect the terms of any
such agreement to include an option to acquire like volumes of
refined products from the third party at prevailing prices at
predetermined transfer points.

OUR BOARD OF DIRECTORS

On January 22, 2003, at the direction of PDVSA, our immediate
shareholder replaced four of our seven board members. One of the
four new directors had previously served on our board. All of our
newly appointed directors are employees of PDVSA. Our new board
of directors has met and conducted routine business for us,
including the approval of the Operating and Capital Budgets for
2003.

RISKS RELATED TO OUR RELATIONSHIP WITH PDVSA AND THE CURRENT
SITUATION IN VENEZUELA

THE VENEZUELAN ECONOMIC AND POLITICAL ENVIRONMENT HAS DISRUPTED
OUR CRUDE OIL SUPPLY.

A nation-wide work stoppage by opponents of President Hugo Chavez
began in Venezuela on December 2, 2002, and has disrupted most
activity in that country, including the operations of PDVSA. A
large portion of PDVSA's employees abandoned their jobs during
the month of December. PDVSA has informed us that these actions
led to an employee termination process and an organizational
restructuring of PDVSA. PDVSA also informed us that its
production of crude and gas, as well as the export of crude oil
and products, were severely affected by these events in December.

As a result, we have had to replace a significant amount of crude
oil we would normally have purchased under our PDVSA supply
contracts with purchases of crude oil on the spot market on
pricing and credit terms that are less favorable than we would
have obtained under the supply contracts. The price terms of our
supply contracts with PDVSA are designed to provide some
protection for our earnings and cash flow from market volatility.
When we are required to purchase crude oil on the spot market
instead of under our contracts we lose this protection. In
addition, spot market trading companies require us to pay for
delivered crude oil on 10-day or prompt-pay terms instead of the
30-day terms under which we would pay PDVSA pursuant to the
supply contracts. If we continue to be unable to purchase crude
oil under the PDVSA supply agreements due to events in Venezuela
or other factors, we could continue to experience significantly
greater volatility in our earnings and cash flow.

THE VENEZUELAN WORK STOPPAGE HAS PUT PRESSURE ON OUR LIQUIDITY.

The existence of the work stoppage and our ownership by PDVSA
have given rise to concerns about our financial condition.
Because of the uncertainty in Venezuela, all three major rating
agencies have reduced PDV America's and our debt ratings. The
reactions that have followed have increased the pressure on our
liquidity. We are seeking to replace these lost sources of
liquidity. However, we cannot assure you that we will be able to
establish new sources of liquidity. If we are not able to meet
our significant liquidity needs in the near future our financial
condition will be adversely affected.

WE MAY NOT BE ABLE TO ACCESS NEW SOURCES OF LIQUIDITY.

We cannot assure you that we will be able to close either our new
secured credit facility or our new accounts receivable facility.
The commitments that we have from financial institutions to
provide the new secured credit facility and the new accounts
receivable facility are each subject to a number of conditions
that may not be met. The credit agreement for the new secured
credit facility will also contain a number of closing conditions
that we may not be able to satisfy. In addition, we cannot assure
you that we will be able to realize the $100 million in
additional liquidity we expect to receive under the transaction
to transfer title of inventory at the time delivered into
interstate pipelines. We have no commitment in place for such
transaction at this time. Finally, we cannot provide any
assurances that we will be able to reissue any of the tax-exempt
bonds that we are arranging for the repurchase of. We may not be
able to obtain letters of credit to support such tax-exempt bonds
and we may not be able to replace these tax-exempt bonds with new
tax-exempt bonds that will not require letter of credit support.

If we cannot access any of these sources of liquidity our
financial condition will be adversely affected.

WE MAY NOT BE ABLE TO IMPLEMENT SUCCESSFULLY OUR DISCRETIONARY
CAPITAL EXPENDITURES PROJECTS.

Because of the liquidity risks described above, we have taken
steps to reduce our planned discretionary capital expenditures in
2003 by approximately $200 million and are continuing to review
the timing and amount of scheduled expenditures under our planned
capital spending programs, including regulatory and environmental
projects in the near term. Because of this reduction, we may be
unable to undertake discretionary capital expenditure projects
designed to increase the productivity and profitability of our
refineries. Other factors beyond our control also may prevent or
hinder our undertaking of some or all of these projects,
including compliance with or liability under environmental
regulations, a downturn in refining margins, technical or
mechanical problems, lack of availability of capital and other
factors. Failure to successfully implement these projects may
adversely affect our business prospects and competitive position
in the industry.

WE RELY HEAVILY UPON SUPPLY CONTRACTS WITH OUR ULTIMATE PARENT
WHICH COULD BE MODIFIED OR TERMINATED.

We have historically purchased a significant portion of our crude
oil requirements from PDVSA, our parent corporation, under supply
agreements (expiring in 2006 through 2013) which we believe
contain favorable terms that could not be replicated with other
suppliers. PDVSA supplied approximately 50% of the crude oil we
refined in 2002 under those supply agreements.

PDVSA could cause the termination of the supply agreements or a
modification of the terms of the supply agreements for any number
of reasons. Certain covenants in our other debt instruments
restrict, for so long as such debt is outstanding, our ability to
terminate or modify the supply agreements. However, those
covenants do not prevent PDVSA from taking actions to cause a
termination or modification of those agreements. By their terms,
the supply agreements give either party a right to terminate the
agreements upon six months notice if PDVSA no longer retains an
ownership interest in us as indicated in the agreements. Although
we expect that the supply agreements will be replaced as they
expire, we cannot assure you that we will be able to replace them
and, if replaced, we are not able to predict the terms of any
replacement supply agreements, including provisions for pricing
crude oil.

The supply agreements permit PDVSA to decrease or stop providing
us crude oil based on the existence of a force majeure. In the
past, when the Venezuelan government ordered PDVSA to curtail the
production of oil in response to a decision by the organization
of Oil Producing and Exporting Countries, otherwise known as
"OPEC," to reduce production, PDVSA invoked force majeure under
the supply agreements. PDVSA has invoked these force majeure
provisions on numerous occasions over the past few years.

If the supply agreements are modified or terminated or this
source of crude oil continues to be interrupted due to production
difficulties, political or economic events in Venezuela or other
factors, we might not be able to find other sources of heavy
crude oil for our refineries on terms comparable to those
contained in the current supply agreements, and as a result we
could continue to experience greater volatility in our operating
results than we historically have experienced.

PRICING PROVISIONS OF OUR SUPPLY AGREEMENTS WITH PDVSA MAY AFFECT
OUR EARNINGS.

Our crude oil supply agreements with PDVSA are designed to reduce
the volatility of earnings and cash flows from our refining and
marketing operations by providing a relatively stable level of
gross margin on crude oil supplied by PDVSA. The supply
agreements incorporate formula prices based on the market value
of a slate of refined products deemed to be produced from each
particular grade of crude oil or feedstock, less:

     - specified deemed refining costs,

     - specified actual costs, including transportation charges,
natural gas and electricity and import duties and taxes, and

     - a deemed margin, which varies according to the grade of
crude oil or feedstock delivered.

Deemed margins and deemed costs are adjusted periodically by a
formula primarily based on the rate of inflation. Because deemed
operating costs and the slate of refined products deemed to be
produced for a given barrel of crude oil or other feedstock do
not necessarily reflect the actual costs and yields in any
period, the actual refining margin we earn under the various
supply agreements will vary depending on, among other things, the
efficiency with which we conduct our operations during that
period. Although we believe that these supply agreements reduce
the volatility of our earnings and cash flows, these supply
agreements also limit our ability to enjoy higher margins during
periods when the market price of crude oil is low relative to the
then current market prices for refined products.

OUR PRIMARY SUPPLY OF CRUDE OIL IS CONTROLLED BY THE GOVERNMENT
OF VENEZUELA.

All oil and hydrocarbon reserves within Venezuela are owned by
the Bolivarian Republic of Venezuela and not by PDVSA or by us.
Under Venezuela's recently adopted Hydrocarbons Law, primary
activities such as exploration, exploitation, manufacturing,
refining and initial transportation from the field is reserved to
the Bolivarian Republic of Venezuela. PDVSA coordinates, monitors
and controls all operations related to hydrocarbons. There can be
no assurance that Venezuelan law and implementation policies will
not adversely affect the supply of crude oil by PDVSA to us.

Historically, members of OPEC have entered into agreements to
reduce their production of crude oil. The Bolivarian Republic of
Venezuela is a member of OPEC. PDVSA does not control the
Venezuelan government's international affairs and the government
could enter into an agreement with OPEC or other oil exporting
countries that when implemented could require PDVSA to reduce its
crude oil production and export activities. Such a curtailment
could be an event of force majeure under our crude oil supply
agreements, giving PDVSA's affiliates the right to reduce crude
oil deliveries under those supply agreements for so long as such
curtailment is in effect. We are currently operating under
reduced levels of delivery under the crude oil supply agreements
and have been required to obtain a correspondingly increased
portion of our crude oil in the open market. We are unable to
predict when the current curtailment will be lifted or if
additional curtailments will be imposed.

RECOURSE AGAINST OUR DIRECTORS FOR SECURITIES LAWS CLAIMS MAY BE
LIMITED.

Certain members of our board of directors are residents of
Venezuela, and all or a substantial portion of the assets of
those directors are located outside the U.S. As a result, it may
be difficult for investors to effect service of process within
the U.S. upon those directors or to enforce, in U.S. courts,
judgments obtained in such courts and predicated upon the civil
liability provisions of the U.S. federal securities laws. In
addition, PDVSA may replace members of our board of directors at
any time, as it recently did in January 2003. This could make it
even more difficult to effect service of process on our
directors. We have been advised that liabilities predicated
solely upon the civil liability provisions of the U.S. federal
securities laws in actions brought in Venezuela, in original
actions or in actions for enforcement of judgments of U.S.
courts, may not be enforceable in Venezuela.

RISKS RELATED TO OUR BUSINESS AND THE PETROLEUM INDUSTRY

VOLATILE MARGINS IN THE REFINING INDUSTRY MAY NEGATIVELY AFFECT
OUR FUTURE OPERATING RESULTS AND DECREASE OUR CASH FLOW.

Our financial results are primarily affected by the relationship,
or margin, between refined product prices and the prices for
crude oil and other feedstocks. The cost to acquire our
feedstocks and the price at which we can ultimately sell refined
products depend on a variety of factors beyond our control.
Historically, refining margins have been volatile and they are
likely to continue to be volatile in the future. Although an
increase or decrease in prices for crude oil, feedstocks and
blending components generally will result in a corresponding
increase or decrease in prices for refined products, there is
generally a lag in the realization of the corresponding increase
or decrease in prices for refined products.

Our supply agreements with PDVSA are designed to provide some
protection for our earnings and cash flow from volatility through
the pricing formula employed under those contracts. To the extent
that we are unable to continue to rely on these supply agreements
our exposure to volatility would increase. Future volatility may
negatively affect our results of operations, since the margin
between refined products prices and feedstock prices may decrease
below the amount needed for us to generate net cash flow
sufficient to meet our needs.

     Specific factors that may affect our refining margins
include:

     - disruptions in our crude oil supply under our supply
agreements with PDVSA such as we are currently experiencing;

     - accidents, interruptions in transportation, inclement
weather, the impact of energy conservation efforts, or other
events that cause unscheduled shutdowns or otherwise adversely
affect our plants, machinery, pipelines or equipment, or those of
our suppliers or customers;

     - changes in the cost or availability to us of
transportation for crude oil, feedstocks and refined products;

     - failure to successfully implement our planned capital
projects or to realize the benefits expected for those projects;

     - changes in fuel specifications required by environmental
and other laws, particularly with respect to oxygenates and
sulfur content;

     - rulings, judgments or settlements in litigation or other
legal matters, including unexpected environmental remediation or
compliance costs at our facilities in excess of any reserves, and
claims of product liability or personal injury; and

     - aggregate refinery capacity in our industry to convert
heavy sour crude oil into refined products.

     Other factors that may affect our margins, as well as the
margins in our industry in general, include, in no particular
order:

     - domestic and worldwide refinery overcapacity or
undercapacity;

     - aggregate demand for crude oil and refined products, which
is influenced by factors such as weather patterns, including
seasonal fluctuations, and demand for specific products such as
jet fuel, which may themselves be influenced by acts of God,
nature and acts of terrorism;

     - domestic and foreign supplies of crude oil and other
feedstocks and domestic supply of refined products, including
from imports;

     - the ability of the members of OPEC, to maintain oil price
and production controls;

     - political conditions in oil producing regions, including
the Middle East, Africa and Latin America;

     - refining industry utilization rates;

     - pricing and other actions taken by competitors that impact
the market;

     - price, availability and acceptance of alternative fuels;

     - adoption of or modifications to federal, state or foreign
environmental, taxation and other laws and regulations;

     - price fluctuations in natural gas; and

     - general economic conditions.

A SIGNIFICANT INTERRUPTION OR CASUALTY LOSS AT ONE OF OUR
REFINERIES COULD REDUCE OUR PRODUCTION, PARTICULARLY IF NOT FULLY
COVERED BY OUR INSURANCE.

Our business includes owning and operating refineries. As a
result, our operations could be subject to significant
interruption if one of our refineries were to experience a major
accident, be damaged by severe weather or other natural disaster,
or otherwise be forced to shut down. Any such shutdown would
reduce the production from the refinery. For example, on August
14, 2001, a fire occurred at the crude oil distillation unit of
the Lemont refinery. The crude unit was destroyed and the
refinery's other processing units were temporarily taken out of
production. A new crude unit did not become operational until May
2002. We have also experienced other accidents at our facilities
that have required us to shut down operations for significant
periods of time to rebuild. We also face risks of mechanical
failure and equipment shutdowns. In any such situations,
undamaged refinery processing units may be dependent on or
interact with damaged sections of our refineries and,
accordingly, are also subject to being shut down. In the event
any of our refining facilities is forced to shut down for a
significant period of time, it would have a material adverse
effect on our earnings, our other results of operations and our
financial conditions as a whole.

OUR INSURANCE COVERAGE MAY BE INADEQUATE TO COVER ALL LOSSES.

We maintain insurance in accordance with industry standards with
respect to our assets and operations. However, not all operating
risks are insurable, and there can be no assurance that the
insurance will be available in the future or that insurance will
cover all unanticipated losses in the event of a loss. As a
result of factors affecting the insurance market, insurance
premiums with respect to renewed insurance policies may increase
significantly compared to what we are currently paying. In
addition, the level of coverage provided by such renewed policies
may decrease, while deductibles and/or waiting periods may
increase, compared to our existing insurance policies.

ENVIRONMENTAL STATUTES AND REGULATIONS MAY IMPOSE SIGNIFICANT
COSTS AND LIABILITIES.

Our operations are subject to extensive federal and state
environmental, health and safety laws and regulations, including
those governing discharges to the air and water, the handling and
disposal of solid and hazardous wastes and the remediation of
contamination. The failure to comply with those laws and
regulations can lead, among other things, to civil and criminal
penalties and, in some circumstances, the temporary or permanent
curtailment or shutdown of all or part of our operations in one
or more of our refineries. The nature of our refining business
exposes us to risks of liability due to the production,
processing and refining, storage, transportation, and disposal of
materials that can cause contamination or personal injury if
released into the environment.

Consistent with the experience of all U.S. refineries,
environmental laws and regulations have raised operating costs
and necessitated significant capital investments at our
refineries. We believe that existing physical facilities at our
refineries are substantially adequate to maintain compliance with
existing applicable laws and regulatory requirements, other than:

     - upgrades to or closure of surface impoundments or other
solid waste management units, which are required by our Resource
Conservation and Recovery Act ("RCRA"), permit,

     - upgrades to sulfur removal capabilities, which are
required to comply with mandates adopted by the U.S.
Environmental Protection Agency ("U.S.  EPA"), to reduce the
sulfur content of diesel fuel and gasoline,

     - changes that are required to address a ban on MTBE and
other ether-based gasoline additives, and

     - changes that will be required to comply with the terms of
a potential settlement agreement with the U.S. EPA of alleged
violations of the New Source Review provisions of the federal
Clean Air Act of 1990 (the "Clean Air Act").

     Our refineries produce gasolines that meet the current
requirements for conventional and reformulated gasolines under
the Clean Air Act and its implementing regulations. Our
refineries also produce low-sulfur diesel fuel meeting federal
standards. In February 2000, the U.S. EPA published the Tier 2
Motor Vehicle Emission Standards and Gasoline Sulfur Control
Requirements for all passenger vehicles, establishing standards
for reduced sulfur content in gasoline. The ruling mandates that
the average sulfur content of gasoline at any refinery not exceed
30 parts per million, or ppm, during any calendar year starting
January 1, 2005. Starting in 2004, the U.S. EPA will begin a
program to phase in new low sulfur gasoline. In addition, in
January 2001, the U.S. EPA issued its rule to reduce the sulfur
content of diesel fuel sold to highway consumers by 97%, from 500
ppm to 15 ppm, beginning June 1, 2006. Lawsuits by refining
industry groups have been filed that may delay implementation of
the diesel rule beyond 2006. Compliance with the new Tier 2
specifications for the reduction of sulfur in both gasoline and
distillates is expected to cost the refining industry over $8
billion.

Several states in our marketing areas have banned or limited the
use of oxygenated ethers such as MTBE in gasoline. For example,
New York has banned gasoline containing MTBE effective January 1,
2004. Other states and the U.S. EPA are also considering use
restrictions on those ethers. Our refineries currently produce
and use two oxygenated ethers -- TAME and MTBE -- in reformulated
gasoline to comply with requirements in federal law for 2% oxygen
content. If use of these ethers is further banned or limited, we
will have to make significant changes to be able to sell
reformulated gasoline into markets affected by these
restrictions. The nature, extent and costs of these changes
depend on the nature and extent of the restrictions on oxygenated
ethers, whether the federal oxygenate mandate remains in place
and other laws and regulations relating to fuels. In addition,
the cost to produce diesel and gasoline fuels will increase as a
result of sulfur or aromatics reductions or a ban of oxygenated
ethers. We cannot assure that we will be able to recover the
increased cost of production through increases in the price of
our refined products.

Several states in our market areas have adopted regional or
statewide restrictions on the properties of gasoline distributed
in those areas, and other standards have been proposed. We may
not be able to make gasoline for such local markets depending on
the standards imposed without additional capital investment.
Investments to meet either local or federal fuel standards are
made subject to market conditions and economic justification.

Several bills are pending before the U.S. Congress which would
mandate that the gasoline pool be made up of a specified
percentage of "renewable fuels" which would likely be ethanol. We
cannot predict the extent and requirements of any renewable fuels
program nor the potential effects of such a program on our
operations. Any requirement that we use ethanol or achieve a
specific level of renewable fuels in our gasoline pool could
impose significant costs on us.

We expect that the nature of the refining business will continue
to make it subject to increasingly stringent environmental and
other laws and regulations that may increase the costs of
operating our refineries above currently projected levels and
require future capital expenditures, including increased costs
associated with more stringent standards for air emissions,
wastewater discharges and the remediation of contamination. It is
difficult to predict the effect of future laws and regulations on
our financial condition or results of operations. We cannot
assure that environmental or health and safety liabilities and
expenses will not have a material adverse effect on our financial
condition or results of operations.

PERMITTING AND REGULATORY MATTERS MAY IMPACT THE OPERATION OF OUR
REFINERIES.

We are required to obtain certain permits and to comply with
constantly changing provisions of numerous statutes and
regulations relating to, among other things:

     - business operations,

     - the safety and health of employees and the public,

     - the environment,

     - employment,

     - hiring and anti-discrimination, and

     - limitations on noise.

New statutes and regulations or new permit provisions may become
applicable to our refineries, resulting in the imposition of
significant additional costs. Failure to comply with any such
permits, statutes and regulatory requirements may result in
significant civil or criminal liability and, in certain
circumstances, the temporary or permanent curtailment or shutdown
of all or part of our operations or the inability to produce
marketable products. We cannot assure that we will at all times
be in compliance with all applicable statutes and regulations or
have all necessary permits. Furthermore, our failure to be in
compliance at all times with applicable regulations also could
adversely affect our financial condition or results of
operations.

COMPETITORS WHO PRODUCE THEIR OWN SUPPLY OF FEEDSTOCKS, MAKE
ALTERNATIVE FUELS OR HAVE GREATER FINANCIAL RESOURCES MAY HAVE A
COMPETITIVE ADVANTAGE OVER US.

The refining industry is highly competitive with respect to both
feedstock supply and refined product markets. We compete with
numerous other companies for available supplies of crude oil and
other feedstocks and for outlets for our refined products. We are
not engaged in the petroleum exploration and production business
and therefore do not produce any of our crude oil feedstocks.
Competitors that have their own production are at times able to
offset losses from refining operations with profits from
production operations, and may be better positioned to withstand
periods of depressed refining margins or feedstock shortages. A
number of our competitors have greater financial and other
resources than we do. Such competitors have a greater ability to
bear the economic risks inherent in all phases of the refining
industry. Some of our competitors have more efficient refineries
and they may have lower per barrel crude oil refinery processing
costs. In addition, we compete with other industries that provide
alternative means to satisfy the energy and fuel requirements of
our industrial, commercial and individual consumers. If we are
unable to compete effectively with these competitors, our
financial condition, results of operations, and business
prospects could be materially adversely affected.

OUR OPERATIONS ARE INHERENTLY SUBJECT TO DISCHARGES OR OTHER
RELEASES OF PETROLEUM OR HAZARDOUS SUBSTANCES FOR WHICH WE MAY
FACE SIGNIFICANT LIABILITIES.

Our operations, as with others in the businesses in which we
operate, are inherently subject to spills, discharges or other
releases of petroleum or hazardous substances that may give rise
to liability to governmental entities or private parties under
federal, state or local environmental laws, as well as under
common law. We could incur substantial costs in connection with
these liabilities, including clean-up costs, fines and civil or
criminal sanctions, and personal injury or property damage
claims. Spills, discharges or other releases of contaminants have
occurred from time to time during the normal course of our
operations, including releases associated with our refineries,
pipeline and trucking operations, as well as releases at gasoline
service stations and other petroleum product distribution
facilities we have operated and are operating. We cannot assure
you that additional spills, discharges and other releases will
not occur in the future, that governmental agencies will not
assess penalties against us in connection with any past or future
discharges or incidents, or that third parties will not assert
claims against us for damages allegedly arising out of any such
past or future discharges or incidents.

TERRORIST ATTACKS AND THREATS OR ACTUAL WAR MAY NEGATIVELY IMPACT
OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Our business is affected by general economic conditions and
fluctuations in consumer confidence and spending, which can
decline as a result of numerous factors outside of our control.
Recent terrorist attacks in the United States, as well as events
occurring in response to or in connection with them, including
future terrorist attacks against United States targets, rumors or
threats of war, actual conflicts involving the United States or
its allies, or military or trade disruptions impacting our
suppliers or our customers, may adversely impact our operations.
As a result, there could be delays or losses in the delivery of
supplies and raw materials to us, decreased sales of our products
and extension of time for payment of accounts receivable from our
customers. Strategic targets such as energy-related assets (which
could include refineries such as ours) may be at greater risk of
future terrorist attacks than other targets in the United States.
These occurrences could have an adverse impact on energy prices,
including prices for our products, and an adverse impact on the
margins from our refining and marketing operations. In addition,
disruption or significant increases in energy prices could result
in government-imposed price controls. Any or a combination of
these occurrences could have a material adverse effect on our
business, financial condition and results of operations.




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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.


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