TCRLA_Public/030314.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, March 14, 2003, Vol. 4, Issue 52



ARGENTINE BANKS: Court Ruling On Deposits May Prompt Bailout
DISCO: SOBI Holding Press Conference on Ahold Case Progress
HIDROELECTRICA EL CHOCON: Corporate Bonds Get `CCC' From Moody's
JUAN MINETTI: Struggling To Stay Afloat Amid Deep Recession

ROYAL AHOLD: Execs Downplay Accounting Woes, Bankruptcy Threat
SCOTIABANK QUILMES: Scotiabank Offers Buyout to Creditors
* Courts Brace for Lawsuits After Landmark Deposit Ruling


GLOBAL CROSSING: Board Committee Says Investigation Mishandled
TYCO INTERNATIONAL: Forecasts Up To $325M In Charges
TYCO INTERNATIONAL: Keeps 4 Aircraft Despite Promise To Sell All


BRAZILIAN STEELMAKERS: Deem Meeting With Officials `Productive'
SUDAMERIS BRASIL: IntesaBci Exec Confirms Sale Plans


COLOR SIETE: Financial Health Improves
TERMOEMCALI: Fitch Cuts Rating, Maintains Rating Watch Neg.
* S&P Assigns Colombia's $500M Global Bond 'BB'


PACIFICTEL: To Begin ILD Contract Renegotiations March 24


AEROMEXICO: Fuel Price Spike Prompts Ticket Price Hike
ALESTRA: Creditors Expected To Snub Debt Buyout Proposal
COPAMEX: Poor Financials Prompts S&P Credit Rating Cut


WEISE SUDAMERIS: Intesa Mulls Potential Sale


* Uruguayan Delegation Off to New York, Italy to Sell Debt Plan
* Fitch Downgrades Uruguay to 'CCC-' Negative Outlook


PDVSA: Cuts Prices To Bolster Market Share After Strike
PDVSA: Paraguana Refinery Resumes Exports
PDVSA: Puerto La Cruz Terminal Returns to Normal Operations

     - - - - - - - - - -


ARGENTINE BANKS: Court Ruling On Deposits May Prompt Bailout
Banks in Argentina are looking for assistance from the government
in case the courts order all deposits be "redollarized,"
according to Business News Americas. In addition, they will seek
compensation for the way last year's pesification was carried

Economy Ministry officials met with banking representatives on
Tuesday evening. Reports had it that the talks focused on
compensating the sector for the asymmetric form of the
pesification, which saw dollar deposits converted at ARS1.4 to
the dollar and indexed to inflation, whereas dollar debts were
converted at 1:1 and indexed to salaries. While inflation shot up
41% last year, salaries hardly budged.

A report by business daily Cronista suggested that the government
will use a 10-year BODEN bond to compensate the banks for the
different indexing of the assets. However, the compensation will
exclude the 20% of credits that debtors have defaulted on, the
paper claimed. The government is in the process of compensating
banks for converting the loans and deposits at different rates.

Regarding possible redollarization of deposits, the government
has said it won't discuss the type of assistance it might offer,
saying last week's Supreme Court ruling was on one specific case
and that the situation of other pesified deposits remains

However, a report in local daily Infobae said the banks are
proposing that they return part of the dollars to savers through
a mix of cash and bonds and that the rest come from the
government. Banks have said they are willing to pay the ARS1.4
plus inflation for each dollar swapped. The difference between
that and the exchange rate would be made the government's

DISCO: SOBI Holding Press Conference on Ahold Case Progress
The Dutch Foundation for the Investigation of Corporate
Information (SOBI), which filed a complaint last month at the
Amsterdam public prosecution office, alleging there may have been
insider trading in Royal Ahold shares last year, will present
"new developments" on the case Thursday at a press conference.

Dow Jones recalls that the independent watchdog group's case
relates to Ahold's dealings in former joint venture partner Velox
Retail Holdings. Ahold teamed up with Velox Retail Holdings in
1998 to start retail supermarket operations in Latin America.
Ahold took full control of the joint venture, called Disco Ahold,
in August 2002, following Velox's default on various debts.

At the center of the allegations is the link between Ahold
chairman Cees van der Hoeven and Uruguay's Peirano family, which
runs the Velox Group, Bank Velox in Argentina, Bank Aleman in
Paraguay and Trade & Commerce Bank in the Cayman Islands.

          Corporate Communications

HIDROELECTRICA EL CHOCON: Corporate Bonds Get `CCC' From Moody's
Moody's Latin America Calificadora de Riesgo S.A. issued junk
ratings to US$140 million of Hidroelectrica El Chocon S.A.'s
corporate bonds. According to the National Securites Commission
of Argentina, the affected bonds were classified under `Simple
Issue', and mature on February 14, 2004.

The bonds were assigned a `CCC' rating last Thursday. The
designation was based on the Company's financial health as of
December 31, 2002. The bonds were described as "Obligaciones

The announcement did not indicate the reasons behind the rating
issue, nor the CUSIP.

A total of US$230 million of Inversora Electrica de Buenos Aires
S.A., were rated `raD' by the Argentine arm of Standard & Poor's
International Ratings, Ltd. last Monday.

An announcement in the National Securities Commission of
Argentina indicated that the ratings were based on the Company's
performance as of the end of September 30, 2002.

The affected bonds include US$100 million of "Obligaciones
Negociables Simples no convertibles en acciones", due on
September 16, 2002. Another US$130 million of corporate bonds
with the same description, but matures exactly two years after
the first one were also affected.

Standard & Poor's said that an obligation is rated 'raD' when it
is in payment default, or the obligor has filed for bankruptcy.
The 'raD' rating is used when interest or principal payments are
not made on the date due, even if the applicable grace period has
not expired, unless Standard & Poor's believes that such payments
will be made during such grace period.

JUAN MINETTI: Struggling To Stay Afloat Amid Deep Recession
Juan Minetti, Argentina's second-largest cement producer,
continues to reel from the effects of the country's economic
recession. In a statement to Argentina's securities regulator,
the CNV, the Company revealed that its losses widened to ARS443
million last year, from losses of ARS126 million in 2001.

Minetti's domestic cement shipments fell 29% to 3.84Mt last year
due to the recession, while Portland cement sales fell 29% to

In January, credit rating agency Fitch maintained its Category 4
rating on the Company's shares. Category 4 is for low quality,
medium liquidity shares with a low capacity to generate funds.

The rating reflects the Company's weak fund generation
denominated in pesos compared to the Company's high (over 90%)
dollar-denominated debt, coupled with the effect of the peso's
devaluation (73%) on Minetti's dollar-denominated costs, Fitch

Minetti is controlled by Swiss cement giant Holcim.

ROYAL AHOLD: Execs Downplay Accounting Woes, Bankruptcy Threat
Royal Ahold's recent disclosure about accounting irregularities
in the U.S. and possible fraudulent transactions in Argentina
could lead to a takeover of the Company or bankruptcy, according
to speculations, which an executive from the Dutch retailer

"I don't believe a takeover is the only means of rescuing Ahold,"
said Henny de Ruiter, chairman of Royal Ahold's supervisory

Ruiter also rejected suggestions Ahold could sell its flagship
Dutch supermarket chain, Albert Heijn.

SCOTIABANK QUILMES: Scotiabank Offers Buyout to Creditors
Scotiabank announced Wednesday it is funding an offer to purchase
outstanding medium term notes and certain other debt of its
Argentine subsidiary, Scotiabank Quilmes S.A. (Quilmes), which is
now in judicial liquidation. The offer recognizes the difficult
situation facing creditors and is intended to provide certainty
of a partial recovery on the amounts owing by Quilmes to them.
The offer is being made by a trust established by J.P. Morgan
Trust Company (Cayman) Limited as trustee.

Scotiabank's funding of the offer will total a maximum of US$37.4
million and is expected to have minimal net financial impact on
the Bank. This amount has been considered in the Bank's previous
net provisioning related to Argentina.

The offer is consistent with Scotiabank's commitment throughout
this process to maximize returns for Quilmes' creditors.

Creditors who tender to the offer will receive cash of US$0.20
for each US$1.00 of the outstanding debt that is eligible for
purchase and will assign to the trust all claims and rights
relating to the indebtedness owing to them by Quilmes, including
claims against third parties. Creditors who file claims with the
Quilmes liquidator before tendering to the offer will retain the
possibility of receiving any liquidation distributions for their
tendered debt.

In addition, Scotiabank does not intend to benefit from any
recoveries that may be made on the Quilmes debt it holds with the
intent of enhancing the position of other creditors of Quilmes.

Documentation regarding the offer will be provided to noteholders
and other creditors in permitted jurisdictions shortly. The offer
is scheduled to expire at 12:00 noon, EST, on April 22, 2003.

* Courts Brace for Lawsuits After Landmark Deposit Ruling
Lawyers polled by Reuters recently confirmed receiving hundreds
of inquiries, a week after a landmark ruling declared
unconstitutional the 'pesofication' of dollar deposits last year.

"We have had non-stop inquiries since the ruling.  So far we have
several hundred new cases to present next week," lawyer Felix
Pazo, who works for one of Argentina's biggest law firm, told
Reuters late last week.

"If inquiries and decisions to lodge cases continue at this rate
in coming weeks, we are expecting thousands," he said.

Reuters says there are about 250,000 depositors who have not yet
taken legal action, a year after the government forcibly
converted all dollar deposits into peso and subsequently froze it
out of reach. Over 100,000 cases are currently pending and this
number could grow dramatically in the coming weeks, according to

By its estimate, Reuters says the banks and the cash-starved
Argentine government could face a US$20 billion claim if the high
court decision -- ordering the redollarization of the devalued
US$247 million fixed-term deposit held by San Luis province --
will not be overturned.  The government has 60 days to work out
how the payment will be made.

Meanwhile, analysts warn the barrage of cases expected to follow
the landmark decision could undermine an aid pact sealed with the
IMF in January. Accordingly, it will put pressure on the fragile
banking system, which has shouldered billions of dollars in
losses due to the devaluation.

The IMF has yet to comment on the ruling, while the government
has not yet say whether or not it will print bonds to pay its
share of dues to depositors, Reuters says.


GLOBAL CROSSING: Board Committee Says Investigation Mishandled
A board committee for Global Crossing believes the investigators
on some transactions of the bankrupt telco mishandled the
accusations made by former Global Crossing vice president Roy
Olofson. Mr. Olofson said in August that capacity swaps between
Global Crossing and Qwest were intended to inflate earnings. He
was then fired in November.

Lawyers at Coudert Brothers LLC, which was retained last April to
assist a Global Crossing board committee that was put together to
probe Olofson's allegations, said that the investigation, done by
lawyers at Simpson Thacher & Bartlett "proved to be flawed and
incomplete", reports the Bermuda Sun on Wednesday, citing a
report filed with the U.S. Bankruptcy Court in Manhattan.

"The Company's failure to respond in a timely and effective
manner to Olofson's allegations was caused by the failure of the
company's acting general counsel and primary outside counsel to
properly investigate the allegations and implement the
appropriate response," said Coudert Brothers.

Lynn M. LoPucki, a professor at the University of California, Los
Angeles School of Law, said, "It's inconceivable that Global
Crossing's board wouldn't bring suit or try to negotiate a
financial settlement with Simpson Thacher."

She said that Global Crossing is likely to argue that this error
put the Company in a bankruptcy it did not need to be in. Global
Crossing filed for bankruptcy in January 2002, with US$12.4
billion in debt.

Coudet Brothers alleged that SimpsonThatcher conducted one
interview, of Joe Perrone, the chief accounting officer and
Olofson's supervisor. They added that Simpson Thacher failed to
obtain supporting documents identified by Perrone, did not
consult with or share the letter with Global Crossing's auditors
at Arthur Andersen LLP.

Simpson Thatcher allegedly sought to minimize its responsibility
by denying that it had been engaged to conduct an investigation,
after that, said Coudert Brothers.

          Press Contacts
          Kendra Langlie
          Phone: + 1 305-808-5912

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

TYCO INTERNATIONAL: Forecasts Up To $325M In Charges
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) announced
Wednesday that in the quarter ending March 31, 2003, it expects
to take non-cash, pre-tax charges that are estimated to be
between $265 million and $325 million for issues identified
primarily in its Fire & Security Services business.  These
charges are expected to lower earnings by $0.09 to $0.11 per

In the Company's Forms 10-K and 8-K filed December 30, 2002,
based on Tyco's review and analysis of its accounting and
internal procedures during the second half of 2002, the Company
committed to implementing a process of intensified internal
audits, detailed controls and in-depth operating reviews of each
business segment. As a result of these audits and reviews, Tyco
has identified a number of issues, primarily in its Fire &
Security Services business.  These charges result from conforming
certain accounting policies across a number of Fire & Security
European businesses that were recently reorganized under a single
management team, improving compliance with other existing
policies, conducting additional account reconciliation
procedures, as well as other matters.

The Company's process of intensified internal audits and detailed
controls and operating reviews of business segments is still in
its implementation phase and is designed both to identify any
legacy accounting issues, but also, and more importantly, to
create and maintain on an ongoing basis the policies and culture
that will meet Tyco's goals of integrity and transparency in all
of its business practices.  The Company anticipates that
intensified audits and reviews will remain a continuing part of
Tyco's regular operational procedures.

Updated Guidance

The Company has tightened its cash flow guidance for fiscal 2003
to a range of $2.6 billion to $3.0 billion.  Under a new
definition of free cash flow that the Company will adopt
beginning in the current fiscal quarter, free cash flow for the
fiscal year is expected to range from $1.45 billion to $1.85
billion.  In determining free cash flow under this new
definition, the Company will include the effect of spending on
ADT dealer account acquisitions as well as purchase accounting
and holdback liabilities related to prior acquisitions.

The Company also said that because of a weakening in the
economies in which it operates, particularly over the past 30
days, as well as declining margins at Tyco Fire & Security, the
Company has reduced its operational fiscal 2003 EPS guidance,
excluding the non-cash charges announced Wednesday, to a range of
$1.40 to $1.50.  Including these non-cash charges, EPS for the
year is expected to range from $1.30 to $1.40.

The Company will discuss these issues and the updated guidance at
its investor conference on Thursday, March 13.  This conference
will be web cast at http://www.tyco.combeginning at 8:15 a.m.  

New Leadership at Tyco Fire & Security Services

Tyco also announced Wednesday that it has appointed David
Robinson, currently the President of Tyco Plastics & Adhesives,
as President of the Company's Fire & Security Services segment.
The Company terminated Jerry Boggess, who had served as President
of Tyco Fire & Security Services.  Earlier, in January of this
year, Tyco appointed Mark Schmitz, a 20-year veteran of General
Motors, as Chief Financial Officer of Tyco Fire & Security.

As a result of Mr. Robinson's appointment to head the Fire &
Security Services segment, Tyco has named Terry Sutter, the
former President of Specialty Chemicals at Cytec Industries, to
succeed Mr. Robinson as President of Tyco Plastics & Adhesives.

Ed Breen, Chairman and Chief Executive Officer of Tyco,
commented: "Our Fire & Security unit has solid business
fundamentals. The demand for Fire & Security's 'life safety'
services and products remains strong in these uncertain times,
and its powerful brand names, with leading positions in global
markets, provide steady recurring revenue.  However, we have
concluded that management changes are necessary in order for us
to fully address the opportunities in this business, strengthen
its operating margins, improve performance and make it a more
efficient and well-run enterprise."

Mr. Breen continued.  "We believe Dave Robinson is the right
person to take the helm of the large businesses that make up Fire
& Security.  He represents an unusual combination of leadership,
hands-on management skills, industrial and consumer experience,
financial expertise and personal integrity.  We recruited him to
Tyco late last year because he reflects the uncompromising, high
standards we are setting for leaders throughout the new Tyco.  I
have confidence in the future of the Fire & Security business
under Dave Robinson and expect that it will improve its
performance and make an important contribution to Tyco's long-
term success."

Mr. Robinson said:  "Tyco Fire & Security is a great business
with terrific products, enviable market share and outstanding
employees.  I intend to move quickly to improve upon every aspect
of its operations.  I will work with Ed Breen and his team to
improve the performance and productivity of this business and set
the highest standards of quality in delivering products and
services to our customers."

Background on David Robinson

Mr. Robinson was brought to Tyco by Mr. Breen in November 2002.  
Prior to joining Tyco, Mr. Robinson had over 17 years of
experience with Motorola (formerly General Instrument).  In
addition to his position as Executive Vice President and
President of its Broadband Communications Sector, Mr. Robinson
also served as Senior Vice President and General Manager, Digital
Network Systems; Director, Cableoptics, Wireless and Headend;
Product Manager; and Financial Analyst during his career at
General Instrument. Mr. Robinson graduated with a B.A. from Bates
College and received his M.B.A. in general management from The
Amos Tuck School, Dartmouth College.

Background on Terry Sutter

Mr. Sutter joins Tyco from Cytec Industries, one of the world's
leading specialty chemicals companies, where he has served as
President of the Specialty Chemicals division since 2002.  Prior
to joining Cytec, Mr. Sutter served as President, Industry
Solutions at Honeywell/Allied Signal, Inc., where he had
responsibility for a $1.5 billion business unit with over 6,000
employees worldwide.  While at Honeywell/Allied Signal, Mr.
Sutter also served as Vice President-General Manager, Fluorine
Products and Vice President, Marketing & Business Development.
Mr. Sutter also spent eight years at Morton International in its
Adhesives and Specialty Polymers Group, most recently serving as
the business manager of the Thermoplastic Polyurethanes division.

About Tyco Fire & Security Services

Tyco Fire & Security Services designs, manufactures, installs and
services electronic security systems, fire protection, detection
and suppression systems, sprinklers, and fire extinguishers.  
Tyco Fire & Security Services consists of more than 60 brands
that are represented in over 100 countries. Its products are used
to safeguard firefighters, prevent and fight fires, deter
thieves, and protect people and property.

About Tyco International Ltd.

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

CONTACT:  Gary Holmes (Media)

          Kathy Manning (Investors)

TYCO INTERNATIONAL: Keeps 4 Aircraft Despite Promise To Sell All
Tyco International, Ltd. is still in possession of a small group
of planes despite promises to sell off "all company aircraft".
The Boston Globe reports that the Company is using the airplanes
to ferry executives and directors to their annual meeting at
their home base in Bermuda.

John F. Fort, who replaced former chief executive Dennis
Kozlowski, promised in June 13 last year that the Company would
save US$125 million by consolidating offices, reducing corporate
staffing and selling assets, "including all company aircraft."

Elizabeth Mather, a spokesperson for Tyco, offered the Company's
side of the story. According to Ms. Mather, the planes were used
to save the executives' time, as "it is the most efficient way
for them to travel."

"It is in the interests of shareholders and employees that
management has ready access to its many business locations," she

The source also said that the Company has sold all other aircraft
in the Company fleet except for a helicopter and three jets. The
Company had 13 aircraft before the present chief executive Edward
Breen took office in July.

She also said that executives who make their own way to Bermuda
are reimbursed at the same rate of a first-class ticket.

In a statement, the spokeswoman said, "The Company now has four
aircraft. In addition, the Company exited two of the airplane
hangar facilities [one owned, one leased] and now leases
significantly less hangar space. Since last June, the Company has
cut the corporate aviation budget dramatically."  

But the Company did not reveal the amount saved.

The Boston Globe said that the private transportations might save
the executives' time, but it does not appear to be cheaper.

According to Richard Aboulafia, vice president of the Teal Group,
an aerospace consulting firm in Fairfax, Va., flying on a
corporate jet is more expensive than last-minute coach tickets or
early-booked first-class seats.

"The differential is huge," he said, adding, "My best estimate is
first-class would cost maybe US$5,000 [a seat] and the private
jet would cost US$15,000. The price of coach seats varies widely,
but a last-minute ticket for the annual meeting from Boston could
be purchased for less than US$1,000.

Mr. Aboulafia added the other companies around the country are
finding ways to reduce the cost of travel for executives. Some
have even eliminated their private jets across the board.

Tyco's 10-K annual report indicated that for the fiscal year
ending September 30, 2002, it has allowed its directors to use
Company aircraft for personal travel.


BRAZILIAN STEELMAKERS: Deem Meeting With Officials `Productive'
Brazilian steelmakers met with sector representatives on Tuesday
to discuss the increase in steel prices over the past year.  Both
parties said the meeting was "productive", and Development
minister Luiz Fernando Furlan outlined plans to create a forum to
discuss oil prices and contracts.

Previous local reports suggested that the steelmakers in the
country would withhold investments if the government intervenes
with the industry.

At the meeting, IBS, an association of steelmakers in Brazil
explained that companies have been attending to the demands of
the domestic market. Companies said that the effect of exchange
rates on the price of imported inputs as well as reference prices
on the international market forced them to increase their
products' prices.

The IBS added that the world steel industry has suffered losses
in recent years, proving the cyclic nature of the world steel

The organization criticized the notion suggesting the government
should apply taxes or restrict exports. "The average increase of
29.5% of exports in steel intensive sectors in the second half of
2002 compared to the previous semester demonstrates that steel
does not represent a barrier to the competitiveness of those
sectors," said the IBS.

"We will discuss long-term forecasts and contracts in exchange
for prices. Sectors that export could concede part of the prices
they obtain in dollars, and sectors that do not export could sit
at the negotiating table and discuss sales volumes, " said Jose
Armando Campos, the president of IBS.

However, Rony Stefano, a steel analyst for investment bank BBV,
believes that the government will not take any drastic measures
against the steelmakers.

SUDAMERIS BRASIL: IntesaBci Exec Confirms Sale Plans
Sudameris Brasil will go on the block this year, confirmed
Corrado Passera, the CEO of Sudameris' Italian parent IntesaBci,
according to local daily Valor Economico. Financially, Sudameris
Brasil is doing well with net income jumping 23.9% to BRL220
million (US$62.7mn) in 2002 from that of the previous year's

Nevertheless, the unit has to go under the gavel this year as
part of its parent's plan to exit the troubled South American
market and boost profitability.

Last year, IntesaBci negotiated the sale of Sudameris with the
country's second largest private bank Itau. However, talks broke
down in November when the two parties could not agree on the

Itau had initially accepted to buy Sudameris for US$1.45 billion,
but the depreciation of Brazil's currency during the 11 months of
negotiations made the price too high in local currency.

CONTACT: IntesaBci SpA
         Piazza Paolo Ferrari 10
         20121 Milano
         Tel  +39 02 88 441
         Fax  +39 02 8844 3638
         Contact: Corrado Passera - Chief Executive Officer
                  Giampio Bracchi - Vice Chairman
                  Gianfranco Gutty - Vice Chairman

USIMINAS: In Talks With CVRD For Rail Production
Brazilian flat steelmaker Usinas Siderurgicas de Minas Gerais
Usiminas PN A (Usiminas) confirmed that it is developing a
project to build railroad cars, according to Business News
Americas. Usiminas spokesperson Paulo Paiva said that the project
will be done in partnership with local mining form CVRD.

Local news source, Valor Economico, said that CVRD commissioned
Usiminas to renew its fleet of rail cars as the cost of importing
the products are more expensive, while the lone local producer,
AmstedMaxion is working at full capacity. CVRD plans to obtain
1,800 wagons, and is considering getting another 1,200.

Rinaldo Campos Soares, president of Usiminas, said that studies
are being under way, and the project should be completed soon.
The report indicated the Usiminas' construction arm, Usiminas
Mecanica would take care of the production.

Business News Americas added that Mecanica may use its factory in
Santana do Paraiso in Minas Gerais. The said factory is currently
on standby. The subsidiary's chief Guilherme Muylaert Antunes
said that they would need to invest in technology for making
wheels and axles. He added that the Company may contact other
companies in making these items.

CVRD spokesperson Roberto Largman said, "The Company is carrying
out an evaluation of the technical capacity of possible

If the project is approved, Mecanica is expected to start
producing between 60 to 70 wagons every month. Usiminas may even
consider creating a new division.

CONTACT:  Usinas Siderurgicas de Minas Gerais Usiminas PN A
          Rua Prof. Jose Vieira de
          Mendonca, 3011
          Engenheiro Nogueira
          31310-260 Belo Horizonte - MG
          Phone:  +55 31 3499-8000
          Fax:  +55 31 3499-8475
          Home Page:
          Jose Augusto Muller de Oliveira Gomes, Chairman


COLOR SIETE: Financial Health Improves
Comercializadora Internacional Color Siete, a Colombian
manufacturer of men's and women's clothing, has increased the
number of its workers. Last year in July, the Company only had 85
employees, but now, the Company has doubled that size, and will
probably increase it to between 300 and 350 in the near future.

This indicates that the Company, which entered pre-bankruptcy
proceedings under Colombia's Ley 550 legislation eight months
ago, is slowly getting back on its feet.

Color Siete is close to regaining its financial health following
consolidation of its own brand, the production of a private label
for Sears in Mexico, and manufacturing for other companies.

Color Siete has been in business for 15 years.

TERMOEMCALI: Fitch Cuts Rating, Maintains Rating Watch Neg.
Fitch Ratings has lowered the rating on the TermoEmcali Funding
Corp.'s US$165 million 10.125% senior secured bonds due 2014 to
'CC' from 'CCC'. The rating remains on Rating Watch Negative.
Fitch believes that default is highly probable at the 'CC' rating
level. The rating action follows the Empresas Municipales de Cali
(Emcali) payment default under the 20-year power purchase
agreement (PPA) with TermoEmcali, and reflects the higher level
of uncertainty in receiving future Emcali payments. As a result
of the PPA payment default, Fitch has lowered Emcali's implied
foreign currency rating to 'D' from 'CCC.' Emcali is the
contractual offtaker of the TermoEmcali project under the 20-year
PPA and is the project's sole source of revenue.

As previously stated in the Fitch press release dated February 4,
2003, a federal government resolution implemented in late January
2003 by the Superintendence of Public Services (Superintendent)
addressed a possible liquidation of Emcali in the near term. A
subsequent resolution announced on March 5, 2003 further clarify
the extent of the Superintendent's takeover of Emcali for
liquidation purposes and included the suspension of all Emcali
payment obligations accrued up to the date of the March 5th
resolution. As a result of the March 5th resolution, Emcali
failed to make a PPA payment of approximately US$4.2 million due
on March 6, 2003. Total outstanding PPA payments that Emcali owes
to TermoEmcali amount to approximately US$19 million. Going
forward, it is uncertain whether Emcali will be able to resume
its contractual payment obligations to TermoEmcali.

Although TermoEmcali has sufficient funds to fully cover the
upcoming US$5.3 million debt service payment on March 15, 2003
without relying on its debt service reserve, TermoEmcali's
liquidity position will diminish over the coming months and will
likely require external liquidity support for subsequent debt
payments on the project bonds. TermoEmcali's external liquidity
sources include two letter of credit-backed reserve funds: a
letter of credit that backstops Emcali's PPA obligations of
approximately US$11.3 million, and a US$12.4 million debt service
reserve letter of credit, which was recently renewed and
currently expires in April 2004. It is uncertain at this time
whether the Emcali PPA-letter of credit will be available to

The Rating Watch Negative addresses the heightened degree of
uncertainty related to TermoEmcali's ability to continue to meet
its subsequent quarterly debt service payments on a timely basis
without external liquidity support, the possible renegotiation of
the TermoEmcali PPA, and the possibility of Emcali's liquidation
over the near term. Emcali is the exclusive provider of
electrical power services, water and sewer services and local
exchange telephone services in the city of Cali, Colombia. The
company is wholly owned by the city of Cali. TermoEmcali is owned
54% by InterGen, a subsidiary of Bechtel and Shell, 43% by
Emcali, and 3% by Corporation Financiera del Pacifico (CFP) and
other private investors.

CONTACT:  Caren Y. Chang 1-312-368-3151, Chicago
          John W. Kunkle, CFA 1-312-606-2329, Chicago
          Giovanny Grosso 1-312-368-2074, Chicago
          Glaucia Calp, 571-347-4573, Bogota, Colombia

Media Relations: James Jockle 1-212-908-0547, New York

* S&P Assigns Colombia's $500M Global Bond 'BB'
Standard & Poor's Ratings Services said Wednesday that it
assigned its 'BB' long-term foreign currency senior unsecured
debt rating to the Republic of Colombia's US$500 million 10.375%
30-year global bond, due January 2033. At the same time, Standard
& Poor's affirmed its 'BBB/A-3' local and 'BB/B' foreign currency
sovereign credit ratings on the republic. The outlook on the
ratings remains negative.

"The continued negative outlook reflects the uncertainty for
passage of the June 2003 national referendum, which would
implement a number of political and economic measures through
changes in the constitution," said sovereign analyst Richard
Francis. "The economic measures contained in the referendum are
critical to a achieving a public sector primary surplus of close
to 3% of GDP. Standard & Poor's estimates that a primary surplus
of this magnitude is needed to stabilize to government's adverse
debt dynamics at nearly 50% of GDP," he added. Colombians are
expected to vote on a raft of political and economic measures
that will also gauge the popular backing of the administration of
President Alvaro Uribe.

According to Mr. Francis, there has been a marked boost in
domestic confidence despite the negative outlook, due to the
strengthening of the military and the passage of fiscal measures
in late December that should narrow the government's overall
deficit by nearly 1% of GDP in 2003. The rise in confidence
should stimulate private sector demand, leading higher economic

"The referendum remains key, however, because the freeze in
public spending envisioned in the law is needed to stabilize the
government's debt dynamics. If the economic measures in the
referendum fail, the government's debt will continue to rise
unless alternatives, such as new taxes, are adopted in their
place," Mr. Francis noted. "Furthermore, the country's
governability could be weakened if the referendum is not passed,"
he concluded.

ANALYSTS:  Richard Francis, New York (1)-212-438-7348
           John Chambers, CFA, New York (1) 212-438-7344


PACIFICTEL: To Begin ILD Contract Renegotiations March 24
Ecuadorian fixed line operator Pacifictel will kick off contract
renegotiations with 19 long distance carriers on March 24 and
expects to start signing revised contracts by May 10, revealed
chairman David Jaramillo. According to Business News Americas,
Pacifictel is trying to renegotiate ILD contracts in order to
save money and standardize agreements.

Mr. Jaramillo said call termination fees paid by the carriers
represent 20% of Pacifictel's income. He also noted that some
carriers had managed to negotiate more advantageous contracts
than others.

Meanwhile, Pacifictel CEO Mauricio Galindo clarified that
Pacifictel and fellow fixed line operator Andinatel will have
equal shares in the mobile telephony venture they plan to set up
with Cuenca-based operator Etapa due to the fact that they are
sister companies, by virtue of their mutual shareholder - the
government's solidarity fund FS.

Mr. Galindo made the clarification following reports by the local
press that Andinatel would have a 51% stake in the venture.


AEROMEXICO: Fuel Price Spike Prompts Ticket Price Hike
Mexican flagship carrier Aeromexico, which is struggling to deal
with an increase in fuel prices due to the impending war in Iraq,
added a temporary surcharge to domestic and international ticket
prices. According to an EFE report, domestic ticket prices will
cost an additional MXN50 ($4.50), U.S.-bound flights will go up
by US$5 and flights to Europe and South America will increase by

"This phenomenon is taking place in several airlines throughout
the world ... it must be pointed out that fuel costs are one of
an airline's biggest expenses and, at the same time, one of the
least predictable," Aeromexico explained. "Suffice it to say that
in the last year, the price of jet fuel in pesos skyrocketed 68
percent," the carrier said.

Historically, Aeromexico's fuel expenses were close to 13% of
operating costs, but the recent crisis and the hike in oil prices
have increased it to 19%, equivalent to 60-80 million pesos ($5.4
million to $7.2 million) per month.

ALESTRA: Creditors Expected To Snub Debt Buyout Proposal
The lack of cash in Mexican telecommunications company Alestra
SA's an offer to replace US$570 million in defaulted bonds is
likely to dampen creditors' interest, according to bondholders.
Reuters recalls that Alestra's shareholders offered bondholders
US$65 million to buy back some of the bonds at 43 cents on the
dollar. The rest would be exchanged for bonds with longer
maturities in a swap that requires approval from holders of 95%
of the bonds.

"People would like to see more cash put on the table so that the
company can both pay a higher price for the bonds and retire more
of the debt," said Robert Rauch, director of research for
Gramercy Advisors, which owns Alestra bonds.

Alestra's bondholders, who include Latin America's wealthiest
businessman, Carlos Slim, are betting 49% owner AT&T Corp.
considers its Mexican operations strategic enough to increase the
US$32.5 million it pledged to support the restructuring offer.
But what concerns them most is that even if shareholders offer
more cash, Slim, the owner of more than US$100 million in Alestra
bonds, won't accept the terms.

Mr. Slim controls Alestra's largest competitor, Telefonos de
Mexico SA, and has enough bonds to block an agreement under terms
set by the Company for acceptance of its offer.

Alestra's other shareholders are steel and chemical producer Alfa
SA and Grupo Financiero BBVA Bancomer SA.

          Investor Relations:
          Alberto Guajardo
          Phone: (52-818) 625-2219

COPAMEX: Poor Financials Prompts S&P Credit Rating Cut
Standard & Poor's Ratings Services said Wednesday it lowered the
local and foreign currency corporate credit ratings on consumer
products and paper producer Copamex S.A. de C.V. to 'B+' from
'BB-'. The downgrade reflects Copamex's inability to improve its
operating performance and reduce debt in a material way,
resulting from the highly competitive environment and current
market conditions that have deteriorated its financial profile.

The outlook is stable. Copamex's debt totals US$508 million.

The Mexican-based company has not been able to improve its
operating margins due to the increased price competition from
imports in the packaging division; lower prices in the
international paper markets; and to a lesser extent, competitive
pressures in the consumer products division. As of December 2002,
operating margins decreased to 15% compared to 17% as of December

Although during the past year, the company was able to reduce
debt by around US$15 million and to refinance an important
portion of its short-term debt, leverage (US$508 million as of
December 2002) remains high with a total debt to EBITDA and
EBITDA interest coverage ratios of 4.5x and 2.4x respectively, as
of December 2002, compared with 3.6x and 2.4x as of December
2001. Current total debt to EBITDA is 4.19x.

Liquidity is tight. At December 2002, Copamex had around US$8
million in cash and short-term investments, and about US$29.6
million in short-term lines of credit available. The company has
US$123 million in short term debt for 2003.

The stable outlook reflects Standard & Poor's expectation that
the company should be able to gradually increase its cash flow
generation (in line with economic recovery in the country) and
reduce its debt levels by continuously increasing its higher
value-added product mix.

Standard & Poor's expects that the company will be able to
continue rolling over its existing short-term obligations, and
has incorporated this assumption in the ratings. Any indication
that the refinancing of the company's debt is at risk might
result in a rating or outlook change. Additionally, if the
company's financial position requires it to seek secured
financing, the senior unsecured debt rating could be lowered due
to structural subordination.

Copamex is one of the leading producers of value-added paper-
based consumer products and industrial paper products in Mexico,
with sales of US$754 million as of December 2002. The company
participates in three major segments: consumer products,
packaging, and printing and writing paper, which as of December
2002 represented 48%, 27%, and 24% respectively of the company's
total sales.

ANALYSTS:  Beatriz Coll, Mexico City (52) 55-5279-2016
           Patricia Calvo, Mexico City (52) 55-5279-2073


WEISE SUDAMERIS: Intesa Mulls Potential Sale
Italy's Banca Intesa SpA said it is not ruling out a possible
sale of its Peruvian subsidiary Banco Wiese Sudameris, Dow Jones
Newswires reports, citing Intesa chief executive Corrado Passera.

Mr. Passera's comments contradicted last month's announcement
that the Italian bank, after completing a review of Wiese's
financial situation, will no longer sell the subsidiary. Instead,
it will support the bank by investing US$150 million in it.

Indeed, just recently, Banca Intesa sent US$150 million to
continue Banco Wiese Sudameris' restructuring.

Now, however, Intesa is indicating that it will put Banco Wiese
Sudameris on the block as part of an effort to rid itself of
various Latin American holdings. The Italian bank admits the
operation won't be easy.

"In Peru, given the size of the bank and the market share, it is
difficult to sell," Mr. Passera said, adding however, that no
final decision has been made.

Banco Wiese Sudameris has delisted its New York-traded ADR, but
it continues to have a small float on the Lima Stock Exchange.

CONTACT:  IntesaBci
          Investor Relations:
          Piazza della Scala, 6
          20121 - Milano
          Fax: (39) 02 8850 2587
                Andrea Tamagnini, Tel: (39) 02 8850 3180
                Marco Delfrate, Tel: (39) 02 8850 2622
                Cristina Paltrinieri, Tel: (39) 02 8850 3571
                Carla De Alberti, Tel: (39) 02 8850 3159
                Giorgio Grossi, Tel: (39) 02 8850 3189
                Anna Gervasoni, Tel: (39) 02 8850 3466
                Maria Vittoria Buscicchio, Tel: (39) 02 8850
                Manuela Banfi, Tel: (39) 02 8850 3273

          Dionisio Derteano, 102 Esquina con Miguel Seminario
          Lima 27, Peru
          Phone: +51-1-211-6000
          Fax: +51-1-440-7945
          Luis F. Wiese de Osma, Chairman
          Eugenio Bertini, CEO
          Carlos Palacios Rey, President, Executive Committee


* Uruguayan Delegation Off to New York, Italy to Sell Debt Plan
No less than the central bank chief himself was among the
official delegation that embarked on a road trip Wednesday to
convince bondholders to participate in Uruguay's voluntary debt
swap, says Reuters.

The trip includes a trans-Atlantic swing, from New York to Italy,
says the news agency, which added that the move could heap
praises from Wall Street. Accordingly, foreign creditors have
long waited a similar move by neighbor, Argentina, which
ironically triggered Uruguay's decline from being one of Latin
America's stable economies.

The government announced the long-speculated voluntary debt-
restructuring program last Tuesday, offering longer-term bonds
for debt coming due over the next five years.

"It is aimed at clearing financing over the next five years.   
This will work if there is a high level of participation,"
Reuters quoted Central Bank President Julio de Brun as saying

To be coordinated by U.S. investment bank, Salomon Smith Barney,
restructuring described by the government as "market friendly"
could cover up to US$3 billion in debt issued in foreign
currency, says Reuters. Uruguay's debts total US$12 billion and
are rated 'CCC' and 'CCC-' by Standard & Poor's and Fitch,

* Fitch Downgrades Uruguay to 'CCC-' Negative Outlook
Fitch Ratings downgraded Wednesday Uruguay's long-term foreign
currency and long-term local currency (Uruguayan Peso) ratings of
Uruguay to 'CCC-' from 'B-' and 'B', respectively. The short-term
local currency and foreign currency ratings were both lowered to
'C' from 'B'. The Rating Outlook remains Negative.

The downgrades come on the announcement yesterday of the
government's plans for a debt exchange with bond investors. The
negative rating outlook reflects concern that the debt exchange
is likely to imply net present value (NPV) losses to bond
investors which would be considered a default event by Fitch. To
the extent that certain local currency bonds are excluded from
the exchange, these instruments might not be downgraded further.

The government has elected to restructure obligations on domestic
and externally-issued debt with original maturities of one year
or more in order to close a substantial fiscal financing gap.
Based on its expectations of a budget deficit higher than the
target identified in the previous IMF program, Fitch estimates
this year's gap at about $450 million, given scheduled
amortizations of $1.45 billion and expected disbursements of
$1.37 billion. Available liquidity is insufficient to cover the
estimated gap in 2003; gross international reserves were $520
million at March 10, and were negative net of IMF borrowing.
Uruguay currently has no access to capital markets.

The ratings have been under pressure for some time, as first
indicated by the negative rating outlook assigned in July 2001.
Since then, Uruguay's sovereign ratings have undergone successive
downgrades because of contagion from Argentina's default, a
banking crisis, drastic depreciation of the Uruguayan peso, and,
now, the poor outlook for public finances and growth in light of
the cumulative impact of these pressures. General government debt
to GDP rose from 54% in 2001 to about 94% at year-end 2002
because of the peso devaluation, economic contraction of about
10%, and continued fiscal deficits.

Pending debt exchanges are likely to be considerably more
comprehensive than the small one affected with pension funds in
November. Because US$4.5 billion of Uruguay's US$11.5 billion in
public debt is with multilaterals creditors and cannot generally
be rescheduled, more of the adjustment burden will have to fall
on bond debt, which accounts for US$5.8 billion, and is nearly
all in U.S. dollars. In order for bond debt restructuring to
significantly improve the sustainability of Uruguay's debt, it
would have to improve the debt's net present value, a trigger for
Fitch's definition of default, even if defined by the government
as 'voluntary'.

Once the terms of the debt exchange are announced, Fitch would
lower the ratings to 'CC' if there are clear NPV losses to bond
investors. If local currency instruments are excluded from the
exchange, the long-term local currency rating could remain at
'CCC-'. After such an exchange is completed, the ratings for
those instruments included would be assigned a default rating.
The new debt instruments created by the exchange would be
assigned a non-default rating once Fitch has completed an
assessment of the terms and seniority of the new debt, as well as
the capacity and willingness to meet these obligations going


PDVSA: Cuts Prices To Bolster Market Share After Strike
Petroleos de Venezuela, S.A. is offering discounts on crude oil
to recapture market lost during a two-month national strike.
Local paper El Universal cited former employees of the
Venezuela's state oil Company saying that as much as US$7 per
barrel is offered.

Former PDVSA sales chief Ciro Izarra, said that the Company is
offering discounts as it is having a hard time welling its crude.
Presently, light crude from the country sells for about US$37 per
barrel, said Universal.

Mr. Izarra added that the Company is importing gasoline to meet
domestic demand. For this month alone, some 3.8 million barrels
have been imported. A total of 11.15 barrels were imported since
the strike.

Workers, except those from the oil industry ended the strike last
month. The strike, aimed at deposing President Hugo Chavez,
almost totally crippled Venezuela's main source of income - oil.
Mr. Chavez retaliated by dismissing thousands of workers from

PDVSA: Paraguana Refinery Resumes Exports
The Paraguana refinery complex owned by Petroleos de Venezuela SA
(PDVSA), Venezuela's state oil Company, has resumed exports of
petroleum products, though at a level lower than before the
national strike.

An executive who requested anonymity told Dow Jones Newswires
that the oil tanker Caura, from PDVSA's Marina unit left port
with 185,000 barrels of gas oil and lubricants on Tuesday. The
products will be brought to Panama, said the source.

Dow Jones added that the refinery, which closed down in December,
has not resumed gasoline production as of the time of the report.
However, the production of gas oil has been restarted, and about
20,000 - 30,000 barrels are produced daily, said former PDVSA
crude trading manager, Ciro Izarra.

Mr. Izarra's figures did not corroborate with government reports
that that the refinery is producing about two thirds of its
940,000 barrels per day installed capacity, or about

Izarra contradicts government reports the refinery is processing
about two-thirds of its 940,000 b/d installed capacity; or
approximately 627,000 barrels per day.

PDVSA: Puerto La Cruz Terminal Returns to Normal Operations
The Guaraguao shipping terminal in Puerto La Cruz of Venezuelan
state oil monopoly Petroleos de Venezuela SA (PdVSA) resumed
normal operations, Dow Jones Newswires reports, citing a Company

The terminal was closed when a strike that almost crippled
Venezuela's oil industry hit the country. PDVSA said that it had
shipped over 6 million barrels of crude oil through this terminal
in the eastern side of Venezuela.

PDVSA lifted its force majeure, which was declared in the first
week of December for crude sales earlier this month but has
maintained it on some products because its refineries aren't yet
operating normally, said the report.

About 16,000 PDVSA workers were dismissed as President Hugo
Chavez' reaction to the strike that aimed for his removal from

A number of PDVSA's oil refineries that were affected by the
strike are starting to return to normal mode. Separate reports
indicated that the Company may offer discounts on its products to
regain the market lost during the strike.


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.

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