TCRLA_Public/030506.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Tuesday, May 6, 2003, Vol. 4, Issue 88

                           Headlines


A R G E N T I N A

ACINDAR: Enhances Cash Tender Offer, Extends Deadline
DISCO: Pays Debt Owed To D&S
* Argentina GDP Surpasses IMF Expectations


B E R M U D A

GLOBAL CROSSING: Trustee Appoints Unsecured Creditors Committee
GLOBAL CROSSING: Seeks Approval on Computer Sciences Settlement
GLOBAL CROSSING: Wants Court OK on Intercompany Asset Transfer
GLOBAL CROSSING: Motion To Reject Westminster, Colorado Lease
GLOBAL CROSSING: Asia Unit Seeks To Assume Headquarters Lease

GLOBAL CROSSING: Files 2nd Objection To Duplicate Claims
GLOBAL CROSSING: Objects To Unsubstantiated Claims
GLOBAL CROSSING: Rejects Certain Stock Ownership Claims
GLOBAL CROSSING: Terminal Seeks Payment Of Postpetition Rent
MUTUAL RISK: Now Operating Under New Name


B R A Z I L

AES CORP.: Forecasts $125M Net Income This Year From LatAm Units
ELETROPAULO METROPOLITANA: AES Expects Debt Solution In Weeks
SABESP: Working Toward $300M Bond Sale
TELEMAR: Posts Unaudited 1Q03 Consolidated Results
VESPER: Lays Off Workers After Parent Reveals Sale Plans


C H I L E

GUACOLDA: S&P Affirms Corporate Credit Rating


C O L O M B I A

AVIANCA: Files Official Response To Willis' Motion
AVIANCA: Willis Replies To Opposition To Motion
AVIANCA: Court Authorizes Payment Of Certain Obligations


J A M A I C A

JUTC: Acquires New Buses, Opens New Route


M E X I C O

PEMEX: Lines Up Projects As Threat of Shortage Looms


N I C A R A G U A

ENITEL: Comptroller Rejects Sale Allegations


T R I N I D A D   &   T O B A G O

BWIA: Union Opposes Top Heavy Management Structure
BWIA: Board To Meet With Government On Tuesday To Clear Quandary


U R U G U A Y

* Japanese Holders Of Uruguay Debt To Decide on Swap Offer Soon


     - - - - - - - - - -

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

ACINDAR: Enhances Cash Tender Offer, Extends Deadline
-----------------------------------------------------
Acindar Industria Argentina de Aceros S.A. (the "Company")
announced on Friday that it is increasing the Offer Amount (as
defined below) in its offer to purchase for cash (the "Cash
Tender Offer"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated April 10, 2003 (the "Offer
to Purchase") and in the related letter of transmittal (the
"Letter of Transmittal" and, together with the Offer to Purchase,
the "Offer"), its 111/4% Notes due 2004 (the "Notes") and certain
of its U.S. dollar denominated indebtedness (the "Dollar Debt").

The aggregate purchase price for all Notes and Dollar Debt that
will be accepted by the Company in the Cash Tender Offer is being
increased from up to U.S.$20 million to up to U.S.$30 million (as
amended, the Offer Amount"). The Offer Amount is being increased
to permit a greater number of the Company's creditors to
participate in the Cash Tender Offer and to provide the Company
with increased flexibility in conducting such offer. The purchase
price for each U.S.$1,000 principal amount of Notes or Dollar
Debt has not changed and will be determined pursuant to a
modified dutch auction procedure in which a Holder of Notes or
Dollar Debt (each a "Holder") may tender such Notes or Dollar
Debt at prices within a price range from U.S.$450 per U.S.$1,000
of principal amount to U.S.$650 per U.S.$1,000 of principal
amount of Notes or Dollar Debt.

As a result of the increase in the Offer Amount, the Company also
announced Friday that the Cash Tender Offer, which was scheduled
to expire at 12:00 p.m., New York City time, on Monday, May 12,
2003, will now expire at 12:00 p.m., New York City time, on
Friday, May 16, 2003 (unless terminated earlier or further
extended by the Company in its discretion or otherwise in
accordance with the terms of the Offer). In addition, the Company
announced Friday that it is extending the Early Tender Date (as
such term is defined in the Offer to Purchase) pursuant to which
a Holder who validly tenders and does not validly withdraw Notes
or Dollar Debt prior to such date will be paid U.S.$50.00 per
U.S.$1,000 principal amount of Notes or Dollar Debt tendered by
such Holder, provided the Cash Tender Offer is consummated and
such Notes and Dollar Debt are purchased in the Cash Tender
Offer. The Early Tender Date, which was scheduled to occur at
12:00 p.m., New York City time, on Monday, May 12, 2003, will now
occur at 12:00 p.m., New York City time, on Friday, May 16, 2003,
unless further extended by the Company in its discretion or
otherwise in accordance with the terms of the Offer.

The Company will not pay any accrued and unpaid interest
(including default interest and additional amounts, if any) on
any Notes and Dollar Debt that are tendered for purchase pursuant
to the Offer. Notes and Dollar Debt tendered in the Cash Tender
Offer may not be withdrawn unless the Company extends the
Expiration Date to a date after June 9, 2003 or makes an
amendment to the terms and conditions of the Offer that is, in
the Company's reasonable judgment, adverse to any Holder that has
tendered such Notes or Dollar Debt in the Offer.

As of 5:00 p.m., New York City time, on May 1, 2003, Holders of
approximately U.S.$24.3 million aggregate principal amount of
Notes and Dollar Debt had tendered in the Cash Tender Offer. The
Cash Tender Offer is made only by, and will remain subject to,
all of the other terms and conditions described in the Offer.

This press release is not an offer to purchase the company's
notes or dollar debt in any jurisdiction in which it is unlawful
to make such offer under applicable securities or blue sky laws.
The summary of the terms of the offer contained herein is not
complete and is qualified in its entirety by reference to the
offer to purchase and the letter of transmittal. Holders of notes
and dollar debt are advised to review the offer to purchase and
the letter of transmittal before making a decision with regard to
tendering their notes or dollar debt in the cash tender offer.
Tenders of notes and dollar debt in the cash tender offer may
only be effected in accordance with the terms and subject to the
conditions contained in the offer to purchase and the letter of
transmittal including, without limitation, the approval of the
argentine central bank, if required, for the cash payments to be
effected in connection with the cash tender offer.

The Dealer Manager for the Cash Tender Offer is Credit Suisse
First Boston LLC ("CSFB"). The Depositary for the Cash Tender
Offer is JPMorgan Chase Bank. The Information Agent for the Cash
Tender Offer is Georgeson Shareholder and its telephone numbers
are North America: Banks and Brokers Call: +1 (212) 440-9800,
toll - free (800) 368-2245 and Europe and Latin America: +39-06-
42-171-777. You can also contact the Information Agent at
acindarinfo@gscorp.com.

Additional information concerning the terms of the Cash Tender
Offer, including all questions relating to the mechanics thereof,
may be obtained by contacting the Information Agent or CSFB at +1
(212) 538-8474 or U.S. toll-free at (800) 820-1653.


DISCO: Pays Debt Owed To D&S
----------------------------
Disco S.A., an Argentine unit of Dutch retail giant Royal Ahold
NV, paid Chilean retailer D&S SA (DYS) ARS128.7 million on Friday
($1=ARS2.795) to fulfill an obligation that was originally valued
at US$90 million, Dow Jones reports, citing a Disco spokesman.

The companies have been in conflict over what currency Ahold was
to pay D&S for the debt, which covers the acquisition of 10
stores from D&S in 2000.

After the acquisitions, Argentina devalued its currency, the
peso, which had been pegged one-to-one to the dollar and, as part
of a series of emergency economic laws designed to contain the
fallout from that crisis, it issued laws converting dollar-
denominated contracts into devalued pesos.

On that basis, Disco has argued that its payment to D&S should be
in pesos, not dollars. But with the peso falling as much as 75%
against the dollar last year, D&S insisted on a dollar-based
payment.

"Disco has effected the payment in pesos and cleared its debt,"
the Disco spokesman said Friday. "It is the position of Disco
that this was a contract drawn up under Argentine law and
therefore that it is in fulfillment of Argentine law with this
payment."

The payment, according to the spokesman, was made at a rate of
ARS1.43 to the original dollar value of the debt, based on the
terms of Decree 240/2002, under which non-bank contracts were
"pesified" at a one-to-one rate but were subject to an interest
rate adjustment indexed to an inflation-based coefficient, known
as CER.


* Argentina GDP Surpasses IMF Expectations
------------------------------------------
Argentina's surplus and first quarter gross domestic product met
the requirements of the International Monetary Fund, the Jang
group says, citing a government statement. Argentina's economy
has shown signs of recovery from a deep recession.

Economy Minister Roberto Lavagna relates that the country posted
an ARS600 million (US$214 million) primary surplus in April, way
up above the IMF's ARS400 million requirement.

The report adds that GDP registered a 4.5 percent year-over-year
growth, in line with the government's forecasts.

Mr. Lavagna added that Tax revenues went up 89.2 percent to
ARD5.457 billion in April. Tax revenues were boosted by the sharp
currency devaluation last year. However, the government added,
incipient economic recovery is also one of the reasons behind the
revenue climb.

Argentina expects ARS74 billion in tax revenues this year, 46.6
percent up from that of last year. The inflation rate is expected
to come at 22 per cent this year, but a recent statement from the
government indicates that the figure may be about 14 percent.



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

GLOBAL CROSSING: Trustee Appoints Unsecured Creditors Committee
---------------------------------------------------------------
Pursuant to Sections 1102(a) and (b) of the Bankruptcy Code, the
United States Trustee for Region II appoints these creditors,
being among the largest unsecured claimants who are willing to
serve, to the Official Committee of Unsecured Creditors of Asia
Global Crossing:

   A. 360networks Corporation
      2401 4th Ave., Suite 1100, Seattle, WA 98121
      Attn: Chris Mueller, Vice President - Corp. Development
      Phone: (206) 239-4076

   B. Clearwater Capital Partners Fund I, LP
      535 Madison Ave., 7th Floor, New York, NY 10022
      Attn: Robert Perry
      Phone: (212) 878-3584

   C. Varde Partners Inc.
      3600 West 80th St., Suite 425, Bloomington, MN 55431
      Attn: George G. Hicks, Managing Director
      Phone: (952) 893-1554

   D. Ashmore Asset Holder PCC No. 3 Limited
      20 Bedfordbury, London WC2N 4BL
      Attn: Tim Davis
      Phone: 44 (0)20 7557-4126

   E. The Bank of New York, Indenture Trustee
      101 Barclay St., Floor 8W, New York, NY 10286
      Attn: Gary Bush
      Phone: (212) 815-2747

(Global Crossing Bankruptcy News, Issue No. 39, Bankruptcy
Creditors' Service, Inc., 609-393-0900)


GLOBAL CROSSING: Seeks Approval on Computer Sciences Settlement
---------------------------------------------------------------
According to Michael F. Walsh, Esq., at Weil Gotshal & Manges
LLP, in New York, Computer Sciences Corporation is Global
Crossing's single largest retail customer.  Global Crossing
provides CSC with a variety of telecommunications services,
including Global Frame Relay, IP Transit, Private Line,
conferencing and voice services.

Since the Petition Date, Global Crossing's relationship with CSC
has been strained.  In fact, on June 28, 2002, CSC filed a motion
to terminate its contractual relationship with Global Crossing.
Since that date, the parties have been simultaneously engaged in
discovery and litigation related to the termination and in
settlement negotiations.  In March 2003, Global Crossing and CSC
agreed to the terms of a settlement to resolve the issues between
the parties, including an amendment to their existing contract.
By this Motion, Global Crossing seeks approval of this
settlement.

Mr. Walsh relates that Global Crossing Telecommunications, Inc.,
is the debtor-entity that provides telecommunications services to
CSC pursuant to that certain Amended Master Services Agreement,
dated November 1, 2001.  Prior to the execution of the MSA, the
parties entered into that certain Master Services Agreement,
effective as of December 15, 2000.  After 10 months of deployment
and operation under the Original Agreement, CSC and GX
Telecommunications mutually agreed to enter into the MSA to
facilitate the provision of additional services to CSC.

According to Mr. Walsh, the MSA required CSC to spend all of its
"Available Spend" on certain telecommunications services provided
by Global Crossing, up to a maximum of $645,000,000 over twelve
years.  The MSA also provided, subject to specific terms and
conditions, for the payment of shortfall charges under certain
circumstances if CSC did not meet certain annual targets.  In
addition, the MSA contained a "termination at will" provision
which entitled CSC to terminate the MSA at any time on a no-fault
basis after payment of a $160,000,000 termination charge.  The
MSA also facilitated the outsourcing of a portion of CSC's Global
Network to Global Crossing, at CSC's option.

On June 28, 2002, CSC filed a Motion to Modify the Automatic Stay
pursuant to which CSC sought to terminate the MSA.  CSC contended
that the Debtors had materially breached the terms of the MSA by
failing to provide:

     (i) the requisite amount of Network Availability;

    (ii) a network that was "fully redundant"; and

   (iii) the amount of network bandwidth required by the MSA.

The Debtors disputed CSC's factual allegations and maintained
that the Debtors had fully performed all of their obligations
under the MSA.  Both the Debtors and CSC commenced discovery in
advance of litigation on the CSC Motion.  In addition, on
September 30, 2002, CSC filed a proof of claim against GX
Telecommunications' estate for $3,750,000.

Following extensive arms-length negotiations, the Debtors and CSC
have agreed to the terms of a settlement as well as an amendment
and restatement of the MSA, dated as of March 21, 2003, and the
assumption of the MSA.

Pursuant to the Settlement, the MSA will be amended to:

     (i) reduce the initial term;

    (ii) revise CSC's minimum purchase commitments;

   (iii) acknowledge that CSC does not desire to proceed with the
         outsourcing of its Global Network to Global Crossing by
         removing the parties' obligations in relation thereto;

    (iv) revise the Termination Provision;

     (v) clarify the scope and operation of the provisions in the
         MSA regarding service level objectives and guarantees,
         making them consistent with industry standards;

    (vi) clarify CSC's rights to terminate the MSA in the event
         of a failure to comply with the SLAs; and

   (vii) grant mutual releases.

In addition, pursuant to the Settlement, the parties to the MSA
will be able to exercise their rights and remedies under the MSA,
including any contractual termination rights, without further
order of the Court, provided that all rights and remedies are
taken in accordance with the terms and conditions of the MSA.

The MSA is a complex commercial transaction that involves various
payment and usage requirements on the part of CSC.  The most
significant terms of which are:

   A. "Minimum Required Usage" means the minimum amount of
      services that CSC must purchase from the Debtors in each
      year of the Initial Term.

   B. "Actual Usage " means the amount of services actually
      purchased and paid for by CSC.

   C. "Minimum Required Cash Payment" means the minimum payments
      that the Debtors must receive from CSC each year.  These
      amounts are higher than the Minimum Required Usage.

   D. "Adjustment Payment" means the amount CSC must pay at the
      end of each year to make up any difference between CSC's
      Actual Usage and the Minimum Required Cash Payment.

   E. "Total Cash Payments" means the total amount of cash that
      the Debtors have received from CSC at the expiration of the
      Initial Term.

The salient terms of the MSA are:

   A. The initial term of the MSA is reduced from 12 years to
      seven years.

   B. The Debtors will assume the MSA, in accordance with Section
      365 of the Bankruptcy Code.  This assumption will become
      effective on the first day of the first month following the
      Court's entry of a final, non-appealable order approving
      the Settlement.

   C. CSC's purchase and payment commitments during the Initial
      Term are reduced to $151,000,000 which will be payable
      based on this schedule:

                        Minimum
                     Cash Payment   Min. Usage
                     ------------   -----------
         Year 1       $15,000,000   $10,000,000
         Year 2        19,000,000    12,500,000
         Year 3        21,000,000    14,000,000
         Year 4        21,000,000    15,000,000
         Year 5        21,000,000    16,000,000
         Year 6        21,000,000    16,000,000
         Year 7        21,000,000    16,000,000
                                    -----------
         Totals      $139,000,000   $99,500,000

   D. Each year CSC will pay for services as they are purchased.
      CSC is required to purchase services in the amount of the
      Minimum Required Usage amounts.

   E. If the Actual Usage exceeds the Minimum Required Cash
      Payment in any given year, than the amount that exceeds the
      Minimum Required Cash Payment will reduce the following
      year's Minimum Required Cash Payment.

   F. At the end of each year of the Initial Term, CSC will be
      required to make an Adjustment Payment to cover any
      shortfall between the Actual Usage and the Minimum Required
      Cash Payments.

   G. The portion of the Adjustment Payment which covers a
      shortfall between the Actual Usage and the Minimum Required
      Usage will be forfeited by CSC.

   H. The portion of the Adjustment Payment which covers a
      shortfall between the Minimum Required Usage and the
      Minimum Required Cash Payments will be credited towards
      services for the following year.  CSC will only be able to
      utilize the Credit after it has met the Minimum Required
      Usage for that year.

   I. If the Total Cash Payments are less than $151,000,000, CSC
      can elect either to:

      1. renew the agreement for an additional four-year term
         with a new Extended Term Commitment equaling
         $100,000,000 in services plus the amount of the Total
         Shortfall spread equally over the Extended Term; or

      2. pay the difference between $151,000,000 and the Total
         Cash Payments.

   J. The MSA is amended to remove provisions regarding the
      proposed outsourcing of CSC's Global Network and to remove
      the parties' obligations.

   K. The Termination Provision is amended so that CSC may
      terminate the MSA:

      1. for convenience at any time during the Initial Term
         after CSC has paid at least $151,000,000; or

      2. for cause pursuant to the terms of the MSA.

   L. The SLAs contained in the MSA are amended to be consistent
      with industry standards.

   M. After Bankruptcy Court approval of the Settlement, CSC
      agrees to withdraw:

      1. the CSC Motion;

      2. the Assumption Objection; and

      3. the Proof of Claim.

   N. CSC waives its rights relating to the alleged breaches of
      the MSA by the Debtors prior to the effective date of the
      MSA.  The Debtors waive their rights relating to any claims
      against CSC, including any failure by CSC to achieve its
      minimum purchase obligations prior to the effective date of
      the MSA.

Subject to the Court's approval of the Settlement, Mr. Walsh
reports that CSC has agreed that it will waive its right to
assert an administrative claim for damages that result if the
Debtors subsequently reject the MSA.  Rejection damage claims, if
any, will be non-priority, general unsecured claims of the
Debtors' Chapter 11 cases.  Notwithstanding the foregoing, the
parties reserve their rights with respect to any claims that may
be asserted by either the Debtors or CSC pursuant to the MSA that
do not arise from and are not based on the rejection of the MSA
and CSC reserves its right to assert that any claims are entitled
to be treated as administrative claims.

Mr. Walsh insists that the Settlement is fair and equitable and
falls well within the range of reasonableness as it enables the
parties to avoid the costs of further litigation on the CSC
Motion.  Given the complexity of the factual issues relating to
the parties' claims under the MSA and the dollar amounts at
stake, the continued litigation of the issues surrounding the MSA
could be lengthy and expensive.  These undertakings would
continue to be a drain on the Debtors' monetary resources and
divert the attention of the Debtors' management and legal
personnel from their reorganization efforts.

Pursuant to the Settlement, Mr. Walsh notes that the contractual
provisions of the MSA are restructured so that CSC's commitment
under the MSA is reduced to a minimum value of $151,000,000 over
7 years.  Although this is less than the $160,000,000 up-front
payment that the Debtors would receive had CSC exercised its
rights under the Termination Provision, the Debtors believe that
the benefits to their estates from the Settlement far exceed the
potential risks associated with continued litigation.  Most
notably, by entering into the Settlement, the Debtors avoid the
risk of CSC prevailing on its Motion, which would entitle CSC to
terminate the MSA without making any payments.

Even if the Debtors were to prevail in the litigation, Mr. Walsh
believes that CSC would still be able to exercise the Termination
Provision and terminate the MSA.  In that event, notwithstanding
the termination payment of $160,000,000 that the Debtors would
receive, they would lose:

    (i) long term revenues that could exceed the minimum amounts
        under the MSA; and

   (ii) access to CSC's customers.

Moreover, the loss of the Debtors' biggest customer at this time
could affect their ability to attract other customers of CSC's
size. (Global Crossing Bankruptcy News, Issue No. 39, Bankruptcy
Creditors' Service, Inc., 609-393-0900)


GLOBAL CROSSING: Wants Court OK on Intercompany Asset Transfer
--------------------------------------------------------------
Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New
York, recounts that on September 29, 2000, certain Global
Crossing entities, including SAC Brasil Ltda., and Latin American
Nautilus Ltd. entered into that certain Dim Fiber and Capacity
Purchase Agreement, whereby, among other things, SAC Brasil
agreed to:

   -- transfer to LAN dark and dim fiber IRUs on portions of the
      Network located in Brazil; and

   -- to provide certain maintenance and other services.

In exchange for the Brazil IRUs, LAN was obligated to pay SAC
Brasil $29,000,000.  In accordance with the Dim Fiber Agreement,
LAN assigned its rights with respect to the Brazil IRUs to one of
its affiliates, Latin American Nautilus Brasil Ltda.

During the second, third and fourth quarters of 2001, Mr. Walsh
reports that Global Crossing Europe Ltd. received $29,000,000 for
the Brazil IRUs.  As the Brazil IRUs were sold by SAC Brasil to
LAN, these payments were, under the terms of the Dim Fiber
Agreement, due SAC Brasil, not GC Europe.  Brazilian Central Bank
regulations generally require that payments owed to a Brazilian
company must be remitted in Brazil and strictly delineate the
permitted methods of remittance.  Global Crossing could incur
substantial fines and penalties under Brazilian law if it were
determined that they were not in compliance with the Regulations.

By this Motion, Global Crossing seeks approval of an agreement
among GC Europe, SAC Brasil, LAN, LAN Brasil and Latin American
Nautilus S.A. to restructure the Payment to avoid any doubt with
respect to compliance with the Regulations.

Pursuant to the Agreement, GC Europe and SAC Brasil on the one
hand, and LAN SA, LAN and LAN Brasil on the other, each intends
to enter into an agreement.  Pursuant to the Agreement, the
Payment will be refunded by GC Europe to LAN SA.  After receipt,
LAN SA will transfer the Payment to LAN Brasil, which will then
transfer the Payment to SAC Brasil as the consideration due and
owing to SAC Brasil under the Dim Fiber Agreement.  The Parties
will appoint a bank to facilitate transfers contemplated under
the Agreement.

The salient terms of the Agreement are:

   A. LAN SA and GC Europe will irrevocably appoint a mutually
      agreeable bank to act as the Account Bank.  The Account
      Bank will agree to establish an account in the name of LAN
      SA in the New York Branch of the Account Bank.

   B. GC Europe will deposit $29,000,000 into the Account.

   C. LAN SA and GC Europe irrevocably instruct the Account Bank,
      after receipt of the LAN SA Payment, to immediately
      transfer these funds to LAN Brasil in a bank account opened
      by the Account Bank in a branch located in Brazil in the
      name of LAN Brasil.

   D. The Account Bank is irrevocably instructed to transfer the
      LAN Brasil Payment as soon as feasible to an account of SAC
      Brasil.

   E. The Account and the LAN Brasil Account will be operated by
      the Account Bank as provided in the Agreement and any
      amount in the Account will be paid out only in accordance
      with the Agreement.

   F. Any failure in SAC Brasil's timely receipt of the funds as
      specified in the Agreement will be deemed a material breach
      of LAN and LAN Brasil's obligations under section 7 of the
      Dim Fiber Agreement and Global Crossing will have the
      right to suspend use of the Brazil IRUs until the payment
      is made in full, as well as any other remedies that Global
      Crossing has at law, including a drawdown on the Telecom
      Italia S.P.A. guaranty provided in connection with the Dim
      Fiber Agreement.

Mr. Basta contends that these transfers will avoid any doubt with
respect to SAC Brasil's compliance with the Brazilian Central
Bank regulations and thus significantly reduce the risk of
potentially substantial fines and penalties.  Global Crossing has
determined, in the sound exercise of business judgment, that the
transfers contemplated by the Agreement will best serve Global
Crossing, their creditors, and all parties in interest.  The
transfer of $29,000,000 to SAC Brasil via LAN SA and LAN Brasil
will allow SAC Brasil to better comply with the Regulations and
avoid substantial fines and penalties.

The Agreement contains these safeguards for GC Europe and SAC
Brasil and is designed to minimize any risk to Global Crossing:

   A. The Agreement contemplates irrevocable instructions to the
      Account Bank to make the LAN Brasil Payment.

   B. The Agreement contemplates irrevocable instructions to the
      Account Bank to make the SAC Brasil Payment, and this
      payment will be made with minimum delay.

   C. A default by the LAN Entities under the Agreement is deemed
      a default under the Dim Fiber Agreement, pursuant to which
      Global Crossing may suspend the Brazil IRUs.

   D. Telecom Italia's guaranty provided in connection with the
      Dark Fiber Agreement covers the repayment due from LAN and
      LAN Brasil.

Global Crossing believe that these safeguards will:

    (i) substantially reduce the likelihood that any LAN Entity
        would take deliberate actions to redirect the LAN SA
        Payment or the LAN Brasil Payment away from SAC Brasil;
        and

   (ii) induce cooperation from the LAN Entities should any
        unforeseeable problems arise prior to the SAC Brasil
        Payment.

Global Crossing believes that the benefits they will realize from
the Agreement and the transfers contemplated are self-evident and
clearly justified, particularly because of the substantial
safeguards provided pursuant to the terms of the Agreement.
(Global Crossing Bankruptcy News, Issue No. 39, Bankruptcy
Creditors' Service, Inc., 609-393-0900)


GLOBAL CROSSING: Motion To Reject Westminster, Colorado Lease
-------------------------------------------------------------
By this Motion, Global Crossing seeks to reject the lease for the
property located at 12110 North Pecos Street, Westminster,
Colorado effective as of March 26, 2003, the date they vacated
the Premises.  Global Crossing is current with its rent
obligations under the North Pecos Lease through March 25, 2003.

Because of an ongoing dispute with TriNet Essential Facilities X,
Inc., the landlord for the Premises, Global Crossing requests
that rejection of the North Pecos Lease be effective March 26,
2003.  Global Crossing requests that the rejection be contingent
on an order approving the assumption of the lease for the
premises located at 1499 West 121st Street, Westminster, Colorado
being approved by the Court, entered on the docket and becoming a
final order.  This order will become final 10 days after
docketing so that no appeal of the order is then pending and no
stay pending appeal or any similar relief having been granted.

Paul M. Basta, Esq., at Weil Gotshal & Manges LLP, in New York,
recounts that on December 29, 1995, the Debtors and Trinet
Facilities X Inc. entered into the North Pecos Lease and the 1499
Lease for different tracts of property in the same development.
The Debtors used both properties for office space until March 26,
2003, when they fully vacated the Premises.  On March 26, 2003
the Debtors informed counsel for Trinet that they were vacating
the Premises and that they would seek to reject the North Pecos
Lease effective as of March 26, 2003.  On March 27, 2003, the
Debtors sent Trinet a check, by overnight delivery, for rent for
the period from March 1, 2003 through March 26, 2003.  The
Debtors continue to occupy the premises under the 1499 Lease.

Pursuant to the Contract & Lease Assumption Procedures, Mr. Basta
relates that the Debtors posted the 1499 Lease on the database as
a lease to be assumed but the North Pecos Lease was not listed as
a lease to be assumed.  On December 6, 2002, Trinet filed an
objection to the Debtors' designation of their cure cost for the
1499 Lease at zero.  The Objection alleges that there are cross-
default provisions in the Leases which require the Debtors to
either reject both Leases or assume both Leases and cure all
defaults.  However, the Debtors believe that the Lease are
separate agreements evidencing distinct transactions.  Moreover,
the Debtors do not believe there is an enforceable cross-default
provision in the 1499 Lease that would affect the cure amount or
impair their ability to assume the 1499 Lease and reject the
North Pecos Lease.

The Debtors and Trinet have engaged in discussions to attempt to
resolve the issues raised in the Objection.  However, as of March
31, 2003, no resolution has been achieved.

Mr. Basta states that the Debtors entered into the Leases with a
view towards an expansion of their operations in line with the
generally anticipated growth of the telecommunications industry.
The downturn in the telecommunications sector and the Debtors'
coincident workforce reductions has limited their need for office
space.  As a result, maintaining both Leases is no longer
essential to Global Crossing's operations.

It is not in the Debtors' best interests to market the North
Pecos Lease for sale or sublease the underlying property because
the rent due under the North Pecos Lease is above current market
value.  As a result, the North Pecos Lease is a cash drain on the
Debtors' businesses.

Mr. Basta explains that the Debtors seek to reject the North
Pecos Lease at this time to ensure that they do not continue to
incur postpetition rent obligations under this lease while the
Objection is being resolved.  Moreover, the Debtors seek to
reserve their right to assume the North Pecos Lease if the Court
grants the Objection and determines that the Leases must be
treated similarly or that the 1499 Lease contains an enforceable
cross-default provision with respect to the North Pecos Lease.
As a result, the Debtors seek entry of an order authorizing the
rejection of the North Pecos Lease effective March 26, 2003,
provided, however that the rejection will be contingent on the
entry of a Final Order overruling the Objection and approving the
assumption of the 1499 Lease.

Mr. Basta believes that the equities dictate that rejection of
the North Pecos Lease should be effective as of the date the
Debtors vacated the Premises.  The Debtors provided Trinet with
notice that they relinquished possession of the Premises as of
March 26, 2003 and that they intended to reject the North Pecos
Lease as of that date.  See Bethlehem Steel Corp. (In re
Bethlehem Steel Corp.), 2002 WL 31548723 at *5 (S.D.N.Y. 2002)
(permitting retroactive rejection where the balance of the
equities dictates); In re Thinking Machines Corp. v. Mellon
Financial Services Corp. #1 (In re Thinking Machines Corp.), 67
F.3d 1021 (1st Cir. 1995) ("a bankruptcy court is authorized to
assign a retroactive rejection date...when the principles of
equity so dictate."  The equities favor permitting retroactive
rejection here to save the Debtors the expense they would incur
if rejection of the North Pecos Lease was effective as of the
date this Motion is approved.

In addition, the litigation of the Objection should not be
permitted to delay the rejection of the North Pecos Lease.  See
In re Jamesway Corp., 179 B.R. 33, 38 (S.D.N.Y. 1995) (finding
that the effective date of rejection should not be delayed by the
landlord's filing of an objection).  In light of the foregoing,
the Debtors submit that rejection should be effective as of March
26, 2003.

The Debtors have determined that the personal property remaining
in the Premises is of inconsequential value and of no benefit to
the estate.  Mr. Basta assures the Court that none of the
personal property in the Premises poses an environmental hazard.
In consideration of the foregoing, the Debtors submit the
abandonment of any personal property currently remaining in the
Premises should be effective as of the date rejection of the
North Pecos Lease is effective in accordance with the order
approving this Motion.

The Debtors also request, pursuant to Rule 3003(c) of the Federal
Rules of Bankruptcy Procedures, that the Court order that all
proofs of claim relating to the relief requested will only be
considered appropriately and timely filed if actually received no
later than 5:00 p.m. prevailing Eastern Time on the day that is
30 days after the entry of any order providing that the Debtors
are not required to assume the North Pecos Lease if they assume
the 1499 Lease by either:

    (i) mailing the original proof of claim to Global Crossing
        Claims Processing, c/o United States Bankruptcy Court for
        the Southern District of New York, P.O. Box 5014, One
        Bowling Green, New York, New York 10274-5014; or

   (ii) delivering the original proof of claim by messenger or
        overnight courier to Global Crossing Claims Processing,
        c/o United States Bankruptcy Court for the Southern
        District of New York, One Bowling Green, New York, New
        York 10004-1408. (Global Crossing Bankruptcy News, Issue
        No. 39, Bankruptcy Creditors' Service, Inc., 609-393-
        0900)


GLOBAL CROSSING: Asia Unit Seeks To Assume Headquarters Lease
-------------------------------------------------------------
Asia Global Crossing sought and obtained entry of an order:

     (i) authorizing AGX Development Corp. to assume that certain
         Office Space Lease, dated as of April 17, 2002, with The
         Irvine Company pursuant to Section 365(a) of the
         Bankruptcy Code;

    (ii) authorizing AGX Development to enter into an amendment
         of the Headquarters Lease pursuant to Section 363(b) of
         the Bankruptcy Code; and

   (iii) authorizing AGX Development to incur and pay de minimis
         expenditures in connection with vacating and releasing
         from the Headquarters Lease a substantial portion of
         office space that exceeds the current and anticipated
         needs of Asia Global Crossing.

The Headquarters Lease is Asia Global Crossing' sole lease of
nonresidential real property and governs the rental terms for the
only office space used.

Richard F. Casher, Esq., at Kasowitz Benson Torres & Friedman
LLP, in New York, recounts that on December 23, 2002, the Debtors
filed the Extension Motion to decide whether to assume or reject
leases.  Pursuant to the Extension Motion, the Debtors requested
an order from the Court extending until April 30, 2003, the time
within which they were required to assume or reject the
Headquarters Lease.  The basis for the request was that the
"Headquarters Lease is integral to the continued operation of the
Debtors' pending the consummation of the Sale and is expected to
be essential during the period in which the Debtors wind-down
their operations following the Sale."

With the recent consummation of the Asia Netcom Transaction, the
Debtors' next critical task in their Chapter 11 cases is to
negotiate and file a liquidating plan of reorganization and seek
confirmation of this plan. The Debtors expect that their
liquidating plan will be considered for confirmation in the July-
August 2003 timeframe.  Therefore, with the Asia Netcom
Transaction having closed and the end of the Chapter 11 cases
within sight, the Debtors now can more accurately project their
office space requirements.

In that regard, Mr. Casher states that the Debtors and their 13
remaining employees need office space in which to conduct and
wind up their businesses over the next few months.  The parties
have agreed that the Debtors will assume the Headquarters Lease
and, concurrently, will enter into an amendment of the
Headquarters Lease in order to rationalize the reality of the
Debtors' current situation and their diminished office space
needs.  The principal terms the Headquarters Lease and the
proposed Amendment are:

   A. Lease Term: Commencing April 23, 2003.  Month-to-month
      basis, terminable on 30 days notice after July 1, 2003.
      Lease terminates December 31, 2003.

   B. Basic Rent: $5,057 per month.

   C. Floor Space: 1,923 rentable square feet.

In addition, the Debtors have prepaid the rent due under
Headquarters Lease through April 30, 2003.  By entering into the
Amendment and vacating, by April 22, 2003, the portion of the
Debtor's current office space that exceeds their space
requirements, the Debtors will receive a $10,133.08 credit
rebate.  The Rebate will be applied to the Debtors' rental
obligations pursuant to the Amendment.

In connection with the reduction and reconfigurement of its
current office space, the Debtors will need to expend a de
minimis amount of funds to, inter alia, move equipment, furniture
and files from the space it is vacating and reconfigure certain
telecommunications systems.  The Debtors currently occupy
substantially all of a floor in a building in Los Angeles,
California.  The Debtors will remain on the same floor, but will
occupy a significantly smaller section of this floor.

Mr. Casher contends that the Debtors' decision to assume the
Headquarters Lease clearly satisfies the business judgment
standard.  The Debtors have determined in the exercise of its
sound business judgment that the assumption of the Headquarters
Lease is in the best interest of its estate because they need
office space from which to conduct operations relating to the
plan approval process and the wind-up of their Chapter 11 cases.
Furthermore, the concurrent amendment of the Headquarters Lease
rationalizes the Debtors' office space to their current and
projected diminished requirements, thereby significantly reducing
their financial obligations under the Headquarters Lease.  After
finding that the Debtors' exercised its sound business judgment
in determining that assumption of the Headquarters Lease is in
the best interest of their estate, the Court should approve
assumption under Section 365(a) of the Bankruptcy Code.  See,
e.g., In re Child World, Inc., 142 B.R. 87, 89 (Bankr. S.D.N.Y.
1992); In re TS Indus., Inc., 117 B.R. 682, 685 (Bankr. D. Utah
1990); In re Del Grosso, 115 B.R. 136, 138 (Bankr. N.D. Ill.
1990); In re Ionosphere Clubs, Inc., 100 B.R. 670, 673 (Bankr.
S.D.N.Y. 1989).

Mr. Casher insists the Debtors have ample and sound business
justifications for modifying the Headquarters Lease.  After the
consummation of the Asia Netcom Transaction, the Debtors no
longer have an operating business.  Since the Debtors no longer
have an operating business, and currently have only 13 employees
in the office space that is governed by the Headquarters Lease,
much of the office space they currently occupy is no longer
needed.  However, the Debtors do need office space in which to
oversee the plan approval process through the effective date of
their liquidating plan of reorganization.  Therefore, the Debtors
entered into negotiations with the Lessor in order to match its
space needs with its leased space, seeking to save their estate
significant funds, and provide them with maximum flexibility to
use office space for only as long as necessary.  If the Debtors
were forced either to reject the Headquarters Lease or assume the
Headquarters Lease without the negotiated Amendment, they would
incur significant expense and disruption in seeking alternative
short-term office space.
(Global Crossing Bankruptcy News, Issue No. 39, Bankruptcy
Creditors' Service, Inc., 609-393-0900)


GLOBAL CROSSING: Files 2nd Objection To Duplicate Claims
--------------------------------------------------------
Joseph F. Ryan, Esq., at Brown Rudnick Berlack & Israels LLP, in
New York, informs the Court that some creditors filed identical
claims or different claims arising out of the same obligation,
against more than one Debtor.  As of March 6, 2003, Global
Crossing has identified 181 identical claims.  Under the Plan,
each creditor is entitled to only one distribution on account of
these claims.

Accordingly, in order to avoid double recovery by the Claimants,
the GX Debtors request that:

   A. solely for purposes of distribution, the Multiple Claims be
      deemed consolidated as a single claim; and

   B. immediately after the Effective Date of the Plan, all of
      the Multiple Claims will be deemed expunged and disallowed.

Among these claims are:

   Claimant                  Claim #      Amount
   --------------------      -------   -----------
   Accenture LLP              5720     $21,783,143
   Aeorotel Ltd.              4709       6,000,000
   Amdocs Inc.                5422      13,352,209
   Broadview Networks         6305       2,201,757
   Cablevision Lightpath      6521       2,214,203
   Enron Broadband Service     466      22,970,072
   FDS Telecommunications LP   314       1,215,163
   Fleet National Bank        8170      10,272,719
   GE Capital Corp.           3425      36,614,561
   Goodrich & Sherwood        5521       1,137,900
   Infomart New York LLC      4099       3,617,498
   Infomart New York LLC      1210      64,624,075
   Lexent Inc.                1073       2,304,401
   Mastec Inc.                7499      10,378,858
   Nat'l. Telecommunications   570       2,046,189
   CPNet Technologies Inc.     198       1,236,000
   PSI Net Liquidating LLC    7447       1,588,340
   John Pusloskie Jr.         4243      53,000,000
   Ristrac Inc.               4024       2,131,297
   William Sievers             414       1,000,000

(Global Crossing Bankruptcy News, Issue No. 39, Bankruptcy
Creditors' Service, Inc., 609-393-0900)


GLOBAL CROSSING: Objects To Unsubstantiated Claims
--------------------------------------------------
Steven D. Pohl, Esq., at Brown Rudnick Berlack & Israels LLP, in
New York, relates that Global Crossing reviewed proofs of claim
filed with their books and records and have concluded that
certain claims asserted cannot be substantiated.  In particular,
21 proofs of claims totaling $100,413,342 failed to provide
sufficient documentation to support the claims, the liabilities
asserted in the claims are not contained in the schedules, and
the claims were not identifiable through the examination of their
books and records.

The major unsubstantiated proofs of claim filed that Global
Crossing seeks to expunge is Claim No. 4694 filed by R. Craig
Hill for $100,000,000 and Claim No. 8222 filed by Moizel Mayer
for $300,000.

To the extent that any of the claimants provide Global Crossing
with evidence corroborating the claims on or before the deadline
to respond to this objection, Global Crossing will consider this
evidence and proceed as if a response to the objection has been
filed in accordance with the Claims Objection Procedures.  If,
however, a claimant does not timely produce this evidence, Global
Crossing submit that these claims should be disallowed and
expunged.  The objecting reserve the right to object to the
claims on the grounds other than those asserted at a later date.
(Global Crossing Bankruptcy News, Issue No. 39, Bankruptcy
Creditors' Service, Inc., 609-393-0900)


GLOBAL CROSSING: Rejects Certain Stock Ownership Claims
-------------------------------------------------------
Edward S. Weisfelner, Esq., at Brown Rudnick Berlack & Israels
LLP, in New York, informs the Court that gGlobal Crossing has
discovered 625 proofs of claim totaling $10,375,728 based solely
on the claimant's purported status as an owner of shares of
common or preferred stock of Global Crossing Ltd. or Global
Crossing Holdings Ltd.  Ownership of these stocks constitutes an
equity interest in Global Crossing, but does not constitute a
claim against their estates as defined in Section 101(5) of the
Bankruptcy Code.  Moreover, pursuant to the Bar Date Order,
stockholders of Global Crossing are excluded from the requirement
of filing proofs of claim in these Chapter 11 cases.  Thus,
expungement of these claims will not impair any distributions
made under the Plan.  Accordingly, the Objecting Parties submit
that the claims should be disallowed and expunged in their
entirety.

Among these claims are:

   Claimant                  Claim #      Amount
   --------------------      -------   -----------
   Terrence Wood               8748      $158,365
   Mary Thompson               4210       444,795
   James Smith                 9329       231,797
   Safeco High Yield Fund      7834     1,052,500
   Invesco Bond Funds Inc.     5927       379,155
   JP Pons                     8944       150,000
   Zachary Gianaris            9290       900,825
   Fiducie Desjardins Inc.     2782       268,283
   Brach banking & Trust       6011       271,753

(Global Crossing Bankruptcy News, Issue No. 39, Bankruptcy
Creditors' Service, Inc., 609-393-0900)


GLOBAL CROSSING: Terminal Seeks Payment Of Postpetition Rent
------------------------------------------------------------
Terminal Plaza Associates asks the Court to compel Global
Crossing to discharge certain postpetition mechanic's liens and
to pay postpetition unpaid rent and other obligations, plus
attorneys fees, pursuant to Section 365(d)(3) of the Bankruptcy
Code.  In addition, Terminal Plaza seeks recovery of the
reasonable costs associated with removing Debtors' alterations
to, and fixtures and personal property from, the subject
Premises, together with the associated costs of repair and
reasonable rent for the period during which the removal and
repair occurs.

Eric Fishman, Esq., at Pillsbury Winthrop LLP, in New York,
recounts that on November 26, 1999, IXNet, Inc., formerly known
as International Exchange Network, Ltd., entered into a lease
with Terminal Plaza Associates for office space at 450 Mission
Street, San Francisco, California, which is to be converted
primarily into a telecommunications switch site with incidental
related office use.  Pursuant to Sections 1.01 and 34.01(c) of
the Lease, Terminal Plaza agreed to lease to the GX Debtors a
portion of the fourth floor of the Property and up to 1,000
square feet of the basement of the Property for the installation
of ancillary equipment and infrastructure, including generators,
fuel tanks, electrical transformers, HVAC equipment, fiberoptic
cables, and related piping, wiring, and conduits.

Shortly after executing the Lease, Global Crossing determined
that it was necessary for it to enlarge its Ancillary Site beyond
1,000 square feet of Basement space.  In particular, Global
Crossing requested additional space in the Basement and on all
other floors and the roof to house Ancillary Equipment.  At that
time of this request, Global Crossing did not know precisely how
much additional space it would ultimately need to house all of
the Ancillary Equipment nor precisely where on each floor this
additional space would be located.  To accommodate Global
Crossing's needs, Landlord agreed to allow the expansion its
Ancillary Site to other floors on the condition that the Landlord
would approve the location of these Ancillary Sites and that any
additional space occupied would be added to the Lease on the same
terms and conditions as the original Fourth Floor and Basement
premises, including at the same rental rate.

Mr. Fishman relates that Alexander Leff of Terminal Plaza, and
Paul Hilbert and Dennis Crough, on behalf of Global Crossing,
orally agreed in February, 2000, that since the precise quantity
of additional space would be indeterminate until Global Crossing
had finished construction, Terminal Plaza would bill them for the
additional space on an estimated basis, but would wait until they
finished construction before precisely measuring all of the
additional space and formally amending the Lease.  In a letter
from Terminal Plaza to Global Crossing dated April 6, 2000,
Terminal Plaza billed IXNet for 1,606 square feet of additional
space on floors 1, 2, 3, 5 and roof at $41 per square foot per
year, but footnoted this calculation with the statement: "square
footage is estimated.  Actual square footage will be determined
after completion of improvements."  In recognition of its oral
agreement, Global Crossing sent Check No. 352438 to Landlord on
April 13, 2000, representing payment for the invoiced amounts,
including the Additional Space.

On April 27, 2000, Terminal Plaza sent another invoice to Global
Crossing, which stated: "as discussed in my April 6 letter, the
final amount of square footage occupied by IXNet is still
indeterminate because IXNet has not yet completed its build-out
on the roof and basement, nor finished installing vertical risers
through the building.  We will reconcile when the final
dimensions of the occupied space is known."  In a November 6,
2001 letter, Terminal Plaza wrote to Global Crossing that "given
that International Exchange Network's construction has not been
completed, the exact square footage occupied by the Ancillary
Sites have not been determined.  Once construction is complete,
Rent and Tenant's Share of Direct Expenses, Direct Utility
Expenses, Property Taxes and Business Taxes will be adjusted to
reflect the actual square footage that International Exchange
Network occupies in the building."

Although Global Crossing has never fully completed installation
of the Ancillary Equipment nor ever fully finished its
construction, Terminal Plaza estimates that Global Crossing has
occupied 2,458 rentable square feet of space in the Property for
use as Ancillary Sites in addition to its leased premises on the
fourth floor and the 1,000 square feet of basement to which it
was entitled under the Lease.  At the Lease rate of $41 per
square foot per year, the additional rent for the Additional
Space which became due during the postpetition period, plus
unpaid base rent for April 2003, is $168,014.80.

Pursuant to Section 9.01 of the Lease, Mr. Fisher states that
Global Crossing agreed to remove all of its alterations,
Ancillary Equipment and personal property upon surrendering the
Premises and terminating the Lease.  Nonetheless, Global Crossing
now seeks to abandon the Premises without removing the Equipment,
Ancillary Equipment, its Property, trade fixtures, or its
alterations.  The alterations to the Premises and other areas of
the building have reduced their value and made them less
marketable to potential future tenants. The Ancillary Equipment
is installed throughout the building, including behind walls, in
the vertical shafts and horizontal raceways, and in corridors and
other common areas.  Mr. Fisher contends that the exposed
Ancillary Equipment restricts the size of the corridors and
adversely affects their appearance.  The Ancillary Equipment that
fills the vertical shafts and horizontal raceways are difficult
to remove and preclude any existing or future tenants from using
that valuable space in the building for their own purposes.  In
general, the Ancillary Equipment is either obsolete or would not
likely be suitable for a subsequent tenant.  Terminal Plaza
estimates that it would cost at least several hundred dollars in
order to pay for the removal and clean-up of the alterations,
Ancillary Equipment and personal property that Debtor left behind
on the Premises.

Mr. Fisher relates that Global Crossing hired Tishman
Construction Corporation of California as its general contractor,
and, in turn Tishman hired Cupertino Electric, Inc. as one of its
subcontractors, to carry out the "build-out" of the leased
Premises.  In February 2002, mechanic's liens were filed against
the Property in the San Francisco County Recorder's Office on
account of the alleged failure of Tishman and Cupertino to
receive payment from Global Crossing for the construction work
performed at the Property.  Specifically, Tishman filed
Mechanic's Liens amounting to $516,232.51 on February 4, 2002 and
$57,897 on February 6, 2002.  Cupertino filed a Mechanic's Lien
in the amount of $164,252 on February 28, 2002.

The Lease is a "triple net" lease pursuant to which Global
Crossing agreed to pay, in addition to monthly base rent, a pro
rata share of the Property's operating expenses.  Since the
Petition Date, Global Crossing has failed to pay for any of these
expenses.  Specifically, these expenses became due during the
postpetition period and remain outstanding as of April 2003:

   A. Direct Expenses: Pursuant to section 4.01 of the Lease,
      Global Crossing is required to pay a pro rata share of any
      increases in Direct Expenses over and above the Direct
      Expenses payable in the 1999-2000 base year. Global
      Crossing owes $69,280 for its share of estimated increases
      in Direct Expenses that became due during the postpetition
      period.

   B. Direct Utility Expenses: Pursuant to section 4.02 of the
      Lease, Global Crossing is required to pay a pro rata share
      of Direct Utility Expenses. Global Crossing owes $7,512.25
      for its share of Direct Utility Expenses that became due
      during the postpetition period.

   C. Services and Utilities: Pursuant to section 8.01 of the
      Lease, Global Crossing is required to pay for all utilities
      including electricity, garbage removal, janitorial
      services, water, and gas and steam used in the leased
      premises during the term of the Lease. Global Crossing
      owes $59,526.20 for its share of the foregoing services and
      utilities that became due during the postpetition period.

   C. Third Party Fees: Pursuant to section 2.06 of the Lease,
      Global Crossing is required to reimburse Terminal Plaza for
      all third-party fees, including architects and engineers,
      incurred by Terminal Plaza in connection with the
      alterations and improvements made to the leased premises.
      Global Crossing owes $41,854.87 for these third-party fees
      which were incurred during the postpetition period.

   E. Taxes: Pursuant to section 5.01 of the Lease, Global
      Crossing is required to pay a pro rata share of increases
      in certain "Taxes" relating to the Property which are paid
      or incurred by Terminal Plaza over and above the amount of
      taxes payable in the 1999-2000 base year.  Global Crossing
      owes $298.23 for its pro rata share of Increased Taxes
      which became due during the postpetition period.

In a letter dated March 31, 2003, Mr. Fisher states that Global
Crossing informed Terminal Plaza of their intention to reject the
Lease and that they were relinquishing possession of the Premises
effective March 28, 2003.  However, Terminal Plaza contends that
Global Crossing -- which installed cables, wires, conduits and
other equipment throughout the building's vertical shafts and
horizontal raceways, and affixed personal property to the
Premises and Additional Space including racks, generators and a
diesel tank -- remains in constructive possession of the Premises
and Additional Space due to Global Crossing's failure to remove
these items as required by the Lease.

Accordingly, Mr. Fisher asserts that Global Crossing should be
compelled not only to pay in full the Unpaid Rent, Unpaid
Expenses and Attorneys Fees, which both accrued and arose under
the Lease postpetition, but also to immediately satisfy its
postpetition obligation under the Lease to discharge the
Mechanic's Liens.  Section 9.05 of the Lease requires Global
Crossing to discharge any mechanic's liens within 15 days of
filing.  Since the Mechanic's Liens were filed after the Petition
Date, Section 365(d)(3) plainly requires Global Crossing to
fulfill its obligation under section 9.05 of the Lease by
discharging these liens. (Global Crossing Bankruptcy News, Issue
No. 39, Bankruptcy Creditors' Service, Inc., 609-393-0900)



MUTUAL RISK: Now Operating Under New Name
-----------------------------------------
Bermuda-based Mutual Risk Management, Ltd., which has undergone a
restructuring process to avoid bankruptcy, is now doing business
under a new name, IAS Park.

The move, according to a report by the Royal Gazette, follows the
approval of the Company's creditors at a meeting held on April 10
and the Bermuda Supreme Court at a Sanction Hearing on April 25.

In a memo to staff members, chief executive David Ezekiel said
that the Bermuda Supreme Court sanction was a major step, but
there is one more hurdle to come: "I have to appear in the US
courts in the middle of May to get a ruling staying any actions
in the US in order to give effect to the Scheme, but once again
we are hopeful that we will prevail. With some luck we will soon
see the end of all the legal manoeuvres and be in a position to
concentrate on taking IAS Park forward to a bright future."

CONTACT:  MUTUAL RISK MANAGEMENT INC.
          P.O. Box HM 2064
          44 Church Street
          Hamilton HM HX
          Bermuda
          Tel: (800) 772-0849 or (441) 295-5688
          Homepage: http://www.legioninsurance.com
          Contacts:
          Angus H. Ayliffe, Chief Financial Officer
          Fran Tucker, Investor Relations



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

AES CORP.: Forecasts $125M Net Income This Year From LatAm Units
----------------------------------------------------------------
AES Corp. said it received only about US$1 million net income
from its Latin American subsidiaries in the first quarter,
accounting for less than 1% of the US Power company's US$180-
million income from subsidiaries, relates Business News Americas.

However, in a supplementary information to its first quarter
results, AES said it expects to get US$125 million net income
from the Latin American subsidiaries by year-end.

AES expects to receive US$30 million from Chilean subsidiary AES
Gener, US$30 million from Argentina's Alicura, US$30 million from
Puerto Rico, US$20 million from Brazilian thermo plant
Uruguaiana, and US$15 million from other income.

"The rest is very minimal, we expect nothing else from Brazil, or
Argentina," CEO Paul Hanrahan said during a conference call to
discuss first quarter results.


ELETROPAULO METROPOLITANA: AES Expects Debt Solution In Weeks
-------------------------------------------------------------
AES Corp. expects to resolve defaults by Brazilian units within
weeks, Bloomberg reports, citing restructuring chief Joseph
Brandt.

Units of the Company have defaulted on US$1.2 billion in debt of
Eletropaulo Metropolitana SA, Sao Paulo's power distributor. The
units' biggest creditor, state development bank BNDES, revealed
plans Thursday to auction AES unit securities that back the debt.

"They also made the fairly significant statement that they're not
looking to resolve the dispute with AES in a matter that leads to
the sale," Brandt said. "This is a signal to AES that they'd like
the negotiations to conclude sooner rather than later. That's
very encouraging."

BNDES may be in position to auction the stock within a few weeks,
which pressures both sides to agree, Brandt said.

AES has written off most of its investment in Brazil and would be
in a stronger financial position by relinquishing ownership of
Eletropaulo, the Company has 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


SABESP: Working Toward $300M Bond Sale
--------------------------------------
Brazil water utility Cia. de Saneamento Basico do Estado de Sao
Paulo wants to sell US$300 million of reais or dollar bonds to
take advantage of renewed investor demand, Bloomberg reports,
citing Valor Economico.

The utility, Latin America's biggest water utility, is looking to
sell bonds to refinance debt maturing this year. A previous
report by the TCR-LA revealed that Sabesp has about BRL1.3
billion ($1=BRL3.37) of debt coming due this year, US$200 million
of which comes due in July.

Recently, credit rating agency Standard & Poor's revised Sabesp's
outlook to stable from negative. The action reflects the revision
of the outlooks on Brazil's B+/B foreign currency and BB/B local
currency credit ratings to stable from negative, which in turn
reflects recent progress and prospects for a further
strengthening of Brazil's fiscal position, and President Luiz
Inacio Lula da Silva and his administration's demonstrated
commitment to stabilize government debt.

Sabesp is Brazil's largest water utility in terms of users,
serving 366 of Sao Paulo state's 645 municipalities, providing
water to 25 million residents.

CONTACT:    Sabesp
            Helmut Bossert,(5511) 3388-8664
            hbossert@sabesp.com.br

            Marisa Guimaraes, (5511) 3388-9135
            marisag@sabesp.com.br
            Website: www.sabesp.com.br


TELEMAR: Posts Unaudited 1Q03 Consolidated Results
--------------------------------------------------

Highlights of Consolidated Results

Gross revenues totaled R$ 4,453 million, an increase of 18.5%
over 1Q02 and 2.3% over 4Q02. The major changes as compared with
4Q02 were data transmission (+23%), long-distance (+12%) and
advanced voice (+12%) services. Net revenues amounted to R$ 3,218
million, slightly (0.2%) below 4Q02 figures and 15.6% above 1Q02
levels.

The wireline plant in service comprised 15 million lines at the
end of 1Q03, a 1.4% increase over the past 12 months and 0.9%
below the plant in service at the end of 4Q02, while the wireless
plant in service reached 1.72 million subscribers, of which 78%
under prepaid and 22% under postpaid plans.

Wireless services ARPU (at Oi) stood at R$ 33, approximately 4.1%
above 4Q02 figures, while wireline services ARPU (at TMAR) was R$
67, about 2.2% above 4Q02.

Operating cash costs and expenses decreased by 11.4% as compared
to 4Q02, totaling R$ 1,743 million.

Provisions for doubtful accounts were equal to 3.2% of gross
revenues for the quarter, against 5.6% in the same period of 2002
and 2.8% in 4Q02.

Consolidated EBITDA amounted to R$ 1,476 million, with a 45.9%
margin (compared to 39.1% in 4Q02).

Net financial expenses totaled R$ 452 million, up 10.5% from
4Q02.
Consolidated net losses amounted to R$ 112 million, compared to
R$ 101 million in 4Q02.

Net debt reached R$ 10,005 million at the end of 1Q03, a 9.7%
increase over 4Q02 figures. Net debt balances were mainly
impacted by payments of interest on capital (R$ 688 million) and
settlement of the last portion relating to the acquisition of
Pegasus (R$ 161 million), accounted in other accounts payable on
Dec 31, 2002.

Capex totaled R$ 185 million, of which R$ 86 million were
allocated to TMAR and R$ 97 million to Oi.

ANALYSIS OF OPERATING PERFORMANCE

Wireline (TMAR)

The wireline plant installed - LI - reached 17.5 million lines at
the end of 1Q03, a 0.3% decrease from 4Q02, while the plant in
service - LIS - totaled 15.0 million lines, a 0.9% decrease as
compared to 4Q02 and a growth 1.4% on 1Q02. Commercial lines
increased by 4.3% as compared with the end of 1Q02.

The average plant in service totaled 15.1 million lines in 1Q03,
(-0.7% over 4Q02 and +1.6% as compared to 1Q02). Public phones
reached 715,000 units at the end of 1Q03 (unchanged from 4Q02).

During the quarter, 622,000 lines were activated and 758,000
disconnected and, at the end of 1Q03, approximately 986,000 lines
were blocked.

Of the total plant in service at the end of 1Q03, around 131,000
lines were allocated to ISDN (DVI) service, corresponding to
approximately 66,000 Internet accesses. In the same period, total
ADSL accesses in service reached 59,000 units, compared with
50,000 at the end of 4Q02. Chart 4 below shows the evolution of
broadband accesses in the period under review. Noteworthy is the
growth in Velox (ADSL) share in total accesses, from 15% in 1Q02
to 47% in 1Q03.

Wireless Oi

Oi has shown significant growth quarter-on-quarter, with 1.7
million customers at the end of 1Q03, being 78% under prepaid and
22% under postpaid plans. The average subscribers base in 1Q03
reached 1.5 million, an increase of approximately 79.9% as
compared to the previous quarter.

As a result of the greater focus on sales to companies during
this period, at the end of 1Q03, Oi reached 99,000 customers
under corporate plans (5.8% of the total base and 26.1% of the
postpaid base), a 65.0% growth as compared to the end of 4Q02. Oi
closed 1Q03 with an estimated market share in its region of 10.6%
(4Q02 - 8.9%).

Estimated penetration of mobile services in Oi's area of
operations stood at approximately 18.2% at the end of the quarter
(4Q02 - 17%).

At the end of 1Q03, Oi's coverage reached nearly 400 of the main
cities of 14 states in its region (all of them, except for
Roraima and Amap ), with 2,557 radio-base stations.

ANALYSIS OF CONSOLIDATED RESULTS

Consolidated Revenues

Gross revenues amounted to R$ 4,453 million, up 2.3% from 4Q02,
essentially due to the significant increase in data transmission
(+22.4%), and long-distance revenues (+11.9%), partially offset
by the reduction in consolidated wireless revenues (-31.3%), on
account of lower handset sales in the quarter. In comparison with
1Q02, the increase was 18.5%, mainly due to the increased local
and long-distance services revenues, as well as the start-up of
wireless operations.

In 1Q03, net revenues totaled R$ 3,218 million, 0.2% below 4Q02
figures, and 15.6% above 1Q02 levels. The difference between
gross and net revenues vary on account of the increase of ICMS
tax rates, implemented in the quarter, in certain states of the
region, including Rio de Janeiro - representing 31% of total
lines in service - where the rate went from 25% to 30%.

TMAR monthly average revenue per user (ARPU) reached R$ 67 in the
quarter, increasing by 2.2% and 7.4% over 4Q02 and 1Q02,
respectively.

WIRELINE SERVICES

- Local (monthly subscription, traffic, installation fees and
fixed-to-mobile) gross revenues amounted to R$ 2,592 million, a
10.5% and 2.5% increase over 1Q02 and 4Q02, respectively.

Following we highlight the performance of the main items:

- Monthly subscription charges amounted to R$ 1,233 million, up
2.1% and 14.9% from 4Q02 and 1Q02, respectively. The sequential
2.1% growth is exclusively due to the increase in the ICMS tax
rate in certain states of the region, in particular Rio de
Janeiro (from 25% to 30%). As compared to the same period in the
prior year, this growth is attributable to tariff adjustment of
June/02, as well as the increase in the average plant in service
(1.6%)

- Pulse-based traffic revenues reached R$ 593 million, a 0.7%
decrease from 4Q02, due to traffic reduction (2.8%) arising from
the fewer number of business days in the period. Compared to
1Q02, revenues went up by 19.3% due to the 5.0% increase in
traffic during the period, and the tariff adjustment of June/02.

- Installation fees totaled R$ 25 million, unchanged compared to
4Q02, and 42.8% below 1Q02. The decreased revenues as compared to
1Q02 stems basically from the tariff reduction implemented in
June/02.

- Local fixed-to-mobile calls (VC1) revenues reached R$ 711
million, up 6.9% from 4Q02 figures, basically on account of the
average tariff increase in February/03, partly offset by a 2.9%
traffic reduction in the period. Compared to 1Q02, the increase
stood at 1.2%, due to the above mentioned tariff adjustment (of
24.7%, on average), partly offset by the 11.8% drop in traffic.

= Long distance (intra and interregional, international and
fixed-to-mobile) revenues reached R$ 666 million, with 11.9% and
44.1% increases on figures reported for 4Q02 and 1Q02,
respectively.

The change over 4Q02 was due to the increase in the average
revenue per minute, as a consequence of lower promotions and
discounts in 1Q03, mainly in the intra regional service. The
continuous growth of the new services - interregional and
international - and the increase in the fixed-to-mobile revenue
(VC2 and VC3) due to the tariff increase of Feb/03 also
contributed to the sequential increase verified in the quarter.

When comparing to the same period last year, the revenue increase
(+44.1%) is explained by the above mentioned factors, in addition
to the market share gains and the tariff increase which took
place in 2002.

The revenues from the new long distance services - interregional
and international -
contributed with R$ 53 million and R$ 24 million respectively, in
the quarter.

= Network usage revenues totaled R$ 330 million, down 5.0% and
22.5% from 4Q02 and 1Q02, respectively. These revenues are
steadily decreasing mainly due to the Company's market share
gains in the long-distance segment, as well as the fact that the
other LD operators are installing additional points of presence
in Region I.

= Data transmission revenues totaled R$ 271 million, up 22.7%
from 4Q02, and 17.8% from 1Q02, driven by the consolidation of
revenues earned by Pegasus (acquired by TMAR in late December
2002), as well as the expansion in TMAR sales to corporations.

Data services, such as switching packages, frame relay and ADSL
are showing a consistent positive performance due to the
Company's focus on the offer to the corporate segment of
customized packages and of standardized products to the middle
market. However, the EILD - leased lines to other operators -
revenue has been negatively impacted by the stronger competition
and the fact that other LD and wireless operators are
constructing their own networks.

= Public telephone revenues totaled R$ 196 million, up 7.5% and
32.3% from 4Q02 and 1Q02, respectively.

The revenue growth compared to 4Q02 is primarily due to the
results from the implementation of anti-fraud measures, as well
as higher receivables from other telephone operators for the use,
within Telemar region, of cards purchased in other regions (R$ 11
million impact in 1Q03, of which approximately R$ 7 million have
a recurring effect). Compared to 1Q02, the increase is mainly
attributable to the incorporation in gross revenues (as from
2Q02) of discounts granted, the rate increase of June/02, and the
expanded use of Telemar's pick code on long-distance calls.

= Other services: revenues from "other services" amounted to R$
180 million, an 11.8% and 22.4% growth on 4Q02 and 1Q02,
respectively, arising mainly from: advanced voice services
(800/500/300) - revenues equal to R$ 61 million (up 11.9% from
4Q02); additional services (value added/directory queries/change
of address) - revenues of R$ 94 million (8.8% increase from
4Q02); and call center services provided by Contax, which booked
consolidated revenues of R$ 23.6 million (up 31.1% from 4Q02).

OI WIRELESS SERVICES

Consolidated gross wireless revenues reached R$ 219 million, a
31.3% reduction compared to 4Q02, due to the decrease in handset
sales (R$ 82 million against R$ 242 million in 4Q02), on account
of the seasonal profile (Christmas) of such sales.

Gross revenues at Oi, on a standalone basis, totaled R$ 314
million. The difference between this amount and the consolidated
amount reported as "wireless revenues" is primarily due to the
elimination of revenues arising from the use by TMAR of Oi's
mobile network (interconnection costs at TMAR / Network Usage
remuneration at Oi - R$ 62 million), in addition to long-distance
international and advanced voice (outside Region I) revenues of
R$ 30 million, classified as revenues from "fixed-line services"
(and not included in the calculation of Oi's ARPU).

Wireless services (excluding handset sales) revenues amounted to
R$ 202 million in
1Q03, a 88.5% increase compared to 4Q02, outperforming the
expansion in the average subscriber base in the period (79.9%).

In 1Q03, average revenue per user (ARPU) amounted to R$ 33,
approximately 4.1% above 4Q02 figures, reflecting the higher
service revenue growth over the average subscriber base during
the period.

OPERATING CASH COSTS AND EXPENSES

Consolidated operating costs and expenses (ex-depreciation and
amortization) amounted to R$ 1,743 million, a 11.4% decrease
compared to 4Q02 and a 29.0% increase compared to 1Q02.

The decrease relative to the previous quarter is mainly
attributable to materials expenses (-R$ 164 million), on account
of the lower level of Oi mobile handset sales, third-party
services (-R$ 69 million) and personnel expenses (-R$ 25
million).

The main drivers of the increase in consolidated expenses
compared to 1Q02, excluding the impact of Oi (R$ 235 million),
were expenses with third-party services at TMAR (R$ 121 million)
and interconnection fees (R$ 67 million), due to the increase in
TU-M during the period, partly offset by the reduction in the
provisions for doubtful accounts (R$ 69 million).

Interconnection costs totaled R$ 654 million, up 11.4% from 4Q02.
The increase is primarily due to the impact of the 22.0% average
increase in mobile interconnection rates (TU-M) in Telemar's
region, effective Feb/03.

Cost of services amounted to R$ 609 million, down approximately
27.3% from 4Q02 (R$ 229 million), essentially on account of the
seasonal effect of the year end, whose impact on this cost in the
quarter was a reduction of R$ 153 million (materials), among
other changes, including:

- Third-party services totaled R$ 249 million, a 13.8% decrease
compared to 4Q02. The consolidated reduction arises mainly from
lower plaint maintenance expenses, including energy.

- Materials amounted to R$ 124 million, down 55.2% (-R$ 153
million), from 4Q02, as a result of the decreased volume of
mobile handset sales, reflecting the lower growth in Oi's
customer base during the period.

- Rent costs amounted to R$ 101 million, a 33.6% reduction
compared to 4Q02. The decrease is primarily due to lower circuit
rental expenses at TMAR (IP, corporate services and DLD), on
account of the consolidation of Pegasus operations.

Selling expenses totaled R$ 313 million, a 12.6% decrease from
4Q02, as a result of lower marketing expenses (-R$ 47 million),
as described below:

- Third-party services amounted to R$ 102 million, down 8.9% from
4Q02, due to a more significant sales effort at Oi during the
4Q02 (dealer commissions in connection with handset sales and
logistics).

- Marketing expenses totaled R$ 16 million, decreasing by
approximately 74.6% compared to the previous quarter, as a result
of higher expenses incurred in 4Q02 to consolidate the Oi brand,
carry out customer loyalty programs and launch new wireless and
wireline DLD products, in addition to Christmas sales' effect.

- Bad Debt amounted to R$ 141 million, a 15.6% increase compared
to 4Q02, equal to 3.2% of gross revenues (4Q02 - 2.8%), as shown
in chart 7. Oi recorded the largest impact, with a R$ 12 million
increase in 1Q03 compared to 4Q02, primarily as a result of
subscription frauds perpetrated by customers who misrepresented
personal information. The Company took preventive measures, by
adjusting existing processes and implementing new, more effective
and stringent systems and processes designed to prevent further
frauds. This provision is equal to 4.5% of Oi gross revenues.

General and administrative expenses (G&A) amounted to R$ 192
million, down 25.0% from the previous quarter, when non-recurring
expenses were booked, as reported in connection with 4Q02
results. Additionally, administrative, legal and IT consulting
expenses decreased by R$ 16 million, and personnel expenses
decreased by R$ 11 million.

Other operating expenses (revenues): The Company recorded revenue
in the amount of R$ 25 million, 65.8% below 4Q02 figures, as a
result of the absence of certain TMAR revenues in 1Q03, such as
recovery of tax credits and other reversals (reported in the
prior quarter).

On the other hand, Oi recorded a non-recurring R$ 47 million
revenue in connection with bonuses granted by handset suppliers,
in the light of the outstanding operating performance of this
company since its inception and resulting high volume of handset
sales.

Personnel expenses (CSP, DECOM, G&A): these reached R$ 204
million, decreasing by R$ 25 million in this quarter, as a result
of the reduction in TMAR headcount in 4Q02, and one-off severance
expenses booked in the previous quarter:

CONSOLIDATED EBITDA

Consolidated earnings before financial expenses, taxes,
depreciation and amortization (EBITDA) reached R$ 1,476 million,
a 17.1% increase over 4Q02 figures. EBITDA margin stood at 45.9%
in 1Q03 (4Q02 - 39.1%).

Growth in the period arose from the reduction in virtually all
wireline expenses - except for interconnection costs. It was also
helped by an increase in revenues from wireless services, with a
reduction in handset subsidies, and the bonuses and discounts
granted to Oi during this quarter. Net deferred charges at Oi
totaled R$ 9.3 million, of which R$ 5.7 million relate to
subsidies in the sale of handsets with postpaid plans (with R$ 23
million accounted as expenses) and R$ 3.6 million relate to
customer activation fees - Fistel (with R$ 5 million accounted as
expenses).

EQUITY ACCOUNTING

Equity accounting amounted to R$ 45 million (4Q02 - R$ 19 million
loss). This result arose from the increase in TMAR shareholders'
equity, reflecting income generated and the formation of a
capital reserve related to tax incentives (exploitation income -
reduction in income tax rates) granted to the Company in the
North and Northeast regions, in connection with Brazil's regional
development programs.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization amounted to R$ 985 million, in line
with 4Q02. The R$ 16 million increase in 1Q03 in the "goodwill
amortization" line is primarily derived from TMAR acquisition of
Pegasus, in 4Q02.

CONSOLIDATED FINANCIAL RESULTS

In 1Q03, the Company posted net financial expenses in the amount
of R$ 452 million (4Q02 - R$ 409 million), mainly as a result of
higher interest rates (CDI-based) in the period.

     - Financial income totaled R$ 123 million, a R$ 48 million
increase over the previous quarter, essentially on account of the
rise in interest rates (CDI) to 25.6% p.a., on average in 1Q03
(4Q02 - 21.1% p.a.).

     - Financial expenses totaled R$ 575 million, increasing by
approximately R$ 91 million compared with the prior quarter
(18,8%). This growth was essentially due to:

= Interest on loans amounting to R$ 189 million, up R$ 8 million
from 4Q02.

= PIS, Cofins and IOF charges amounting to R$ 31 million, down R$
85 million from the prior quarter, as a result of a provision for
IOF established in 4Q02 (R$ 125 million), in addition to
incidence of PIS/COFINS, also in 4Q02, on revenues from interest
on capital.

= Monetary and exchange variations on loans and financing. The R$
429 million revenues arising from Brazilian currency appreciation
were more than offset by higher expenses with currency swap
transactions. These expenses, net of R$ 67 million gains on call
spread option contractual maturities, totaled R$ 578 million in
the quarter. Such expenses include CDI costs on swap transactions
in the amount of R$ 374 million (4Q02 - R$ 280 million).

NET RESULT

The Company posted a net consolidated loss in the amount of R$
112 million (R$ 0.30 per thousand shares) compared to a net loss
of R$ 101 million in 4Q02 (R$ 0.27 per thousand shares).

TMAR recorded a net income of R$ 252 million, down by
approximately 49.7% from 4Q02, as a result of the appropriation
in 1Q03 of income tax and social contribution payable in the
amount of R$ 144 million (against a reversal of R$ 163 million in
the prior quarter, on account of the tax benefit arising from the
declaration of interest on own capital in the amount of R$ 850
million).

Oi recorded a net loss for the quarter in the amount of R$ 354
million, down by approximately 6.2% from 4Q02, reflecting
improved operating margins, partly offset by increased financial
expenses during the period.

ANALYSIS OF MAIN CHANGES IN BALANCE SHEET

ACCOUNTS RECEIVABLE

At the end of March, the consolidated balance of accounts
receivable (net of R$ 323 million in connection with the
provision for doubtful accounts) stood at R$ 3,112 million, a
14.2% increase on 4Q02. This growth arises from TMAR, whose
accounts receivable increased by 16.3% (R$ 410 million) over 4Q02
figures, due to increased sales, as well as increased cobilling
with other telephone operators, besides the changes in the
billing statements, which provoked a punctual postponement of two
billing cycles, that should be normalized in the next period.

DEBT/SUPPLIERS/OTHER ACCOUNTS PAYABLE

At the end of 1Q03, the Company's total debt amounted to R$
11,616 million, of which 70.7% was denominated in foreign
currency (96.4% hedged) and 29.3% in local currency.
Approximately 17.7% of total debt, or R$ 2,053 million, matures
until Mar/04. The cash and financial investment position at the
end of the quarter (R$ 1,611 million) are equal to 78.5% of the
debt repayable over the next 12 months,

At the end of the quarter, net consolidated debt reached R$
10,005 million, up 9.7% from 4Q02. The increase in net debt is
primarily due to the payment, during this quarter, of interest on
capital in the amount of R$ 688 million (including taxes), as
well as the settlement of the final portion of the purchase price
of Pegasus (R$ 161 million).

Of total maturities in 2003, equal to R$ 1,278 million, some R$
323 million will be repaid in 2Q03.

At the end of March/03, local currency debt totaled R$ 3,402
million (including debentures), at a cost of about 20.1% p.a. on
average, calculated based on a CDI rate of 26.5% p.a..

Foreign currency debt, in the amount of R$ 8,214 million - net of
swap gains of R$ 664 million - bear the following interest rates,
on average: Libor + 5% p.a. for U.S.dollar transactions, 1.5%
p.a. for Japanese yen transactions, and 12.3% for a basket of
currencies (BNDES). As of March/03, approximately 96.4% of all
foreign currency loans were hedged, of which 90.6% by means of
exchange swap transactions, and 5.8% through financial
investments linked to the exchange variation. Nearly 87% of the
exchange swap agreements cover the respective contract periods up
to their maturity.

Exchange swap transactions transfer foreign exchange fluctuation
risk to CDI variation. At the end of the quarter, such
transactions were remunerated on average at 100.6% of CDI. During
1Q03, total funds raised amounted to R$ 1,206 million, broken
down as follows: R$ 884 million from Japanese bank JBIC, to
finance TMAR's equipment purchases, and R$ 166 million drawn down
from the credit facility to finance Oi's investment program and
working capital.

The "suppliers" account balances at the end of 1Q03 stood at R$
1,188 million, a reduction by R$ 447 million compared to year-end
2002 figures, as a result, among other things, of the transfer to
"loans and financing" accounts in the quarter, of R$ 152 million
at TMAR and R$ 138 million at Oi, besides the cash payment to
suppliers, at TMAR, of other contractual obligations.

"Other accounts payable" balances of R$ 271 million at the end of
1Q03 represent a reduction of R$ 110 million compared to year end
2002 balances, primarily due to the payment by TMAR of a portion
of the purchase price of Pegasus (R$ 161 million, net of TNE
receipts).

INTERCOMPANY LOANS

Intercompany loans are carried under normal market condictions,
and loans and monies due to TNE holding company are remunerated
at actual funding costs. The increase in TNE loans to TMAR was
due to TMAR cash requirements for the initial interest on capital
payments (R$ 714 million), settlement of the Pegasus purchase
control acquisition (R$ 208 million), and prepayment, at a
discount, of amounts due to Pegasus suppliers (R$ 235 million).

Oi also had to borrow funds from TNE to pay interest on its
foreign currency debt (R$ 60 million), in addition to other
financial charges (R$ 130 million) and the payment of insurance
premia and financial costs related to the loan contracted in
December 2002 with the banks Societé Generale, KFW and NIB -
Nordic Investment Bank (R$ 127 million).

CAPITAL EXPENDITURES

Total Capex amounted to R$ 185 million in the quarter, of which
R$ 86 million was directed to TMAR (network quality improvement
and data transmission), and R$ 97 million to Oi (increase in
coverage).

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

          Carlos Lacerda
          carlosl@telemar.com.br
          55 21 3131 1314

          Fax: 55 21 3131 1155

          GLOBAL CONSULTING GROUP
          Rick Huber, richard.huber@tfn.com
          Mariana Crespo, mariana.crespo@tfn.com

          Tel: 1 212 807 5026
          Fax: 1 212 807 5025


VESPER: Lays Off Workers After Parent Reveals Sale Plans
--------------------------------------------------------
Vesper SA, Brazil's fourth-largest telephone company, on Thursday
fired 240 employees, or 20% of its total workforce of 1,200
employees. The move came after Vesper's controlling shareholder,
US-based CDMA chipset developer Qualcomm, revealed that it will
sell its 86% stake in Vesper after Brazil's telecommunications
regulators denied a request to use the same frequency for mobile
and fixed-line services. Vesper invested US$2.5 billion in Brazil
and expected to cut costs by using its fixed-line network for
wireless services this year.

Qualcomm has contracted Morgan Stanley to coordinate the sale,
but Vesper CEO Luiz Kaufmann indicated last week that it may be
hard to find a buyer, and the company may be forced to shut down
operations.

CONTACT:  Julie Cunningham, Sr. Vice President
          Investor Relations of QUALCOMM
          Tel: +1-858-658-4224
          Fax: +1-858-651-9303
          Email: juliec@qualcomm.com



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

GUACOLDA: S&P Affirms Corporate Credit Rating
---------------------------------------------
Standard & Poor's Ratings Services said Friday that it affirmed
its 'BBB-' corporate credit rating on Chilean power generator
Empresa Electrica Guacolda S.A. (Guacolda), and removed the
rating from CreditWatch with negative implications.

The outlook is stable. The rating was originally placed on
CreditWatch April 3, 2003 due to high refinancing risk.

The rating action follows the company's announcement that it has
successfully placed US$150 million in senior amortizing secured
loan participation certificates with final maturity in 2013.
Proceeds were mainly applied to refinance its US$87 million net
debt maturities on April 30, 2003 and to prepay its US$48.8
outstanding debt with Mitsubishi Corp.

"The new US$150 million facility significantly reduces Guacolda's
refinancing risk and leaves a debt structure much more in
accordance with the company's cash flow projections," said
Standard & Poor's credit analyst Sergio Fuentes.

"Although cash reserves are low, Guacolda does not face important
capital expenditures nor large capital amortizations in the next
two to three years," added Mr. Fuentes.

The company has been applying excess cash flows to debt reduction
in recent years as evidenced by the fact that total financial
debt has decreased to US$192 million as of December 2002 from
US$215 million as of December 2001. However, Guacolda's leverage
remains at high levels (62.9% as of December 2002), mainly as a
result of the continuing devaluation of the Chilean peso.

Guacolda is a 304 MW coal-fired power generator located in the
northern region of Chile's Central Interconnected System.
Complete ratings information is available to subscribers of
RatingsDirect, Standard & Poor's Web-based credit analysis
system, at www.ratingsdirect.com. All ratings affected by this
rating action can be found on Standard & Poor's public Web site
at www.standardandpoors.com; under Fixed Income in the left
navigation bar, select Credit Ratings Actions.



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

AVIANCA: Files Official Response To Willis' Motion
--------------------------------------------------
COME NOW Aerovias Nacionales De Colombia S.A. Avianca and
Avianca, Inc., as debtor and debtor in possession herein
(collective ly referred to as "Avianca" or the "Debtors"), and
files this, their Response to Motion of Willis Lease Finance
Corporation and Willis Engine Funding LLC for Entry of an Order
to Require Debtors to Provide Adequate Protection Pursuant to 11
U.S.C.  361 and 363(e) or, in the Alternative, Terminating the
Automatic Stay Pursuant to 11 U.S.C.  362(d), and respectfully
show the Court as follows:

1. As more fully set forth herein, Movants are adequately
protected because: (i) the Debtors are presently, and shall
remain, in compliance with the provisions of the Engine Leases
concerning operation, maintenance, repair and use of the Engine
Equipment; (ii) pursuant to section 365(d)(10) of the Bankruptcy
Code, Movants are not entitled to immediate payment of its fees
and expenses and cash/maintenance use reserves; and (iii) the
Debtors are presently, and shall remain, in compliance with the
requirements and regulations issued under the Federal Aviation
Act and all other applicable laws. Moreover, Movants are not
entitled to relief from the automatic stay.

INTRODUCTION
2. On March 21, 2003 (the "Petition Date"), the Debtors filed
with this Court voluntary petitions for relief pursuant to
chapter 11 of Title 11, United States Code (the "Bankruptcy
Code").

3. The Debtors have continued in possession and control of their
properties and businesses, which they currently operate as
debtors in possession pursuant to sections 1107 and 1108 of the
Bankruptcy Code. On March 21, 2003, this Court entered its Order
Authorizing Joint Administration, allowing joint administration
and consolidation of the Debtors' bankruptcy cases for procedural
purposes only. An Official Committee of Unsecured Creditors has
been appointed in these cases.

4. On April 17, 2003, Willis Lease Finance Corporation and Willis
Engine Funding LLC (collectively referred to as the "Movants")
filed their Motion of Willis Lease Finance Corporation and Willis
Engine Funding LLC for Entry of an Order to Require Debtors to
Provide Adequate Protection Pursuant to 11 U.S.C.  361 and
363(e) or, in the Alternative, Terminating the Automatic Stay
Pursuant to 11 U.S.C.  362(d) (the "Motion"). In the Motion,
Movants seek adequate protection in the form of (i) immediate
compliance with the provisions of the Engine Leases concerning
operation, maintenance, repair and use of the Engine Equipment; 1
Movants assert that they are the beneficial owner of four (4)
owner trusts, which lease four (4) aircraft engines to the
Debtors. (ii) immediate payment of cash/maintenance use reserves;
(iii), immediate payment of all fees and expenses due and to be
due under the Engine Leases, including, but not limited to all
prepetition indebtedness; and (iv) compliance with the
requirements and regulations issued under the Federal Aviation
Act and all other applicable laws. In the alternative, Movants
seek relief from the automatic stay pursuant to section 362(d) of
the Bankruptcy Code.

BACKGROUND
5. Aerovias Nacionales De Colombia S.A. Avianca ("Avianca S.A.
"), sometimes referred to as the "Airline of Colombia" and the
"First Airline in America," is a corporation organized under the
laws of the Republic of Colombia as a sociedad anomina, with its
administrative offices located at Centro Administrativo, Avenida
Eldorado No. 92-30, Bogot , Colombia, and its principal place of
business in the United States located at 720 5th Avenue, 5th
Floor, New York, New York 10019-4107.

6. The Debtor is the oldest airline in the Western Hemisphere.
The company operates a domestic (Colombian) and international
airline passenger business, but it also carries cargo (mail and
freight) on its domestic and international routes.

7. Avianca S.A. does not hold an air carrier operating
certificate issued pursuant to chapter 447 of title 49, United
States Code, for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo.

8. Avianca, Inc. is a corporation organized under the laws of the
State of New York, with its principal place of business located
at 8125 Northeast 53rd Street, Suite 1111, Miami, Florida 33166.
Avianca, Inc. acts as Avianca S.A.'s general agent in connection
with its activities in the United States pursuant to a general
agency agreement which provides for 2 The Engine Equipment
consists of three Pratt & Whitney manufactured JT8D-219 aircraft
engines bearing serial number 718035, 718064 and 718619 and
one(1) Pratt & Whitney manufactured PW 4060 aircraft engine
bearing serial number 724396. Avianca, Inc., in its capacity as
general agent for Avianca S.A., to market and sell tickets for
air travel, to lease facilities for its operations in the United
States, to procure supplies, to collect accounts, to purchase
parts, and to provide other services in connection with the
business of operating an international commercial airline in the
United States.

9. Avianca Inc. does not hold an air carrier operating
certificate issued pursuant to chapter 447 of title 49, United
States Code, for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo.

10. The provisions of several of Avianca's leases and contracts
require that Avianca submit to the jurisdiction of the state and
federal courts located in New York.

11. Since the commencement of these chapter 11 cases, all the
line maintenance tasks related to the Engine Equipment for all
fleets have been performed by the Debtors, such as engine
preinstallation and line maintenance corrective actions, and all
the task cards in accordance with the applicable Federal Aviation
Administration ("FAA") approved maintenance program (the "FAA
Maintenance Program"). In fact, the JT8D-219 engine, serial
number 718064, is not in service and will be undergoing extensive
maintenance for approximately sixty (60) days pursuant to the
requirements set forth in the Engine Leases and pursuant to the
FAA Maintenance Program. Another JT8D-219 engine, serial number
718169, recently underwent extensive maintenance pursuant to the
requirements set forth in the Engine Leases and the FAA
Maintenance Program and recently was placed back into service.

12. The Engine Equipment has been and continues to be maintained
in accordance with the Debtors' customary maintenance practices
in place prior to March 21, 2003, without deviation. The Engine
Equipment has been and continues to be maintained in the same
manner and to the same standards as other engines of the same
type in the Debtors' fleet and have not been and will not be
discriminated against in respect of maintenance services.

13. All of the Engine Equipment is insured by the Debtors. The
Debtors also maintain proper records regarding the use and
maintenance of the Engine Equipment and comply with all FAA and
other national and international regulations with respect to the
use and maintenance of the Engine Equipment.

14. The "maintenance reserves" or "supplemental rent" set forth
in the Equipment Leases (the "Maintenance Reserves") and
calculated based upon the hours and/or cycles of use of the
Engine Equipment relative to the next required maintenance event,
are payable in arrears on either the tenth (10th) day of each
calendar month with respect to the PW 4060 aircraft engine, or on
the twenty- fourth (24th) day of each month with regard to the
three (3) JT8D-219 aircraft engines.

15. The Debtors expect to generate sufficient cash post-petition
from their ongoing business operations to assure the Movants of
prompt and continued payment of all obligations under the Engine
Leases. Furthermore, the Debtors have a $18,500,000 (exclusive of
fees and interest) debtor in possession loan facility that will
facilitate payment under the Engine Leases.

MOVANTS ARE ADEQUATELY PROTECTED
16. As noted above, neither Avianca S.A. nor Avianca, Inc. holds
an air carrier operating certificate issued pursuant to chapter
447 of title 49, United States Code, for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of cargo.
Pursuant to section 1110(a)(3) of the Bankruptcy Code, only such
equipment (as defined in 49 U.S.C.  40102) that is leased to a
debtor who holds an air carrier operating certificate issued
pursuant to chapter 447 of title 49, United States Code is
subject to the provisions of such section. Accordingly, section
1110 is not applicable and affords no protection to the Movants.

17. Instead, the subject Engine Leases are governed by section
365(d)(10) of the Bankruptcy Code. Section 365(d)(10) was added
to the Bankruptcy Code on October 22, 1994, as part of the
Bankruptcy Reform Act of 1994, Pub. L. No. 103-394 Stat. 4106
(1994) (the "Act"). Pursuant to section 365(d)(10) of the
Bankruptcy Code, until an unexpired lease of personal property is
assumed or rejected, a debtor in possession must timely perform
all of its obligations arising under the lease that first arise
from or after sixty (60) days after a chapter 11 case is filed.
"Congress adopted [section 365(d)(10)] to `shift to the debtor
the burden of bringing a motion [to assume or reject the lease]
while allowing the debtor sufficient breathing room after the
bankruptcy petition to make an informed decision.'" In re Elder-
Beerman Stores, Corp., 201 B.R. 759, 763 (Bankr. S.D. Ohio 1996).
It was thus the clear intent of Congress to grant debtors, such
as Avianca, a sixty (60) day "breathing" period to determine
whether to assume or reject its personal property leases.

18. Further, the sixty (60) day post-petition period set forth by
Congress has not terminated. Accordingly, the Debtors should be
granted the full measure of time provided by section 365(d)(10)
to determine whether the Engine Equipment is necessary to their
reorganizations and, thus, whether they should assume or reject
the Engine Leases. The Movants have not cited, and the Debtors
are unaware of, any case wherein the Court required a debtor to
provide additional adequate protection to a creditor within the
first sixty (60) days after the petition date.

19. Movants are not entitled to additional adequate protection
pursuant to section 363(e) of the Bankruptcy Code, which provides
that a court shall "prohibit or condition the use, sale or lease"
of personal property as is appropriate. The Debtors have provided
adequate protection to the Movants by insuring the Engine
Equipment and by performing all the line maintenance tasks
related with the Engine Equipment. "Adequate protection is not
meant to be a guaranty that the creditor will be paid in full.
Instead, the Court must determine whether the [Movants']
interests are protected as nearly as possible against the
possible risks to that interest." In re Ernst Home Center, Inc.,
209 B.R. 955, 967 (Bankr. W.D. Wash. 1997) (addressing adequate
protection of a real property lessor).

20. The Debtors expect to generate sufficient cash post-petition
from their ongoing business operations to assure the Movants of
prompt and continued payment under the Engine Leases, with such
obligations first becoming due and owing from or after the
sixtieth (60th) day after the petition date and continuing
through the date that the Engine Leases are either assumed or
rejected. Furthermore, the Debtors have a $18,500,000 (exclusive
of fees and interest) debtor in possession loan facility that
will facilitate the Debtors' payment of amounts due under the
Engine Leases on a post-petition basis first becoming due and
owing from or after the sixtieth (60th) day post-petition.

21. With the debtor in possession loan facility, the Debtors will
have sufficient funds to pay postpetition amounts due to under
the Engine Leases in the ordinary course of business until such
Engine Leases are either assumed or rejected pursuant to section
365 of the
Bankruptcy Code.

22. As further noted, the Debtors have continued to perform all
the line maintenance tasks related with the Engine Equipment,
such as engine preinstallation and line maintenance corrective
actions, and all the task cards in accordance with the FAA
Maintenance Program. Moreover, all of the Engine Equipment is
insured by the Debtors and the Debtors maintain proper records
regarding the use and maintenance of the Engine Equipment and
comply with all FAA and other national and international
regulations with respect to the use and maintenance of the Engine
Equipment. The Engine Equipment has been and continues to be
maintained in accordance with the Debtors' customary maintenance
practices in place prior to March 21, 2003, without deviation and
in the same manner and to the same standards as other engines of
the same type in the Debtors' fleet and have not been and will
not be discriminated against in respect of maintenance services.

23. Finally, the two cases cited by Movants to support its
contention that they are entitled to immediate compliance with
the lease payment obligations do not support such a conclusion.
First, the lease in In re Dabney, 45 B.R. 312 (Bankr. E.D. Pa.
1985) related to residential real property and, therefore, the
court's holding is of no moment to the present action. Further,
the decision in Dabney predates the 1994 Amendments to the
Bankruptcy Code, which added sections 365(d)(10) and 363(e).
Accordingly, the court in Dabney did not address the issues
presented to this Court.

24. The second case, Republic Technologies Int'l, LLC, 267 B.R.
548 (Bankr. N.D. Ohio 2001), is factually distinguishable. First,
Republic Technologies did not address adequate protection under
section 363(e), rather, the court addressed whether it should
exercise its equitable powers and require the debtor to make
certain lease payments not otherwise due and owing. The court
declined to do so.

25. Of more significance to the issues presented the Court
herein, the court also noted, in dicta, that adequate protection
under the leases pursuant to section 361 was not warranted
because the equipment in issue was insured by the debtors
therein. Id. at 555 n. 3 ("[The creditor] has adequate protection
due to the Debtors insuring its leased property"). Likewise, the
Engine Equipment is insured by the Debtors.

26. Payment under the Engine Leases is not yet due. The Debtors
have continued to perform all the line maintenance tasks related
with the Engine Equipment, such as engine preinstallation and
line maintenance corrective actions, and all the task cards in
accordance with the FAA Maintenance Program. All of the Engine
Equipment is insured by the Debtors and the Debtors maintain
proper records regarding the use and maintenance of the Engine
Equipment and comply with all FAA and other national and
international regulations with respect to the use and maintenance
of the Engine Equipment. The Debtors expect to generate
sufficient cash postpetition from their ongoing business
operations to assure the Movants of prompt and continued payment
under the Engine Leases, with such obligations first becoming due
from or after the sixtieth (60th) day after the petition date and
continuing through the date that the Engine Leases are either
assumed or rejected. The Debtors also have a $18,500,000
(exclusive of fees and interest) debtor in possession loan
facility that will facilitate the Debtors' payment of amounts due
under the Engine Leases on a post-petitio n basis first becoming
due and owing from or after the sixtieth (60th) day post-
petition.

27. Movants argue that adequate protection should be provided
retroactively to the Petition Date. Although the Debtors contend
that Movants have been adequately protected since the Petition
Date, section 363(e) authorizes a court to provide adequate
protection only upon motion and only prospectively form the time
such protection is sought. See In re Best Products Co., Inc., 138
B.R 155, 157 (Bankr. S.D.N.Y. 1992). Movants filed the Motion on
April 17, 2003 (the "Motion Date").

28. Payment of the Maintenance Reserves obligations will first
become due and owing (i) on June 10, 2003, with respect to the PW
4060 aircraft engine, which will cover the period May 1, 2003
through May 31, 2003, and (ii) on May 24, 2003, with respect to
the three
(3) JT8D-219 aircraft engines, which will cover the period April
14, 2003 through May 13, 2003. Pursuant to section 365(d)(10) of
the Bankruptcy Code, the "obligations" of the Debtors under the
Equipment Leases will first become due on or after May 20, 2003.
Movants will receive additional adequate protection in the form
of retroactive payment of Maintenance Reserves under the
Equipment Leases, which will cover almost the entire period from
the Motion Date through the sixtieth (60th) day following the
Petition Date. Therefore, at least with respect to the three (3)
JT8D-219 aircraft engines, Movants will receive 100% of the
Maintenance Reserves attributable to the period after the Motion
seeking adequate protection was filed. With respect to the PW
4060 aircraft engine, the Debtors will likewise pay the
Maintenance Reserves for the post-Motion period commencing on May
1, 2003. Debtors thus will receive payment of nearly 100% of the
Maintenance Reserves attributable to the period commencing on the
date that the Movants filed the Motion.

29. Movants argue that the Debtors should be required to "cure"
all prepetition arrears as part of its adequate protection.
Nothing in section 365(d)(10) authorizes the payment of
prepetition indebtedness due and owing. The "obligations"
addressed by such Code section only speak to "obligations" first
becoming due from or after the sixtieth (60th) day after the
petition date. Only upon assumption of an executory agreement
will a cure of prepetition arrearages be required. Accordingly,
Movants are not entitled to payment of their prepetition claim
pursuant to sections 365(d)(10) or any other applicable
Bankruptcy Code section for purposes of adequate protection.

30. For the foregoing reasons, the Movants are adequately
protected and are not entitled to additional adequate protection.
Accordingly, the Court should enter an Order denying the relief
sought in the Motion.

MOVANTS ARE NOT ENTITLED TO RELIEF FROM THE AUTOMATIC STAY
31. As set forth above, the Movants' interests in the Engine
Equipment is adequately protected. Therefore, Movants are not
entitled to relief from the automatic stay.

32. Moreover, section 363(e) provides the exclusive remedy
available to the Movants. Such section precludes relief from
stay. L. King, 3 Collier on Bankruptcy  363.05[4], 363-41
(citing the Act); see also, Kathryn Hoff-Patrinos, Aviation
Finance Revisited: The 1994 Amendments to section 1110 of the
Bankruptcy Code, 69 Am. Bankr. L.J. 167, 200 (1995) ("[U]nder the
1994 Amendments, the lifting of the automatic stay is not
available for lessors for a failure to provide adequate
protection.").

33. Accordingly, the Court should deny the Motion to the extent
that Movants seek relief from the automatic stay.

WHEREFORE the Debtors respectfully request that the Court enter
an Order denying the Motion and for other and further relief as
is just and proper.

Dated: Atlanta, Georgia
April 28, 2003
Respectfully submitted,
/s/ Brian P. Hall
Ronald E. Barab (RB4876)
Brian P. Hall (BH5060)

Of Counsel:

SMITH, GAMBRELL & RUSSELL, LLP
Suite 3100, Promenade II
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
(404) 815-3500

Of Counsel:

ANDERSON, KILL & OLICK, P.C.
1251 Avenue of the Americas
New York, New York 10020
(212) 278-1000

Attorneys for the Debtors


AVIANCA: Willis Replies To Opposition To Motion
-----------------------------------------------
Willis Lease Finance Corporation and Willis Engine Funding LLC
(collectively, "Willis") submits this reply to Avianca's response
in opposition to Willis' motion for adequate protection pursuant
to  361 and 363(e) of the Bankruptcy Code or, in the
alternative, for relief from the automatic stay pursuant to 
362(d) of the Bankruptcy Code.

SUMMARY

1. Aircraft and engines are peculiar types of capital equipment
because they are extremely costly, move quickly, and can be
damaged incalculably in an instant. Even more so than airframes,
engines can sustain damage worth a substantial portion of the
value of the equipment through common occurrences, such as an
engine failure or tools left in the engine.

2. Over the last generation, bankruptcy courts have had no
occasion for dealing with aircraft equipment because Section 1110
prescribes the course of dealing. Indeed, the peculiar treatment
of aircraft equipment predates even the adoption of the
Bankruptcy Code in 1978 because aircraft had their own special
provisions in former Chapter X.

3. The fact remains, an aircraft engine can be nearly destroyed
in an instant. If the airline/debtor can walk away from a damaged
engine by rejecting the lease, the engine lessor will sustain
enormous financial loss. An engine lessor like Willis is thus
entitled to nothing short of the protection afforded a lessor to
a domestic airline under Section 1110. To protect Willis, the
Court should require Avianca to cure all defaults and assume the
leases. Short of assumption, Willis is entitled to a direction
that Avianca immediately pay all sums at the rate provided for in
the leases from the date of filing forward; plus, as some degree
of "adequate protection" payments, Avianca should pay an amount
equal to prepetition arrears. If Avianca fails to make any
payment, the stay should be vacated entirely as to Willis.

AVIANCA'S ADMISSIONS AND CONCESSIONS
4. Avianca does not contest the following which are set forth in
Willis' Motion:

a. Avianca ceased paying Willis under the Engine Leases on or
about February 27, 2003;

b. Avianca has not paid a single dollar to Willis since these
cases began on March 21, 2003, for rent or maintenance/use
reserves under the Engine Leases;

c. The Engines are being used by Avianca in revenue producing
service and each hour and/or cycle of use of the Engine Equipment
diminishes its value due to wear and tear;

d. The value of the Engine Equipment further declines with use
because the value of the equipment is based on a maintenance
schedule measured by hours and/or cycles of use and "life limited
parts" become obsolete and must be replaced based on hours and/or
cycles of use;

e. The Willis Engines are important to Avianca because they
enable the fleet to fly without interruption otherwise caused by
routine engine repair and maintenance;

f. The Engine Equipment is susceptible to claims of Colombian
creditors who are outside the jurisdiction of this Court; and

g. Avianca intends to use the Engines during the case and then at
some point return them to Willis with significant deferred
maintenance obligations and in a depreciated state.

5. While admitting these critical points, Avianca fails to
address them in any measurable way by means of adequate
protection. Avianca, therefore, fails to meet its burden to prove
that Willis' interests in the Engine Equipment are adequately
protected, under Section 363(o)(1) of the Bankruptcy Code.

AVIANCA FAILS TO PROVIDE WILLIS WITH ADEQUATE PROTECTION
6. Not one dollar of rent or reserves have been paid to Willis
for Avianca's use of the Engine Equipment since February 2003.
Indeed, the Engine Leases were in significant payment default
when the chapter 11 cases were filed.

7. Avianca nonetheless tries to claim that Willis is adequately
protected. Yet, Avianca declines to pay Willis in full for all
monthly post-petition rent and maintenance/use reserves due under
the Engine Leases. Likewise, Avianca refuses to pay and cure the
existing pre- and post-petition defaults due for rent and
maintenance/use reserves under the Engine Leases.

8. The only "protection" now offered by Avianca essentially is
(a) the continuation of Avianca's FAA approved line maintenance
program and compliance with the FAA and other applicable laws,
and (b) the prospective possibility that after May 20, 2003,
Avianca might then honor Section 365(d)(10), which it is already
required to do, as to some of the Engines. However, Avianca
leaves itself the option of returning the Engines months or more
down the road, perhaps when one of the Engines is damaged or
requires significant maintenance. In that event, Willis would be
saddled with millions of dollars in damages.

9. The bare promise to pay rent (but not indefinitely) does not
constitute adequate protection. See In re Trombley, 34 B.R. 141,
144 (Bankr. D. Vt. 1983) ("bare promises" of future payment did
not constitute adequate protection). Adequate protection with
respect to a lease for personal property requires actual and
immediate compliance with the payments and all terms of the
leases. In re Republic Technologies, Int'l, LLC, 267 B.R. at 554;
In re Dabney, 45 B.R. 312, 314 (Bankr. E.D. Pa. 1985) ("in order
to provide adequate protection to the lessor, the debtor must pay
the lessor the rental amounts provided for in the lease").

10. Willis' engines, unlike typical personal property, are
extremely expensive pieces of heavy equipment susceptible to
catastrophic damage and loss. Avianca does not deny that the
value of the Engine Equipment is diminished by each hour and
cycle of use. The mere continuation of Avianca's customary on-
wing line maintenance programs is not nearly enough. This only
means that Avianca will maintain the engines in accordance with
its programs while the engine is installed on an airframe. The
significant monthly reserves and use fees owed under the Engine
Leases cover the more substantial costs of off-wing repair work
for wear and tear, performance deterioration, as well as
replacement of "life limited parts."

11. Willis is at great risk if there is damage to an engine,
which happens all the time. For example, if a tire shreds and
pieces are ingested into the engine on an MD83, several million
dollars in damage can occur in seconds. Without assurance that
Avianca will spend millions of dollars to repair the engine,
Avianca can simply reject the lease, and the loss would fall on
Willis' shoulders.

12. "Section 363(e) is not permissive or discretionary -- it
states that the court `shall' grant the relief specified, at any
time, on request of the secured entity." In re Metromedia Fiber
Network Servs., 290 B.R. 487 (Bankr. S.D.N.Y. 2003) (citing In re
Heatron, Inc., 6 B.R. 493, 494 (Bankr. W.D. Mo. 1980); 3 Collier
on Bankruptcy,  363.05[3], at 363-39; 3 Norton Bankr. L. & Prac.
2d  37:2).

13. Moreover, in this district adequate protection relief
protects the creditor's position as of the filing of the
bankruptcy case. See In re Ritz-Carlton of D.C., Inc., 98 B.R.
170, 173 (S.D.N.Y. 1989) (District Court reversed Bankruptcy
Court for failing to consider creditor's position at bankruptcy
filing date; "The general rule is that for adequate protection
purposes a secured creditor's position as of the petition date is
entitled to adequate protection against deterioration."). This is
not a situation where Willis waited and surprised the debtor with
a "crippling demand for adequate protection on the eve of
confirmation" -- a situation which might then justify applying
adequate protection relief from the date of the motion. Id.
Willis' motion was filed less than one month into this case.

14. In short, Section 363(e) requires the Court to grant Willis
adequate protection for its Engine Equipment from the filing date
forward. Avianca's proposed protections are illusory and fail the
test. The Court, therefore, must grant the protection requested
by Willis in its motion or terminate the stay to enable Willis to
obtain possession of its engines now to protect its interests in
this expensive equipment.

SECTION 1110 SHOULD GUIDE THE COURT'S DECISION IN FASHIONING
ADEQUATE PROTECTION FOR WILLIS

15. Avianca rejects Willis' request that the Court fashion
"adequate protection" relief under Section 363(e) consistent with
the substance of Section 1110 because it claims to be operating
in the United States without the requisite air carrier operating
certificate.

16. Avianca's technical argument misses the forest for the trees.
The rights and relief afforded to aircraft financiers under
Section 1110 should instruct the Court in determining appropriate
"adequate protection" in this airline case. There is no
legitimate policy reason why Willis should suffer inferior
protection and treatment for its Engine Equipment simply because
Avianca is not a U.S. air carrier. The policy reasons for
Congress' grant of powerful rights to aircraft financiers under
Section 1110 apply with equal, if not greater, force to a non-
U.S. carrier which seeks chapter 11 relief in the U.S. Section
363(e) of the Bankruptcy Code (not to mention Section 105(a))
empowers the Court to provide similar relief where the debtor
airline is a non-
U.S. carrier.

17. Section 1110 grants aircraft financiers special treatment
because they finance multi-million dollar, very mobile, and
highly maintenance-intensive equipment. Congress recognized that
if such financiers face the risk of delay and modification of
contractual rights in bankruptcy, they would not finance aircraft
at prices that airlines could afford. See In re Trans World
Airlines, Inc., 145 F.3d 124, 137 (3d Cir. 1998) ("Section 1110
was designed in part to increase availability of low-interest
capital to the transportation industry."). Section 1110 operates
as a "financier's guarantee that the debtor meets all previous
contractual obligations in order to retain possession of the
aircraft. Otherwise, creditors may raise the cost of aircraft
financing to compensate for that risk." Seidle v. GATX Leasing
Corp., 778 F.2d 659, 664 (11th Cir. 1985).

18. The same policy goals apply in this case, regardless of the
air carrier operating certificate held by Avianca. In fact,
Avianca is a foreign company where the assets ultimately will be
in the control of the courts in another country, making an
ordinary administrative claim in the U.S. court less valuable
than in an ordinary case involving a domestic airline. Because
Avianca is a foreign company whose right to use the U.S.
Bankruptcy Court is questionable, at best, the maintenance of the
automatic stay under U.S. law should be conditioned on nothing
short of payment in full, plus arrears as would occur under
Section 1110. In short, the greater the credit risk, the greater
protection that should be afforded to equipment lessors.

19. Indeed, Avianca's forum shopping generated a scenario where
Section 1110 would not apply to the Engine Leases. On the one
hand, Avianca seeks the protection of the Bankruptcy Code and
this Court, but it also seeks to use an exemption in the
government regulations to avoid the substance of the principal
protections that the Bankruptcy Code provides to aircraft
financiers. The statutory loophole for non-U.S. carriers exists
only because Congress could not have anticipated that a non-U.S.
carrier like Avianca would seek refuge in a U.S. Bankruptcy
Court. This Court should not allow Avianca to manipulate the
Bankruptcy Code in such a way as to shift the balance between air
carrier and financier that Congress set through special
legislation. See also In re Continental Airlines, Inc., 932 F.2d
282, 292 (3d Cir. 1991) (noting argument that, if protections of
section 1110 were not extended to sale and leaseback
transactions, the result would "severely curtail financing
prospects for the entire industry").

20. The Court can and should fashion adequate protection relief
that is consistent with the policy goals of Section 1110 of the
Bankruptcy Code. Section 363(e) of the Bankruptcy Code, as well
as Section 105(a), provides the means by which the Court can
prevent Avianca from manipulating the Bankruptcy Code to its
liking, and at the same time enforce the legislative intent of
Congress in providing substantial protections to aircraft
financiers.

WILLIS IS ENTITLED TO ADEQUATE PROTECTION NOTWITHSTANDING SECTION
365(d)(10)

21. Avianca claims that it need not provide Willis with
meaningful adequate protection because Section 365(d)(10) exists,
and the sixty day "breathing period" will not terminate until May
20, 2003.

22. Section 365(d)(10) obligates Avianca to perform under the
Engine Leases sixty days after the entry of the order for relief,
making clear that contract rate lease payments must be made
regardless of benefit to the estate. Section 365(d)(10) does not
relieve Avianca of its responsibilities under the Engine Leases
during the initial 60-day period and it does not override or
nullify the adequate protection requirements of Section 363(e).

23. To the contrary, when Congress added Section 365(d)(10) in
1994 it also simultaneously amended Section 363(e) by adding the
last sentence, making it clear that Section 363(e) applies to
leases. Section 363(e) provides that: Notwithstanding any other
provision of this section, at any time, on request of an entity
that has an interest in property used, sold, or leased, or
proposed to be used, sold, or leased, by the trustee, the court,
with or without a hearing, shall prohibit or condition such use,
sale, or lease as is necessary to provide adequate protection of
such interest. This subsection [363(e)] also applies to property
that is subject to any unexpired lease of personal property (to
the exclusion of such property being subject to an order to grant
relief from the stay under section 362). 11 U.S.C.  363(e)
(emphasis added).

24. An equipment lessor is entitled to adequate protection under
Section 363(e) where the debtor is in default during the initial
60-period. Hoff-Patrinos, Aviation Finance Revisited: The 1994
Amendments to Section 1110 of the Bankruptcy Code, 69 Am. Bankr.
L.J. 167, 200-01 (1995). "Thus, after the 1994 revisions, lessors
of personal property who lack adequate protection may elect to
seek relief from the automatic stay under  362 or to seek
equitable remedies under  363(e)." In re Elder-Beerman Stores
Corp., 201 B.R. 759, 763 (Bankr. S.D. Ohio 1996); In re Republic
Technologies, Int'l, LLC, 267 B.R. 548, 554 (Bankr. N.D. Ohio
2001) ("A lessor is only entitled to that amount of adequate
protection which would enable him to receive the benefit of his
bargain."); cf. In re Ernst Home Center, Inc., 209 B.R. 955, 966
(Bankr. W.D. Wash. 1997) (holding real property landlord is
entitled to adequate protection, and noting that "Section 363(e)
makes it clear that the personal property lessor is entitled to
adequate protection but not relief from the stay.").

25. There is no question, therefore, that Willis is entitled to
adequate protection under Section 363(e) notwithstanding the
existence of Section 365(d)(10) due to Avianca's defaults and
failure to comply with the Engine Leases since February 2003.

CONCLUSION
26. Willis is entitled to adequate protection, and is entitled to
it immediately. Avianca must be directed to make payment of all
sums due under the lease after the filing date and going forward.
To provide Willis with some measure of protection from the risk
of catastrophic damage, Avianca should be directed to make
"adequate protection" payments to Willis which includes an amount
equal to the arrears outstanding as of the filing date.
Alternatively, this Court should terminate the stay pursuant to
Section 362(d) so that Willis can recover its engines.

27. Considering the cost and risk to Willis involved with
Avianca's use of the engines, equity requires the immediate grant
of adequate protection or the alternative lifting of the stay.

Dated: New York, New York
April 30, 2003
FULBRIGHT & JAWORSKI L.L.P.

Attorneys for Willis Lease Finance
Corporation and Willis Engine Funding LLC

By: /s/ William J. Rochelle, III
William J. Rochelle, III (WR-1893)
David A. Rosenzweig (DR-5742)
666 Fifth Avenue
New York, New York 10103
(212) 318-3000


AVIANCA: Court Authorizes Payment Of Certain Obligations
--------------------------------------------------------
These matters came before the Court for a hearing on April 24,
2003, upon four Motions filed by Aerovias Nacionales de Colombia
S.A. Avianca and Avianca, Inc. (collectively the "Debtors" or
"Avianca") on March 21, 2003, the date that the Debtors commenced
the abovecaptioned chapter 11 cases in this Court (the "Petition
Date"), each such Motion requesting emergency relief authorizing
the Debtors to pay or honor certain prepetition obligations, to
wit:

    (1)  the Debtors' Emergency Motion For Order Authorizing
         Payment Or Honoring Of Certain Prepetition Claims Of
         Outside Mechanics and Repairmen (Docket Entry No. 11)
         (the "Mechanics Motion"),

    (2)  the Debtors' Emergency Motion for an Order Authorizing
         Payment or Honoring of Prepetition Obligations to
         Foreign Vendors, Service Providers and Governments
         (Docket Entry No. 8) (the "Foreign Vendor Motion"),

    (3)  the Debtors' Motion for Order Authorizing Payment of
         Wages, Salaries, Employee Benefit Contributions and
         Employee Deductions (Docket Entry No. 10) (the "Wages
         Motion"), and

    (4)  the Debtors' Emergency Motion for an Order Authorizing
         Payment to or Honoring of Prepetition Obligations to
         Ticket Holders, Other Airlines with whom the Debtors
         have Interline Relationships, Travel Agents, Clearing
         Houses, Tour Service Providers, Barter Arrangements,
         Commercial Agreements, Fuel Suppliers, In-To Plane
         Service Companies, Certain Bank Charges and Other
         Essential Suppliers (Docket Entry No. 7) (the
         "Essential Payments Motion"; the Mechanics Motion,
         the Foreign Vendor Motion, the Wages Motion and the
         Essential Payments Motion, collectively, the "Motions").

The Court, having granted interim relief on the Motions upon the
evidence presented, the arguments of counsel and the entire
record of the cases made at hearings on March 21, March 25, and
April 11, 2003, and it appearing that the Official Committee of
Unsecured Creditors (the "Committee") and its proposed counsel
and financial advisors have consulted with the Debtors and their
counsel and financial advisors, and that, as demonstrated by the
statements of its counsel in open court, the Committee supports,
subject to the terms and conditions of this Order, the relief
provided below, and the Court having found that notice of the
Motions and the hearing thereon, including notice to the United
States Trustee, the Committee, The Bank of New York, as Trustee
under the Master Airline Ticket Receivables Master Trust, the
District Director of the Internal Revenue Service, the U.S.
Attorney for the Southern District of New York, the Securities
and Exchange Commission and any person or entity who has
requested notice, was good and sufficient under the
circumstances, and no creditor or other party in interest having
objected to the relief provided below by filing a written
objection thereto and the Court overruling the oral objection
made in opposition thereto, and after due deliberation and
sufficient cause appearing therefor, including the
representations and assurances made by the Debtors on the record
of the hearing of the actual amounts paid on prepetition debt
pursuant to prior Orders of this Court authorizing the same and
the amounts needed to permit the Debtors to continue their
operations in the ordinary course through May 9, 2003, are the
amounts requested as said amounts are set forth on Exhibit A
attached hereto, and the Motions having been heard and considered
together, as the Court's omnibus Order on all Motions, it is
hereby

ORDERED, ADJUDGED AND DECREED as follows:

Provisions Applicable to All Motions

1. That this Court has jurisdiction over these cases and the
parties and property affected thereby pursuant to 28 U.S.C. 
157(b) and  1334.

2. That due to the emergency nature of the Motions, this Order
has been granted upon limited notice. This Court has authority to
enter this Order without general notice to creditors pursuant to
11 U.S.C.  105(a) and  102(1).

3. That notwithstanding the provisions of the Orders previously
entered by the Court on any of the Motions, the authority granted
by this Court to the Debtors to pay or honor, on or after April
24, 2003, any prepetition obligations as requested by any of the
Motions shall be limited, until further Order of this Court, to
the amounts and to the extent specifically set forth herein.

The Mechanics Motion
4. That the Debtors be, and they hereby are, authorized in their
discretion to pay up to the amount of $2,927,553 to secure the
release of any or all of the following property: 5 engines: 3
engines for MD-83 aircraft; and 2 engines for Fokker-50 aircraft
and any equipment and avionics associated with MD-83 and Fokker-
50 aircraft currently held subject to the rights of the repairman
or vendor. Such payments will be without prejudice to Avianca's
right to pursue any bankruptcy or nonbankruptcy claims it may
have against the repairman or vendor regarding the refusal to
deliver or service Avianca's aircraft and parts.

The Foreign Vendors Motion
5. That the Debtors be, and they hereby are, authorized to honor
and pay obligations of the Debtors to foreign vendors and service
providers limited to those obligations which arose prepetition up
to the sum of $793,369, subject to the agreement of any such
foreign vendors or service providers to grant the Debtors such
terms on continuing purchases of goods or services in the
ordinary course of business as the Debtors may require, and to
honor and pay other airport and landing related expenses and
taxes in Colombia which arose prepetition up to the sum of
$1,842,094. For purposes of this Order, "foreign" creditors are
those entities located outside the United States and Colombia,
with the limited exception of certain critical governmental,
airport, and taxing authorities located in Colombia. Moreover, no
payments made pursuant to the authority granted in this paragraph
5 shall be made to foreign creditors with minimum contacts
sufficient to subject them to the jurisdiction of the United
States Courts.

The Wages Motion
6. That the Debtors are hereby authorized and empowered to pay
wages in an aggregate amount not to exceed $4,892, cesantias in
amount not to exceed $190,245, and Deductions (as that term is
defined in the Wages Motion) in an amount not to exceed $48,986,
which have been earned, incurred and/or accrued prior to the
commencement of the Debtors' bankruptcy cases by virtue of the
services rendered by the Employees of the Debtors.

The Essential Payments Motion

7. That the Debtors are authorized and empowered to honor tickets
which were purchased prepetition but have not yet been used, by
providing the agreed-upon air transportation, and to provide air
transportation to travelers who seek to redeem miles which
accrued prepetition in the Latin Pass frequent flier bonus
program, the AviancaPlus frequent flier program, and the
"Privilegios" ("Privileges") frequent flier program.

8. That the Debtors are hereby authorized and empowered to make
payments to or honor In-to Plane Service Company Claims (as
defined in the Essential Payments Motion); make payments to or
allow Avianca accounts to be debited by the banks relating to the
Bank Claims (as defined in the Essential Payments Motion); make
payments for services provided by Outsourcing Employees (as
defined in the Essential Payments Motion); and make payments on
Other Supplier Claims (as defined in the Essential Payments
Motion) to other essential suppliers that Avianca may be unable
to replace on short notice; and in its discretion, instruct banks
to honor checks drawn by the Debtors prepetition to pay claims
described in the Essential Payments Motion and herein which have
not cleared the banking systems in the normal course prior to the
Petition Date unless otherwise directed by Debtors, provided that
the aggregate payments made on or after April 24, 2003, pursuant
to the authority granted under this paragraph 8 shall not exceed
$50,000.

9. The Debtors are hereby authorized and empowered (i) to pay the
Travel Agents Claims (as defined in the Essential Payments
Motion) on prepetition sales as such payments become due, in
accordance with the terms of applicable commission agreements and
Avianca's normal prepetition procedures, (ii) to pay holders or
honor miscellaneous charge orders ("MCO's") or the Tour Claims
(as defined in the Essential Payments Motion) for charges due and
owing under prepetition MCO's or directly to those hotels where
there is a direct contractual obligation, in accordance with
Avianca's normal prepetition procedures, (iii) to comply with
ticketholder requests for refunds on tickets purchased prior to
the Petition Date, in accordance with the terms of the tickets
and Avianca's normal prepetition refund procedures, (iv) to make
payments or provide other compensation to passengers and cargo
shippers in connection with claims for lost or damaged baggage or
other service deficiencies that have occurred before the Petition
Date in accordance with Avianca's normal compensation procedures,
(v) to honor Commercial Agreements (as defined in the Essential
Payments Motion) for the provision of certain code sharing
services and commercial marketing services in accordance with
Avianca's normal prepetition procedures, (vi) to honor Universal
Air Travel Plan Credits in accordance with Avianca's normal
prepetition procedures, (vii) to honor tickets held by customers
and vouchers or other authorizations for free or discounted
travel issued before the Petition Date; and (viii) to make
payment of any Interline Claims (as defined in the Essential
Payments Motion) which may be due and owing IATA, ACH or other
carriers pursuant to multi-lateral or bi-lateral Interline
Agreements (as defined in the Essential Payments Motion) to which
Avianca is a party, on account of prepetition interline
obligations, provided that the aggregate payments made on or
after April 24, 2003, pursuant to the authority granted under
this paragraph 9 shall not exceed $50,754.

10. That the stay imposed by section 362(a) of the Bankruptcy
Code hereby is modified to the extent necessary to permit parties
to the Interline Agreements, including ARC, BSP's, IATA and ACH,
each as defined in the Essential Payments Motion to offset
refunds due other airlines, or travel agents and generally handle
Clearinghouse Claims (as defined in the Essential Payments
Motion) without regard to whether debits or credits accrued pre
or postpetition and in accordance with normal operating
procedures and, further, to permit travel agencies to deduct
commissions before submitting sales receipts in accordance with
governing commission agreements and standard prepetition
procedures.

General Provisions

11. That all applicable banks and other financial institutions
are hereby authorized and required to receive, process, honor and
pay any and all checks and transfer requests evidencing amounts
paid by Debtors under this Order whether presented prior to or
after the Petition Date.

12. That notwithstanding the relief granted herein and any
actions taken hereunder, nothing contained herein shall
constitute, nor is it intended to constitute, the assumption of
any contract or agreement under 11 U.S.C.  365.

13. That the Debtors are directed, notwithstanding the authority
to make payments set forth herein, to make every reasonable
effort to minimize cash expenditures and make only those payments
authorized hereunder which they determine, exercising reasonable
business judgment, are necessary to continue the operation of
their business in the ordinary course without undue harm.

14. That the Debtors shall (a) on a daily basis, furnish to the
Committee's financial advisors the Debtors' daily cash flow
report, (b) promptly upon the completion thereof, permit the
Committee's financial advisors to have access to the Debtors'
budgets for subsequent periods, including all periods during the
60-day period commencing on the Petition Date and subsequent
periods, and including all budgets furnished to the lenders under
the Debtors' debtor in possession loan facility, and (c) in
connection with each such budget, permit the Committee's
financial advisors to have access to such back-up and detail as
shall have been produced by the Debtors or as reasonably
requested by the Committee, such as a comparison of actual
results to projections.

Further Hearing

15. That any further relief will be considered at a hearing to be
held before this Court on May 8, 2003, at 11:00 a.m.

16. That within three days hereof, counsel for the Debtors shall
serve this Order by mail on (i) the United States Trustee, (ii)
the Committee, (iii) all secured creditors of each Debtor, (iv)
each person or entity that has filed a Notice of Appearance in
these chapter 11 cases, and (iv) The Bank of New York.

Dated: New York, New York
April 28, 2003
/s/ Allan L. Gropper _ _
United States Bankruptcy Judge

No Objection:

SMITH, GAMBRELL & RUSSELL, LLP
Attorneys for Debtors

/s/ Ronald E. Barab
By: Ronald E. Barab (RB4876)
Suite 3100, Promenade II
1230 Peachtree Street, N. E.
Atlanta, Georgia 30309
(404) 815-3500
(404) 815-3509 - Fax
GREENBERG TRAURIG, LLP

Attorneys for the Official Committee of Unsecured Creditors
/s/ Richard S. Miller
By: Richard Miller (RM2428)
200 Park Avenue
New York, New York 10166
(212) 801-6400



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

JUTC: Acquires New Buses, Opens New Route
-----------------------------------------
The Jamaica Urban Transit Company Limited (JUTC) acquired 30 new
vehicles to service the country by September. At least 18 of the
new buses will be on the roads by the end of next month, and the
rest will come later. However, all buses are expected to be in
operation by September.

Each of the buses is equipped with 38 hard-shelled passenger
seats, and the Company's Smart Card machines. Commuters will have
to use their Smart Cards, instead of paying fares.

"The buses were funded by the Belgium Government and it was done
for Jamaica at a very low concession rate," said Rennie
Wellington, Managing Director of MKI, the dealership for the MAN
group in the Caribbean and Central America. "I don't want to
disclose the figure, but I would say it is under five per cent
per annum."

The Jamaica Gleaner reports that JUTC plans to introduce a new
route in Above Rocks, St. Catherine, to ease the transportation
shortage there.

"We conducted a survey in the community three weeks ago and we
found that there were mainly taxis and few small buses that
weren't sufficient," said Jacqueline Darwood, JUTC Service
Planning Manager.

The JUTC is proposing to service the route with four new MAN
buses operating from Above Rocks to Half-Way Tree, Mondays
through Fridays and Above Rocks to downtown Kingston on
Saturdays, the report reveals.

The move is also seen as part of the Company's plans to recover
heavy losses.



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

PEMEX: Lines Up Projects As Threat of Shortage Looms
----------------------------------------------------
Mexico's state oil company, Pemex, has scheduled several projects
in the northern part of Mexico even as the risk of gas shortage
still exists. Pemex CEO Raul Monoz Leos said that demand for gas
is picking up because of the falling prices, after the economic
downturn pulled the demand down during the first months of this
year.

Pemex will upgrade four compressors at the Los Ramones pump
station, and is to be completed by June. This project is designed
to increase gas flow from north to south by 100 million cubic
feet daily, to a daily average of 750 million cubic feet,
according to Business News Americas.

The Company is also building a more pipelines to improve its
performance. The Gasoducto del Rio subsidiary of French power
company EDF is constructing a gas pipeline with a diameter of 30
inches to supply power to generation plants at Rio Bravo in
Tamaulipas. This project is to begin operations by August.

The other pipeline, 36 inches in diameter, will connect Reynosa
in Nueva Leon state to San Fernando in Tamaulipas, which should
commence operations in September, said Mr. Munoz.



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

ENITEL: Comptroller Rejects Sale Allegations
--------------------------------------------
Nicaragua's comptroller upheld a decision by the supreme court
that rejected allegations regarding the partial privatization of
incumbent fixed line operator Enitel.

Business News Americas recalls that Enitel was partially
privatized in 2001 when the government sold its 40% stake in
Enitel to the Megatel consortium, comprised of Sweden's Telia
Swedtel and Honduran electricity company EMCE. Megatel paid US$33
million for the stake and is presently paying the government
US$10 million a year, as part of a five-year management contract
that will expire in April 2006.

However, Managua mayor Herty Lewites alleged that the sale
violated the laws surrounding the sale of state assets. Business
News Americas suggests that Lewites opposed the sale because he
feared it would impede his attempts to claim two year's back
taxes from the telco.

Enitel employees hold an 11% stake in the company and the
government plans to sell its remaining 49% stake in the company
September 30.



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

BWIA: Union Opposes Top Heavy Management Structure
--------------------------------------------------
BWIA executives absorbed more than one-third of the airline's
labor costs, said to Theo Oliver, president of the Airline
Superintendents Association (ASA), at a joint meeting of the
memberships of ASA, Aviation Communication and Allied Workers
Union (ACAWU) and the Communication, Transport and General
Workers Trade Union (CTGWTU).

"They (management) in fact at the end of 2002 were enjoying 35
per cent of the labor costs at BWIA," Oliver was quoted by the
Trinidad Guardian on Saturday.

According to Mr. Oliver's estimates, US$70,000 of the airline's
projected daily labor cost of US$200,000 goes to the airline's 31
executives, senior managers and the CEO, while BWIA's remaining
2,370 employees share the remaining US$123,000 left.

A document, which is said to be prepared by a retrenched BWIA
official, suggests that salary average figure for all employees
is below the executive management level, said the Trinidad
Guardian.

That figure is $16,250 per month as opposed to the present
average monthly salaries at BWIA which the document says range
from $40,000 for pilots to $3,700 for ACAWU members to $11,000
for middle management, said the report.

Recently, a group of disgruntled workers marched in protest,
demanding their severance payment after BWIA retrenched them in
January. BWIA said that it does not have enough money to pay the
retrenched people and offered to pay two weeks' worth of salary
in advance. However, local reports indicate that the unions had
rejected BWIA's proposal, and contemplated on taking legal action
against the financially struggling airline.

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


BWIA: Board To Meet With Government On Tuesday To Clear Quandary
----------------------------------------------------------------
BWIA's board of directors plans to meet with the Trinidad &
Tobago government's inter-ministerial committee on Tuesday to
clarify some matters, the Trinidad Express reports.

According to some insiders, BWIA's board apparently has no
precise understanding of what the exactly is required in the
management review exercise. The government required the board to
conduct a review on the management team, led by BWIA Chief Conrad
Aleong, in exchange for bail out funds.

Insiders added that the Board is still undecided on whether to
undertake the review itself or no. To end its dilemma, said the
report, the Board will ask the government whether it(the board)
is required to conduct the review or not.

At a post-Cabinet new conference on April 17, the government
indicated that it will not release a single centavo of the
US$18.5 million bailout funds for BWIA, unless a management
review is completed.

BWIA is in serious financial trouble, after the war in the Middle
East worsened its already-weak financial standing. Before the
government agreed to make the bailout funds available, local news
indicated that the airline may have to go into receivership.



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

* Japanese Holders Of Uruguay Debt To Decide on Swap Offer Soon
---------------------------------------------------------------
Japanese Holders of Uruguayan Debt is scheduled to meet on May 15
to decide on whether to accept Uruguay's scheme to extend the
maturity of Samurai bonds - yen bonds issued in Japan by a
foreign entity - by five years to 2011.

In order to make its program attractive, Uruguay offers to
increase the coupon rate by 30 basis points to 2.5 percent, from
the current 2.2, relates Reuters. Samurai bonds account for less
than 0.5 percent of Uruguayan bonds held by private investors.

It has one tranche of outstanding Samurais worth 30 billion yen
($250.2 million) in five-year bonds. The bond was issued in 2001
and originally scheduled to mature in March 2006, said the
report.

Reuters cited an unnamed source privy to the matter saying the
Japanese investors are probably unique among Uruguayan
bondholders because they include a number of retail investors.

Samurai holders include regional institutions, and some major
institutional investors aside from the estimated 5,000 retail
investors.

Furthermore, the source added that institutional investors, which
reportedly hold more than half of the total outstanding issues,
are expected to accept Uruguay's offer, adding that nothing is
definite at this stage, however.

The meeting will require the presence of more than half of the
holder's of the outstanding amount of Y30 billion. A vote from
more than two-thirds of those present is needed to formally
confirm the Japanese holders' support for Uruguay's proposal.

However, Uruguay's proposal will need the approval of its other
creditors, who will also decide by May 15. If all the creditors
accept the offer, up to US$5.2 billion in debt may be swapped.
Uruguay needs at least 80 percent of creditors to accept the
offer to ensure the scheme's success.

The future darkens for Uruguay if it fails to receive the needed
votes.

"Failure to clinch a deal would be clearly negative for Uruguay
because it would mean that its cash flows would become even
tighter,"said Yoshiaki Yamamoto, a senior analyst at Japanese
rating firm Ratings and Investment Information (R&I).

Even if the swap succeeds, analysts believe that issues over
Uruguay will remain, given the lingering fragility in the region,
said the report.




               ***********


S U B S C R I P T I O N   I N F O R M A T I O N

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and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
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Copyright 2003.  All rights reserved.  ISSN 1529-2746.

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Information contained herein is obtained from sources believed to
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