TCRLA_Public/030603.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, June 3, 2003, Vol. 4, Issue 108

                           Headlines


A R G E N T I N A

ACINDAR: Reports Final Results of Cash Tender Offer
AEROPUERTOS ARGENTINA: Company Mum on Decree Suspsension
DISCO: Ahold Capitalizes Debt
TELECOM ARGENTINA: Asks WB To Settle Governement Rate Conflict


B E R M U D A

FOSTER WHEELER: S&P Moves to CreditWatch Negative
GLOBAL CROSSING: Releases Operating Results for April 2003


B R A Z I L

AES CORP: Likely To Find Itself in Another Probe
CELG: Signs New PPA With A Consortium of Companies
CELG: Reports $2.12M Profit In 1Q03
EMBRATEL: Wants Confirmation Delay on Brasil Telecom Build-out
KLABIN: Signs Accord to Transfer Controlling Stake in Riocell

SABESP: Taps US, European Investors on Bond Sale
TELEMAR: Insider Trading Taints Oi Deal
TELEMAR: Oi Acquisition Averts 1Q03 Losses
TUPY: Expects Exports To Contribute To Growth Despite WTO Ruling


C H I L E

ENDESA: Sells Transmission Lines To HQI Transelec For $110M
INVERLINK: Creditors Agree To $582,000 Sale of Clinica Las Lilas
VTR: UGC Announces Successful Refinancing Completion


C O L O M B I A

INAT: Government Signs Decree Supporting Successor Firm
* Colombia's Debt Is At Its Highest Point, Warns Comptroller


E C U A D O R

PETROECUADOR: Delays Contract Details To End-June


H O N D U R A S

AT&T: Hondutel Suspends Interconnection On Nonpayment Of Dues


J A M A I C A

C&WJ: Meets Caribtel In Court


M E X I C O

ALESTRA: Extends Exchange Offer Deadline
BITAL: HSBC Seeks De-Listing As Volume Shrinks Near Zero
GRUPO ELEKTRA: Slams Moody's Recent Ratings Decision
GRUPO IUSACELL: Lack of Funds Makes $25M Payment Unlikely


P E R U

MINERA VOLCAN: OK's Glencore Due Diligence Visit


T R I N I D A D   &   T O B A G O

BWIA: Barely Hanging On, Pins Hopes on Government Aid


U R U G U A Y

* Fitch Rates Uruguay's US$3.4B New Bond Issue 'B-'


   - - - - - - - - - - -


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

ACINDAR: Reports Final Results of Cash Tender Offer
---------------------------------------------------
Acindar Industria Argentina de Aceros S.A. ("Acindar") announced
Friday final results of its offer to purchase for cash (the "Cash
Tender Offer") its 111/4% Notes due 2004 (the "Notes") and
certain of its U.S. dollar denominated indebtedness (the "Dollar
Debt"). The Cash Tender Offer expired at 12:00 p.m., New York
City time, on Thursday, May 29, 2003.

Acindar has been advised by the depositary that, as of the
expiration time of the Cash Tender Offer, U.S.$40,041,663 in
aggregate principal amount of Notes and Dollar Debt had been
validly tendered and not withdrawn pursuant to the Cash Tender
Offer. Acindar has accepted for purchase, at a Purchase Price of
U.S.$650 per $1,000 principal amount, all of the Notes and Dollar
Debt validly tendered and not withdrawn pursuant to the Cash
Tender Offer. The cash payment required to complete the Cash
Tender Offer is U.S.$26,027,080. Payment for the Notes and Dollar
Debt accepted for purchase is expected to occur on or about
Tuesday, June 3, 2003.

Acindar will also pay an aggregate of U.S.$2,002,083 as an Early
Tender Payment in connection with the Cash Tender Offer.

Credit Suisse First Boston LLC served as the dealer manager for
the Cash Tender Offer, JPMorgan Chase Bank served as the
depositary and Georgeson Shareholder served as the information
agent.


AEROPUERTOS ARGENTINA: Company Mum on Decree Suspsension
--------------------------------------------------------
Aeropuertos Argentina 2000 (AA2000) is yet to comment on a
decision by an Argentine federal judge to suspend a decree that
ended contract re-negotiations with the airport concessionaire.
Business News Americas relates that the decree, signed by the
country's former president, Eduardo Duhaldo, shortly before he
stepped down on May 25, cut AA2000's annual contract to the
government by more than half.

Furthermore, it did not require AA2000 to move Jorge Newberry
national airport to Ezeiza international airport, although it
would have to contract insurance in order to guarantee the
contract.

The judge backed its decision by saying that a precautionary
claim submitted in March by Servicios Aeros PSA, an aircraft
services company that operates at San Fernando airport, to allow
it to participate in AA2000's re-negotiation process was not
respected.

For their part, the country's airline companies representatives
association Jurca said it plans to meet with government
authorities to protest that the re-negotiation benefits only
AA2000 without any equivalent cost reduction for airlines that
operate at AA2000-run airports.

Previously, AA2000 spokesperson Sergio Resumil has said: "When we
won the tender we had offered 171mn pesos [currently US$59.4mn],
with a base of 23 million passengers. According to the new
agreement, with the level of traffic that does not exceed 12
million passengers, we will pay 100mn pesos/yr, in monthly
installments."

AA2000's original contract called for two yearly payments of
US$85.5 million.

The decree also called for AA2000 to invest 2.6bn pesos through
2028 versus the 2.23bn pesos it had to invest originally when one
peso was equal to one US dollar.

The concessionaire's 30-year concession began in 1998.

AA2000, which operates 32 airports in Argentina, is a
multinational consortium formed by Corporacion America
Sudamericana (35%), Societa Per Azioni Esercizi Aeroportuali
(28%), Simest Spa (8%), Ogden Corporation (28%), and RIVA (1%).


DISCO: Ahold Capitalizes Debt
-----------------------------
Royal Ahold decided to transform debts owed it by Argentine
supermarket chain Disco into capital, Clarin reports. The
decision was taken at an assembly meeting held last Wednesday.

Disco reportedly owes a total of US$512 million. The Dutch owner
has previously informed its intention of selling the unit in
order to reduce debts, but has never revealed the name of the
firm with whom it is negotiating.


TELECOM ARGENTINA: Asks WB To Settle Governement Rate Conflict
--------------------------------------------------------------
Julio de Vido's decision to reject rate hikes in the short-term,
prompted Telecom Argentina to seek help from the World Bank's
international settlement center ICSID. According to Business News
Americas, Telecom argues that the conversion of rates from
dollars into pesos early last year, and the government's refusal
to allow rate hikes, contravene the Company's concession
contract.

Telecoms operators are unlikely to find favor with the new
communications secretary Guillermo Moreno, who answers to Mr. De
Vido, Argentina's new planning minister. According to local
consultant Enrique Carrier, Mr. Moreno's political profile
suggests he will lean more to the needs of the consumers.

Furthermore, Mr. De Vido is on record saying rate increases will
have to be linked to contract renegotiations, in which case Mr.
Carrier believes Mr. Moreno will include clauses obliging
operators to prefer local suppliers.



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

FOSTER WHEELER: S&P Moves to CreditWatch Negative
-------------------------------------------------
Standard & Poor's Ratings Services said Friday that it placed its
'B' corporate credit rating and its other ratings on Foster
Wheeler Ltd. on CreditWatch with negative implications.

The CreditWatch listing reflects Standard & Poor's heightened
concerns that, short of a material asset sale, or noncoercive
financial restructuring within the next few quarters, the
viability of Perryville, N.J.-based Foster Wheeler would be
questionable. These concerns stem from Foster Wheeler's limited
financial flexibility, its expected usage of working capital
during 2003 as construction projects are completed, and its
onerous capital structure, including its underfunded pension
plan.

"If the company is unable to provide specific plans of action
that will adequately address these concerns, a ratings downgrade
of several notches is possible," said Standard & Poor's credit
analyst Joel Levington.

Foster Wheeler, which had about $1.2 billion in total debt
outstanding at March 31, 2003, provides a wide range of
engineering and construction services, mainly to the oil and gas,
pharmaceutical, chemical processing, and power generation
markets. Orders for energy equipment can be large, making cash
flow and earnings "lumpy" in that segment. Because of very weak
demand for those products, it is likely that the firm will be a
cash user in that segment as it works off advanced payments from
prior orders.

Standard & Poor's will meet with management to discuss its near-
term financial strategies to obtain needed liquidity, their
impact on business risk, the degree of success the firm has had
in implementing more stringent risk management initiatives, and
the near- and intermediate-term outlook in its key end-markets,
before taking a further ratings action.

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.

Analyst:  Joel Levington
          New York
          Phone: (1) 212-438-7802


GLOBAL CROSSING: Releases Operating Results for April 2003
----------------------------------------------------------
Global Crossing filed a Monthly Operating Report (MOR) with the
U.S. Bankruptcy Court for the Southern District of New York
Friday, as required by its Chapter 11 reorganization process.
Unaudited results reported in the April 2003 MOR include the
following:

For continuing operations in April 2003, Global Crossing reported
consolidated revenue of approximately $228 million. Consolidated
access and maintenance costs were reported as $173 million, while
other operating expenses were $66 million.

"Our critical focus during this reorganization period is to work
even more closely with our customers to meet their needs for
communication services and earn their on-going business," said
John Legere, Global Crossing's chief executive officer. "The
relative stability of our revenue results during April, and
realized to date, reflects the success of these efforts and the
value of the customer relationships which we have built.
Notwithstanding the variability of expenses from month to month,
we continue to manage our operating expenses and cash
requirements very tightly and closed the month with a
consolidated cash balance of $584 million."

Global Crossing's consolidated cash balance of approximately $584
million as of April 30, 2003 was comprised of approximately $180
million in unrestricted cash, $333 million in restricted cash and
$71 million of cash held by Global Marine.

Consolidated EBITDA was reported at a loss of $11 million. The
consolidated net loss for April 2003 was $75 million. As
discussed below, the reported depreciation and amortization of
$87 million for the month of April 2003, and therefore both the
April operating loss and net loss, would have been reduced
substantially if the financial statements in the April MOR had
reflected the tangible asset impairment anticipated by the
company.

MOR RESULTS MONTHLY RESULTS FEBRUARY THROUGH APRIL 2003

             CONSOLIDATED     CONSOLIDATED         NET INCOME
MONTH         REVENUE             EBITDA             (LOSS)

April 2003     $228mn           $(11)mn              $(75)mn

March 2003     $231mn           $4mn                 $(89)mn

February 2003  $222mn           $(9)mn               $(142)mn

Notes

The MOR reports revenue and cash balances according to generally
accepted accounting principles in the United States of America
(US GAAP). US GAAP revenue includes revenue from sales of
capacity in the form of indefeasible rights of use (IRUs) that
occurred in prior periods, recognized ratably over the lives of
the relevant contracts. Beginning on October 1, 2002, Global
Crossing ceased recognizing revenue from exchanges of leases of
capacity.

Consolidated EBITDA is defined as operating income/(loss) from
the consolidated statements of operations, less depreciation and
amortization expense. EBITDA is not a measurement under US GAAP
and may not be similar to EBITDA measures of other companies.
Management believes that EBITDA is a relevant indicator of
operating performance, especially in a capital-intensive industry
such as telecommunications, since it excludes items that are not
directly attributable to ongoing business operations. In
addition, the depreciation of $87 million for the month of April
2003, and therefore the April operating loss, would have been
reduced substantially if the financial statements in the April
MOR had reflected the tangible asset write-down described below.

Pursuant to Regulation G, the following table provides a
reconciliation of consolidated EBITDA, which is a non-GAAP
financial metric, to operating income, which is the most directly
comparable GAAP measure.

MONTH           CONSOLIDATED    DEPRECIATION AND   OPERATING
                  EBITDA        AMORTIZATION      INCOME (LOSS)

April 2003         $(11)mn        $87mn             $(98)mn

March 2003         $4mn           $89mn             $(85)mn

February 2003      $(9)mn         $86mn             $(95)mn

The information contained in this press release is qualified in
its entirety by reference to the MORs for the months of February
2002 through April 2003, including the footnotes to the financial
statements contained therein, copies of which are available
through the U.S. Bankruptcy Court for the Southern District of
New York and on Global Crossing's Web site at
http://www.globalcrossing.com/pdf/investors/inv_mor_april_03.pdf.
These MORs have been prepared pursuant to the requirements of the
Bankruptcy Code and the unaudited consolidated financial
statements contained in these MORs do not include all footnotes
and certain financial presentations normally required under GAAP.
In addition, any revenues, expenses, realized gains and losses,
and provisions resulting from the reorganization and
restructuring of Global Crossing are reported separately as
reorganization items in these MORs.

As discussed more fully in the footnotes to the financial
statements contained in the MORs, Global Crossing has not yet
filed its Annual Report on Form 10-K for the year ended December
31, 2001. On November 25, 2002, the United States Trustee
appointed Martin E. Cooperman, a partner of Grant Thornton LLP,
as the Examiner in Global Crossing's bankruptcy proceedings. In
general, the Examiner's role is limited to reviewing the
financial statements of the Global Crossing companies in
bankruptcy for the fiscal years ended December 31, 2001 and 2002
and earlier periods if any restatement of those periods is
necessary. As part of his role, the Examiner, with the assistance
of Grant Thornton LLP, will audit any revised financial
statements and issue a report as to such financial statements.
Separately, on January 8, 2003, Grant Thornton was appointed as
independent auditors of Global Crossing effective as of November
25, 2002. The Examiner's first interim report to the Bankruptcy
Court was filed on February 24, 2003.

Certain matters relating to Global Crossing's accounting for, and
disclosure of, concurrent transactions for the purchase and sale
of telecommunications capacity between Global Crossing and its
carrier customers are being investigated by the Securities and
Exchange Commission (SEC) and other governmental authorities. In
addition, the U.S. Department of Labor is conducting an
investigation into the administration of Global Crossing's
benefit plans. These and other investigations are described more
fully in footnote one to the financial statements contained in
the April MOR.

Any changes to the financial statements resulting from any
governmental investigations and adjustments arising out of the
2001 and 2002 financial statement audits could materially affect
the unaudited consolidated financial statements contained in the
MORs and the information presented in this press release.

On October 21, 2002, Global Crossing announced that it would
restate certain financial statements previously filed with the
SEC. These restatements, which are more fully described in
footnote one to the financial statements contained in the April
MOR, will record exchanges between carriers of leases of
telecommunications capacity at historical carryover basis,
resulting in no recognition of revenue. Reflecting this
accounting treatment, the April MOR excludes amounts previously
recognized as revenue over the lives of the lease contracts
governing these capacity exchanges. The restatements have no
impact on cash flow.

As previously announced, Global Crossing's net loss for the three
months ended December 31, 2001, which has not yet been reported
pending the completion of the audit of financial statements for
2001, is expected to reflect the write-off of the remaining
goodwill and other intangible assets, which total approximately
$8 billion. Furthermore, as previously disclosed, Global Crossing
has determined that it will write down its tangible assets in
light of the terms contained in the previously announced
agreement with Hutchison Telecommunications and Singapore
Technologies Telemedia, and the bankruptcy filings of Asia Global
Crossing and its subsidiary, Pacific Crossing Ltd. Global
Crossing is in the process of evaluating its cash flow forecasts
and other pertinent data to determine the amount of the
impairment of its long-lived tangible assets. The impairment is
anticipated to be at least $7 billion, an estimate that excludes
any amounts attributable to the restatement of exchanges of
capacity leases described above and excludes any impairment
attributable to the assets of Asia Global Crossing and its
subsidiaries, which Global Crossing deconsolidated effective
November 18, 2002. The financial information included within this
press release and the April MOR reflects the restatement of
exchanges of capacity leases as described above and the $8
billion write-off of all of the goodwill and other identifiable
intangible assets, but does not reflect any write-down of
tangible asset value. Accordingly, the net loss of $75 million
for the month of April 2003 would have been reduced substantially
if the financial statements in the April MOR had reflected the
reduction in depreciation and amortization expense resulting from
this tangible asset write-down. The write- off of the intangible
assets and the write-downs of tangible assets are described more
fully in the April MOR.

ABOUT GLOBAL CROSSING

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network, which reaches
27 countries and more than 200 major cities around the globe.
Global Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services.

On January 28, 2002, Global Crossing Ltd. and certain of its
subsidiaries (excluding Asia Global Crossing and its
subsidiaries) commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York
(Bankruptcy Court) and coordinated proceedings in the Supreme
Court of Bermuda (Bermuda Court). On the same date, the Bermuda
Court granted an order appointing joint provisional liquidators
with the power to oversee the continuation and reorganization of
the Bermuda-incorporated companies' businesses under the control
of their boards of directors and under the supervision of the
Bankruptcy Court and the Bermuda Court. Additional Global
Crossing subsidiaries commenced Chapter 11 cases on April 23,
August 4 and August 30, 2002, with the Bermuda incorporated
subsidiaries filing coordinated insolvency proceedings in the
Bermuda Court. The administration of all the cases filed
subsequent to Global Crossing's initial filing on January 28,
2002 has been consolidated with that of the cases commenced on
January 28, 2002. Global Crossing's Plan of Reorganization, which
was confirmed by the Bankruptcy Court on December 26, 2002, does
not include a capital structure in which existing common or
preferred equity will retain any value.

On November 18, 2002, Asia Global Crossing Ltd., a majority-owned
subsidiary of Global Crossing, and its subsidiary, Asia Global
Crossing Development Co., commenced Chapter 11 cases in the
United States Bankruptcy Court for the Southern District of New
York and coordinated proceedings in the Supreme Court of Bermuda,
both of which are separate from the cases of Global Crossing.
Asia Global Crossing has announced that no recovery is expected
for Asia Global Crossing's shareholders. Asia Netcom, a company
organized by China Netcom Corporation (Hong Kong) on behalf of a
consortium of investors, has acquired substantially all of Asia
Global Crossing's operating subsidiaries except Pacific Crossing
Ltd., a majority-owned subsidiary of Asia Global Crossing that
filed separate bankruptcy proceedings on July 19, 2002. Global
Crossing no longer has control of or effective ownership in any
of the assets formerly operated by Asia Global Crossing.

Please visit www.globalcrossing.com for more information about
Global Crossing.

Statements made in this press release that state Global
Crossing's or management's intentions, beliefs, expectations, or
predictions for the future are forward-looking statements. Such
forward-looking statements are subject to a number of risks,
assumptions and uncertainties that could cause Global Crossing's
actual results to differ materially from those projected in such
forward-looking statements. These risks, assumptions and
uncertainties include: the impact of Global Crossing's bankruptcy
proceedings on sales, customer and employee retention, supplier
relationships and operations; the ability to complete systems
within currently estimated time frames and budgets; the ability
to compete effectively in a rapidly evolving and price
competitive marketplace; possible reductions in demand for our
products and services due to competition changes in industry
conditions; changes in the nature of telecommunications
regulation in the United States and other countries; changes in
business strategy; the successful integration of acquired
businesses; the impact of technological change; and other risks
referenced from time to time in Global Crossing's filings with
the Securities and Exchange Commission.

CONTACT:  GLOBAL CROSSING
          Press Contacts
          Tisha Kresler
          Phone: + 1 973-937-0146
          Email: Tisha.Kresler@globalcrossing.com

          Kendra Langlie
          Latin America
          Phone: + 1 305-808-5912
          Email: Kendra.Langlie@globalcrossing.com

          Mish Desmidt
          Europe
          Phone: + 44 (0) 7771-668438
          Email: Mish.Desmidt@globalcrossing.com

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



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

AES CORP: Likely To Find Itself in Another Probe
------------------------------------------------
U.S. based AES Corp., which is still under investigation by the
Brazilian government over its purchase of Eletropaulo
Metropolitana SA, Latin America's biggest utility, is about to be
subjected to another investigation. This time, its purchase of
Cia. Geracao de Energia Eletrica Tiete, which generates power in
Brazil's largest state, will be under the magnifying glass.

According to a Bloomberg report, the Brasilia-based Economic Law
Secretariat, the investigative arm of the Ministry of Justice,
wants to determine whether AES and Enron had any contact prior to
the government's 1999 sale of Tiete. AES bought Tiete from the
government for US$471 million.

The government is currently investigating a Financial Times
report that AES persuaded Enron, once the largest energy trader,
not to bid in the 1998 auction for Eletropaulo. The agreement
helped AES and its partners win control of the Brazilian utility
for a minimum bid of US$1.78 billion.

Unlike the Eletropaulo sale, AES competed with another power
company, Belgium's Tractebel SA, for Tiete. AES ended up bidding
24% more than Tractebel for Tiete.

Enron's spokesman Mark Palmer in Houston and Ahmed Pasha, a
spokesman for Arlington, Virginia-based AES, said they were
unaware of any investigation of the Tiete sale.

Enron didn't bid on Tiete, and Palmer said he didn't know if
Enron expressed interest in the utility.


CELG: Signs New PPA With A Consortium of Companies
--------------------------------------------------
Brazil's Goias state distributor Celg signed a new power purchase
agreement (PPA) with a consortium of companies after it obtained
an injunction to cancel a 10-year power purchase agreement (PPA)
it signed with Cachoeira Dourada in 1997.

Under the new PPA, Celg will pay the MAE wholesale prices -
currently around BRL7 a megawatt hour (MWh), plus BRL5/MWh for
392MW a month during 2003. For 2004 and 2005, Celg will pay the
MAE price plus BRL18/MWh for an average of 381MW a month. Celg
will pay a maximum of BRL31.5/MWh, Celg commercialization manager
Jos‚ Carlos Zoccoli said.

This rate is just over half the BRL62/MWh that Celg was paying to
Cachoeira Dourada under the old contract. Chilean generator
Endesa owns Cachoeira Dourada.

TCR-LA earlier revealed that Brazil's power regulator Aneel last
month stepped in to resolve the Cachoeira Dourada dispute. Aneel
argued that the injunction does not only cost Cachoeira money,
but is also damaging the credibility of the Brazilian electric
sector.

"The granting of an injunction...puts in doubt the rules defined
for the national interconnected system to work, creating legal
uncertainty and instability," Aneel had said in its legal filing.

CONTACT:  COMPANHIA ENERGETICA DE GOIAS (CELG)
          Rua 2 - Qd. A-37 - Edificio Gileno Godoi
          Jardim Goias - Goiania - Goias
          Brazil
          CEP: 74805-180
          Phone:  (0XX62)   243-2222
          Fax:  (0XX62) 243-2100
          Email: celg@celg.com.br
          Home Page: www.celg.com.br/
          Contact:
          Jose Walter Vazquez Filho,  President
          Phone: (0XX62) 243-1001
          Samuel Albernaz, Administrative Director
          Phone: (0XX62) 243-1031
          Javahe de Lima, Economic-Financial Dir./Investor
                                                  Relations
          Phone: (0XX62) 243-1041


CELG: Reports $2.12M Profit In 1Q03
-----------------------------------
Celg posted net profits of BRL7.17 million (US$2.12mn) for the
first quarter, compared to losses of BRL31.1 million in the same
period last year, Business News Americas reports, citing Agencia
Estado.

By the same comparison, net revenue was up 4.5% to BRL245 million
while gross profits jumped 43% to BRL44.7 million. Operating
profits totaled BRL7.16 million. In the same period of 2002, Celg
posted operating losses of BRL30.5 million.

However, at the end of March, Celg's net equity was still in the
red by BRL276 million.


EMBRATEL: Wants Confirmation Delay on Brasil Telecom Build-out
--------------------------------------------------------------
Embratel, Brazil's long distance incumbent Embratel, is
petitioning telecoms regulator Anatel to delay any decision to
confirm that local telephony operator Brasil Telecom has met
build-out goals, Business News Americas reports. Brasil Telecom
announced on February 28 that it had met the goals. If Anatel
confirms the decision, Brasil Telecom will be able to cut into
Embratel's domain by offering national long distance services.


KLABIN: Signs Accord to Transfer Controlling Stake in Riocell
-------------------------------------------------------------
PUBLIC ANNOUNCEMENT - May 30, 2003

In accordance with Brazilian Corporate Law ("Instru‡ao CVM
n§358"), Klabin S.A. (Klabin) hereby informs its shareholders and
the capital markets that the Investment Agreement between Klabin
and Aracruz Celulose S.A (Aracruz) signed today will result in a
total transfer of shares of Riocell S.A. held by Klabin to
Aracruz.

The amount of the transaction is US$ 610.5 million. This amount
is still subject to adjustment until the date of the conclusion
of the deal, expected to occur in the next 30 days.

The transaction is included in the Strategic Planning of Klabin
and constitutes part of the financial restructuring that has
already been fully disclosed, and will result in a significant
reduction of its indebtness

Sao Paulo, May 30th, 2003

Ronald Seckelmann
CFO and Investor Relations Director


SABESP: Taps US, European Investors on Bond Sale
------------------------------------------------
Companhia de Saneamento B sico do Estado de Sao Paulo (Sabesp),
Brazil's largest water utility, will tap US and European
investors as it seeks to raise US$300 million in bonds.

Mauro Arce, the Sao Paulo energy secretary, admitted that Sabesp
tapped domestic markets before considering international
investors. However, debt maturities demanded by local banks made
a debenture offer unfeasible.

"We wanted to exchange debt in foreign currency for debt in local
currency, but we were stopped short by the maturity problem," he
explained. According to Mr. Arce, Brazilian institutions wanted
Sabesp paper to carry a one-year maturity while foreign investors
may agree to maturities of three years or more.

Sabesp will use part of the proceeds of the bond sale to settle a
US$200 million debt coming due July 15. The bond offer will be
lead-managed by UBS Warburg. The placement will be completed by
early July.

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: Insider Trading Taints Oi Deal
----------------------------------------------------------
Brazilian fixed line operator Telemar Norte Leste's recent
acquisition of mobile operator Oi aroused suspicions, with
analysts saying the price was too high, and the securities
regulator attesting to insider trading days before the
acquisition announcement.

Tele Norte Leste Participacoes (TNE), a telecommunications
holding company, announced on Wednesday it was "selling" Oi to
its fixed-line subsidiary Telemar for BRL1 real. Tele Norte Leste
said the transaction was undertaken to reduce Telemar taxable
income, as it will assume Oi's BRL4.8-billion (US$1.58 billion)
debt.

However, analysts suggested that the price per subscriber of
US$781 was irrationally high. And, since no change in control of
Oi resulted from the acquisition, Telemar had no reason to pay an
attractive premium to its own parent company, the analysts added.

Weeks before the acquisition was announced, evidence surfaced of
a leak to the market. Share trading of both TNE and Telemar was
more than double normal volumes. In May, preferential Telemar
shares registered 15 million trades, compared to 11 million as
its historic monthly average. The day before the acquisition 39
million trades were registered.

Brazil's securities and exchange commission, the CVM, is
investigating the acquisition. According to spokesperson for
Telemar, the Company recognized the securities commission's right
to investigate any deal, but that it considered the transaction
"successful and finished."

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

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

         Fax: 55 21 3131 1155


TELEMAR: Oi Acquisition Averts 1Q03 Losses
------------------------------------------
Brazilian fixed line operator Telemar would have posted a BRL9
million loss for this year's first quarter, instead of a BRL252
million net profit if the Company's acquisition of mobile
operator Oi was completed last year, Business News Americas
suggests. Telemar investor relations director Marcos Grodetzky
revealed that the Company bought 99.9 percent of Oi, because it
was losing subscribers to mobile services in the first quarter.

"In the US, fixed line traffic has fallen in the past two years,
while mobile traffic has grown by an equal proportion," said Mr.
Grodetzky, indicating that subscriber movement was global.

The Company lost some 130,000 subscribers to mobile services for
in first quarter alone, according to news agency Valor Online.


TUPY: Expects Exports To Contribute To Growth Despite WTO Ruling
----------------------------------------------------------------
Brazilian foundry Tupy projects that its exports will contribute
a great part to its expected growth this year. The Company is
confident that it will grow despite a World Trade Organization
ruling imposing antidumping duties of 34 percent on some of its
products. Presently, the Company is appealing this decision, is
"confident of victory", said head of marketing, Fernando Cestari
de Rizzo.

"Similar to what the first quarter already showed, the company
has the expectation to grow throughout 2003. The greater portion
of this growth will come from foreign markets, with the
consolidation of new contracts that are being put into
production," said Mr. De Rizzo.

Tupy, the largest foundry in South America, posted a BRL21.8
million net profit for this year's first quarter, despite the
odds.

"The devaluation of the real [against the US Dollar] in the
months of January and February positively impacted revenue, and
the appreciation in the month of March significantly reduced our
financial expenses for the quarter," explains Mr. De Rizzo.

According to Business News Americas, there were three reasons for
the increase in net profits, namely a 27 percent growth in sales
volumes, better operating results with Ebit margins increasing
from 11 percent in 1Q02 to 18 percent in 1Q03, and foreign
exchange fluctuations.

Tupy's 1Q043 results show a dramatic increase in profits compared
to its 1Q02 results, where its profit was only BRL2.94 million.

CONTACT:  Tupy SA
          Head Office
          Rua Albano Schmidt 3,400
          Boa Vista
          89206-900 Joinville - SC
          Brazil
          Phone: +55 47 441-8514
          Fax:  +55 47 441-8321
          Home Page:  http://www.tupy.com.br
          Contacts:
          Mario Fernando Engelke, Chairman
          Francisco Parra Valderrama, BOD Member
          Norberto J Hoffmann, BOD Member



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

ENDESA: Sells Transmission Lines To HQI Transelec For $110M
-----------------------------------------------------------
Chilean generator Endesa reached an agreement with local
transmission company HQI Transelec Friday to sell 958km of
transmission lines in the northern grid (SING) to the latter for
US$110 million, Business News Americas indicates.

Endesa generation subsidiary Celta sold 285km of 220kV lines for
US$32 million, while Endesa's 50%-owned generator GasAtacama
Generacion sold 673km of 220kV lines for US$78 million. Both
parts of the sale include respective substations.

US power company CMS owns the other 50% of GasAtacama.

Following the purchase, Transelec now owns 20% of transmission
assets in the SING. Transelec established a subsidiary, Transelec
Norte, to manage the new assets. The subsidiary will have a
capital of US$40 million.


INVERLINK: Creditors Agree To $582,000 Sale of Clinica Las Lilas
----------------------------------------------------------------
The board of creditors of intervened Chilean financial services
group Inverlink agreed to sell healthcare unit Clinica Las Lilas
to local medical association La Perva for CLP414 million
(US$582,000), Business News Americas reports, citing local daily
Estrategia. Market analysts believe that La Perva will need to
look for a strategic partnerships to finance the acquisition
procedure.

The board's decision follows a meeting with the group's
bankruptcy director Marcos Sanchez. The sale will see La Perva
taking on the clinic's liabilities as well as the commercial
accounts held by Inverlink Capitales estimated to total CLP1
billion.

Inverlink went into receivership in March after authorities
uncovered a web of fraud and espionage. Inverlink executives
stand accused of spying on the central bank, stealing US$95
million in CDs from industrial development agency Corfo, and
engaging in illegal transactions between group subsidiaries.


VTR: UGC Announces Successful Refinancing Completion
----------------------------------------------------
UnitedGlobalCom, Inc. (UGC or the Company) (Nasdaq: UCOMA)
announced Friday that its wholly owned subsidiary, VTR GlobalCom
S.A. (VTR), successfully completed the refinancing of its Senior
Secured Credit Facility (the Facility). Highlights of the
refinancing include an extension of the final maturity for
approximately 3.5 years to December 31, 2006 as well as covenant
and amortization schedules based upon VTR's business plan. In
addition, VTR repaid $15 million of the Facility (funded by UGC),
reducing the outstanding balance to $123 million. The interest
rate on the Facility has been reduced to LIBOR plus a spread of
5.5% compared to a previous spread of 6.5%.

As a result of the refinancing, VTR has secured a long-term
solution with respect to its capital structure and further
benefits from the stability provided by its low financial
leverage. As calculated in VTR's March 31, 2003 quarterly
compliance report for the Facility, its total debt to EBITDA
ratio(1) was 2.65 to 1 which is conservative compared to industry
standards. With cash and cash equivalents of approximately $20
million at that date, VTR does not anticipate the need for any
additional capital contributions from UGC.

About UnitedGlobalCom

UGC is the largest international broadband communications
provider of video, voice, and Internet services with operations
in 20 countries. Based on the Company's consolidated operating
statistics at March 31, 2003, UGC's networks reached
approximately 12.5 million homes passed and 8.9 million RGUs,
including over 7.4 million video subscribers, 695,600 voice
subscribers, and 791,200 Internet subscribers.

UGC's major operating subsidiaries include UPC, a leading pan-
European broadband communications company; VTR GlobalCom, the
largest broadband communications provider in Chile; and Austar
United Communications, a leading pay-TV provider in Australia.

Materials filed with the SEC will be available electronically
without charge at an Internet site maintained by the SEC. The
address of that site is http://www.sec.gov.Documents filed with
the SEC may be obtained from UGC by directing a request to
Richard Abbott, Vice President of Finance, UnitedGlobalCom, Inc.,
4643 S. Ulster Street, Suite 1300, Denver, CO 80237.

For further information, visit the company's web site at
www.unitedglobal.com.

(1) Defined in the Facility (as of March 31, 2003) as the total
of all outstanding debt (excluding shareholder loans) divided by
Adjusted EBITDA (defined as EBITDA excluding the monthly
management fee due UGC) for the past six months times two.



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

INAT: Government Signs Decree Supporting Successor Firm
-------------------------------------------------------
Soon-to-be-liquidated Colombian irrigation, drainage and flood-
control agency Inat already has a replacement. According to
Business News Americas, the national government issued a decree
allowing rural development institute Incoder to assume Inat's
responsibilities.

Inat, which has three years to fully liquidate, managed numerous
irrigation and sanitation projects for Colombia's agriculture and
rural development ministry. In April, Inat officials told
Business News Americas that bidding for projects under its
control were on hold until Incoder opens its doors.

As such, bidding for Inat's COP46.9-billion (US$16.1mn) Santo
Tomas el Uvito irrigation project is still at a standstill, after
stopping last year just as government planners decided to re-
evaluate project specifications and costs.


* Colombia's Debt Is At Its Highest Point, Warns Comptroller
------------------------------------------------------------
Colombia must find a way to slow the growth of its debt, the
country's comptroller general Antonio Hernandez Gamarra
suggested. The government official disclosed that Colombia's
foreign debt is at it highest at US$22 billion.

Mr. Gamarra suggested that the country start taking measures to
avert a crisis. The country should find ways like rescheduling
long-term payments to avoid a default in two years.

"We are going down a very dangerous path. Colombia certainly
cannot continue to increase its debt by 5 percent per year," he
said, as quoted by EFE News.

Mr. Gamarra warned that the country's total debt equals 53
percent of its gross domestic product, an "unusually high" ratio,
compared to only 14 percent in 1996.

Half of the country's US$22 billion in debt is owed to private
banks, and bondholders at interest rates above those of
multilateral lenders, EFE said.



=============
E C U A D O R
=============

PETROECUADOR: Delays Contract Details To End-June
-------------------------------------------------
Petroecuador has postponed a decision on the type of exploration
and production contract it will offer to private companies after
workers and some members of the board opposed the association
contract originally proposed. The Company's board met on Sunday
to discuss possible contract structures, after the proposed
contract structure met much opposition.

The Company's decision will be known by the end of June, instead
of the planned early June decision, relates Business News
Americas. The contract to be offered involves the Company's five
main oil producing fields: Sacha, Libertador, Auca, Lago Agrio
and Shushufindi.

The association contract proposal proposed by the energy ministry
met strong opposition, as this is tantamount to a privatization,
thus "giving away" the country's most important fields. The
contract proposes that private companies get 20-year contracts
with a 60 percent stake in production.

The workers are reportedly more amenable to an operating alliance
structure that is more transparent, said the report. Under this
proposal, the private company would recoup its investment over a
set period of time, after which Petroecuador would run the block.

A source told Business News Americas that Canadian, Japanese and
Korean companies are interested in this type of structure.

Workers at Petroecuador fear that the association contracts would
result in a dramatic increase in production costs. Local paper
Expreso reports that the Company's national workers association
(Fetrapec)has called for the resignation of energy minister
Carlos Arboleda over the association contracts.


===============
H O N D U R A S
===============

AT&T: Hondutel Suspends Interconnection On Nonpayment Of Dues
-------------------------------------------------------------
Regional carrier AT&T has temporarily lost its interconnection
with Hondutel, Honduras' state-owned fixed line operator, reports
Business News Americas on Thursday. Hondutel claims that AT&T has
outstanding debts dating back to 1982. AT&T reportedly owes
Hondutel some US$25 million, and has stopped paying
interconnection fees since August 2002.

However, AT&T disputes the actual amount owed, and claimed that
Hondutel owes it money instead.



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

C&WJ: Meets Caribtel In Court
-----------------------------
Cable & Wireless Jamaica met with fledgling telecoms company
Caribtel in Court yesterday over the issue of the latter's
regaining access to its toll free lines. RJRNews.Com reports that
Caribtel is seeking for $21 million in damages from C&WJ over its
inability to regain access to its toll free numbers, which are
the Company's primary method of placing international calls.

C&WJ is the only issuer of toll free numbers in the country.
C&WJ's monopoly over domestic and international telephone service
ended when market liberalization took effect last March.

Caribtel chief executive Courtney Betty said, "The court made an
initial order on the consent of both parties that no further
action be taken by C&W until June 2, when the court reconvenes.
We still will not have a toll free number in the interim."

In April, Caribtel attempted to end its routing relationship with
C&WJ, while trying to retain its toll free numbers. However, C&WJ
insists that Caribtel's cards can still be used without toll free
numbers.

CONTACT:  Cable & Wireless PLC
          124 Theobalds Road
          London
          England
          WC1X 8RX
          Phone:  +44 (0)20 7315 4000
          Fax:  +44 (0)20 7315 5000
          Home Page:  http://www.cw.com
          Contacts:
          Sir Ralph Robins, Non Executive Chairman
          Sir Winfried W. Bischoff, Non Executive Deputy
                                         Chairman
          Graham M. Wallace, Chief Executive
          Robert E. Lerwill, Executive Director Finance



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

ALESTRA: Extends Exchange Offer Deadline
----------------------------------------
Alestra, S. de R.L. de C.V. ("Alestra") announced Friday that the
deadline for its outstanding exchange offers, cash tender offers
and consent solicitations has been extended. The offers will
remain open until the new expiration date of June 11, 2003,
unless further extended by Alestra. Alestra is continuing to
negotiate with an ad hoc committee of noteholders regarding the
offers. The extension does not affect the terms of the offers.
Alestra also announced that approximately $144 million principal
amount of its outstanding 12 1/8% Senior Notes due 2006 had
tendered in the offers and that approximately $95 million
principal amount of its outstanding 12 5/8% Senior Notes due 2009
had tendered in the offers.

Copies of Alestra's prospectus and transmittal documents for the
offers can be obtained from the Information Agent: D.F. King &
Co., Inc., 48 Wall Street, New York, New York, 10005. Banks and
brokers call collect: (212) 269-5550. All others call toll free:
(800) 549-6697.

This announcement and the cash tender offers, exchange offers,
and consent solicitations which are the subject hereof are not
being made in any jurisdiction in which, or to any person to
whom, it is unlawful to make such announcement and/or cash tender
offers, exchange offers and consent solicitations under
applicable securities laws. The new senior notes may not be sold
nor may offers to buy be accepted prior to the time Alestra has
obtained the necessary authorizations from the Comision Nacional
Bancaria y de Valores de Mexico.

This release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall any sale of these
securities in Mexico or in any U.S. state or territory in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of Mexico
and any such U.S. state or territory.

This announcement shall not under any circumstances create any
implication that the information contained herein is correct as
of any time subsequent to the date hereof, or that there has been
no change in the information set forth herein or in the affairs
of Alestra or any of its affiliates since the date hereof. No
indications of interest in the offers are sought by this press
release.

Headquartered in San Pedro Garza Garcia, Mexico, Alestra is a
leading provider of competitive telecommunications services in
Mexico that it markets under the AT&T brand name and carries on
its own network. Alestra offers domestic and international long
distance services, data and internet services and local services.


BITAL: HSBC Seeks De-Listing As Volume Shrinks Near Zero
--------------------------------------------------------
A Wall Street-based analyst following Mexican banks applauded UK-
based banking giant HSBC's decision to de-list its Mexican
subsidiary Bital. Business News Americas recalls that HSBC, which
acquired 99.6% of Bital's shares last November for US$942
million, offered to buy-out the unit's remaining minority
shareholders as part of a move to de-list Bital.

"It makes sense" for HSBC to seek to de-list Bital because its
trading volume is very low and to keep it listed would only be
bureaucratic hassle for HSBC, the analyst told Business News
Americas.

HSBC's offer will last six months with the bank creating a trust
fund that will pay an expected US$4.6 million to buy the
remaining shares.

CONTACT:  HSBC Holdings PLC
          Head Office
          10 Lower Thames Street
          London
          United Kingdom
          EC3R 6AE
          Phone:  +44 (0)20 7260 0500
          Fax:  +44 (0)20 7260 0501
          Home Page:4  http://www.hsbc.com/
          Contacts:
          Sir John Bond, Executive Chairman
          Baroness Dunn, Joint Deputy Chairman
          K. R. Whitson, Chief Executive
          D. J. Flint, Executive Director Finance


GRUPO ELEKTRA: Slams Moody's Recent Ratings Decision
----------------------------------------------------
Grupo Elektra S.A. de C.V. (NYSE: EKT) (BMV: Elektra*) management
has expressed disappointment with Moody's decision to downgrade
its debt rating and a great concern over its blatant failure to
understand and assess the company's business, from its operations
to its financial structure.

Grupo Elektra believes that the rating agency's inability to
perform a thorough analysis of the company is, in part, related
to its unwillingness to discuss with management its operations
and financial projections.

The company understands that its business is complex, which is
why it has always expressed a willingness to open up its
operations so that the financial community is completely capable
of understanding its business, piece by piece.

Management recognizes the fact that the incorporation of Banco
Azteca increases its complexity. But understanding this change
should be within the means of the financial professionals that
make up a ratings agency. While it is true that the creation of
Grupo Elektra's bank subsidiary, Banco Azteca, represents the
most significant change in Grupo Elektra's financial structure in
its recent history, the company is confident that this step is
clearly positive.

Most notably, the bank will allow the group to eliminate its
largest growth restriction, which has historically been access to
low-cost capital for its credit operations. Capital resources can
now be focused on improving operational efficiencies.

Access to lower-cost capital has allowed Grupo Elektra to reduce
a substantial amount of debt, and replace expensive and risky
dollar-denominated debt for less expensive and safer debt in
pesos. The company's financial operations, an important source of
profitability for the group, are being transferred to the bank,
which is by definition an unrestricted subsidiary. However, Grupo
Elektra is confident that the benefits of these changes far
outweigh the risks that they imply.

Nevertheless Moody's appears to be focusing on the risks without
taking into account the benefits, at the expense of investor
interests. Banco Azteca is a business that, after eight months of
operations, has surpassed market expectations in every aspect,
including those previously expressed by Moody's. This success has
created, and will continue creating, substantial economic value
for all Grupo Elektra stakeholders, something that Moody's still
fails to recognize.

This is why Grupo Elektra regrets Moody's recent decision to:
downgrade its senior unsecured guaranteed notes from B3 to B2;
downgrade its senior unsecured issuer rating to Caa1 from B3; and
to put these ratings under negative outlook. Grupo Elektra's
financial position is clearly and substantially more solid than
what Moody's definitions for these ratings suggest.

According to the press release released by Moody's on May 27 of
2003, the arguments to sustain its decisions are based on: (1) a
loss of value of the guarantee of outstanding debt issues; (2) a
loss of profitability of Grupo Elektra's non-banking business;
(3) an inability to improve Grupo Elektra's debt profile; (4) a
lack of long term committed credit facilities and; (5) funding
issues and startup costs of Banco Azteca. Finally Moody's has put
the company's debt instruments under negative outlook citing
concerns that (6) Azteca Holdings could have a negative effect on
Grupo Elektra's finances, among other.

In management's view, these arguments are based on a weak and
slanted analysis of Grupo Elektra. It should be noted that it is
Grupo Elektra as whole that is the ultimate guarantor of its
bonds. The company has a wide array of valuable assets, including
a strong cash position, growing retail operations, full ownership
of Banco Azteca, a start-up pension management business and an
18.3% economic interest in TV Azteca, the second largest Spanish-
language content producer in the world, and an extensive real
state portfolio worth over US$130 million.

The company has addressed Moody's arguments, point by point.

(1) Moody's has asserted that "the lowered rating of the senior
notes reflects the loss of the guarantee from the profitable
retail credit business."

However, the agency has done little to demonstrate this loss. As
it has been thoroughly explained by company management, the
creation of Banco Azteca required the transfer of the Grupo
Elektra credit-related assets to the bank, which by law is an
unrestricted entity. However, all the costs and expenses
associated with the credit operations are also being passed to
Banco Azteca, a process that will continue throughout the year,
and that will be ultimately reflected in the retailer's P&L as
the company has thoroughly explained to the markets; Moody's has
continuously failed to understand this. And while Banco Azteca,
by law cannot be a direct guarantor, its equity is a direct
guarantee with excellent growth and profitability perspectives.

Grupo Elektra, with all its assets, remains the guarantor of the
instruments subject to Moody's unwarranted ratings change, and
generated around US$300 million in trailing 12-month EBITDA up to
the first quarter of this year, a comfortable level to service
approximately $70 million in total annual debt interest. As
Moody's correctly observes, part of this EBITDA will eventually
be transferred to the bank. Nevertheless company projections
indicate that less than a third of this figure will ultimately be
transferred.

Grupo Elektra is a highly liquid company, with over US$200
million in cash holdings as of the first quarter of 2003. It is
important to note that Grupo Elektra's debt offers additional
primary guarantees through an indirect position in TV Azteca's
equity with a value to Grupo Elektra estimated at US$210 million,
at current market prices.

(2) Next, Moody's claims that "guarantor operations may not be
more than nominally profitably on a stand-alone basis" and that
"Elektra's profitability is likely to remain constrained as a
result of market conditions for consumer products and startup
costs for the new bank."

The company feels that, contrary to this judgment, the bank is
one of the best ways to fuel growth to its retailing operations
by eliminating a very substantial capital constraint.

The argument that the retailer is not a profitable business was
presented in a prior Moody's analysis and has since been proven
clearly incorrect -see "Moody's Downgrades Grupo Elektra's Senior
Notes to B2; Continues Review For Possible Downgrade", November
13, 2002. As it has been asserted above, the commercial business
is expected to generate over US$200 million of EBITDA annually.
Preliminary figures for the industry suggest that market share of
the company has increased over the first four months of the year.
Management's expectations are for a 10% increase in Grupo
Elektra's commercial business in real terms this year.

As management has extensively explained to the market, and
clearly to Moody's, the bank eliminates a significant barrier to
growth by freeing up resources that can now be directed to
improving efficiencies and fueling growth through new
distribution centers; stronger IT investments; further store
openings and remodeling; as well as new products and services.
Some of these benefits are already apparent. Today, Grupo Elektra
offers the best cash prices and credit terms in the market, which
partly explains the company's recent market share gains. Recent
changes have allowed the retailer to significantly improve its
profitability by increasing its trailing 12-month EBITDA margin
180 basis points from the first quarter of 2002 to the same
quarter of this year.

(3) Next, Moody's mistakenly states that "Elektra is unlikely to
significantly de-lever in the near future."

This suggests that the rating agency is willingly ignoring the
substantial effort that management has made and will continue to
make to improve the company's debt profile.

Not only has Grupo Elektra already reduced its debt position in
recent months, but it has also improved the funding conditions
for its remaining debt. This year the company has retired US$167
million in dollar-denominated debt. A lesser portion of this debt
has been refinanced in peso-denominated instruments, with a less
than one-year maturity, and 190 basis points above the inter-bank
rate, which at current market conditions is below 8%. Management
expects to reduce Grupo Elektra's debt position by a range of
US$130 and US$150 million by the end of 2003. Net debt has been
cut from US$197 million at the end of 2002 to US$144 million as
of April 30, 2003, a 27% reduction.

(4) In a puzzling observation Moody's views as a concern a "lack
of long- term committed credit facilities."

With the exception of the long term-syndicated loans of US$150
million and US$130 million that have been amortized, the company
has never had a long-term credit facility. Concurrent with the
launch of Banco Azteca, Grupo Elektra has stopped its
securitization operations. The program still exists if it were
needed. The securitizations were the best option in the past to
finance Grupo Elektra's large capital requirements arising from
its consumer finance business. However, banks have access to an
array of low-cost instruments such as deposits, banking bonds,
certificates of deposit, as well as Central Bank funding, which
is why management considers the bank to be the most adequate
vehicle to fund its consumer credit operations over the long
term. It is ironic that the Bank is dismissed by Moody's as a
credit source, when in fact it is the primary advantage that it
brings to Grupo Elektra.

(5) Moody's later weakly suggests that "ratings could decline if
Elektra or Banco Azteca experience funding issues ... "

However, we expect Banco Azteca's future additional capital
requirements to be none or very small going forward.

The start-up costs of the bank have already been disbursed and
fully amortized. To date Grupo Elektra has capitalized the bank
with over US$50 million. Banco Azteca has a capitalization ratio
well above international standards. Going forward, it is clear
that Banco Azteca will be able to fill capitalization needs
through the profitability of its operations.

(6) Finally Moody's confusingly states that "the rating outlook
is negative, reflecting the potential for further rating
downgrades in the near to medium term. The use of the interbank
market by Banco Azteca has increased Elektra's sensitivity to
market confidence. Elektra is indirectly an owner of about 27% of
Azteca Holdings, the parent company of Mexico's second largest
television network. Azteca Holdings' un-guaranteed notes have
recently been downgraded to Caa2 following an exchange for a
portion of the note issue, reflecting a high potential for a
default on the exchanged and remaining notes in the near to
medium term. A default by Azteca Holdings, or financial distress
by other affiliated entities could affect market confidence and
potentially reduce funding flexibility for Banco Azteca or Grupo
Elektra."

Firstly, management does not see why the entrance of Banco Azteca
to a funding source not previously available to the retailer
increases Grupo Elektra's sensitivity to market confidence. The
company feels that the availability of inter-bank funds and
inexpensive core deposits gives Grupo Elektra much more autonomy
rather than making it more sensitive to market conditions. Growth
in deposits has outstripped lending growth, and core deposits now
represent almost two-thirds of the bank's total credit portfolio.
The company's expressed objective is to be able to fully fund its
credit portfolio with deposits within the next 15 to 20 weeks. At
current deposit growth rates, this is clearly feasible, and
Moody's should be aware of this.

As for the Azteca Holdings argument for putting Grupo Elektra's
ratings in negative outlook, it should be said that Azteca
Holdings, of which Elektra has a 32% not a 27% indirect
participation, has no recourse to Grupo Elektra. It should also
be noted that the restricted basket covenant keeps Grupo Elektra
from carrying out such kind of transactions. Additionally it is
highly unlikely that such a move would be approved by the
entirely independent Related Party Transactions Committee of the
company's Board of Directors. As for the possibility of Banco
Azteca ever funding Azteca Holdings, such a move is strictly
regulated by banking authorities' stiff capitalization rules. And
this should be already clear to Moody's qualified banking
analysts.

The company has stressed that Moody's public statement of last
November never materialized. "Lower operating profits and profit
margins", were reverted; "increasing competition from other major
retailers, some of which are offering more competitive credit
terms" never took place, as Elektra's recent market share gains
suggest; "the conversion of a sizable number of THE ONE stores to
Elektra formats cause some cannibalization" also never took place
as indicated by the fact that these stores are highly profitable;
finally, "the uncertainty about the long term resolution" of the
company's high telephone inventory level has quickly been
corrected, as thoroughly explained to the market and predicted by
management.

Based on what is hereby stated, Grupo Elektra considers that
Moody's decision is irresponsible, unwarranted, and that it does
not reflect its solid financial position. Seemingly the market
has also a contradictory view on Moody's ratings revision, as the
22.11% appreciation of its bonds over the last four months
indicates.

More information is available on the corporate Website at
www.grupoelektra.com.mx.

Grupo Elektra is Latin America's leading specialty retailer,
consumer finance and banking services company. Grupo Elektra
sells retail goods and services through its Elektra, Salinas y
Rocha and Bodega de Remates stores and over the Internet. The
Group operates almost 900 stores in Mexico, Guatemala, Honduras
and Peru. Grupo Elektra also sells and markets its consumer
finance and banking products and services through its Banco
Azteca branches located within its stores. Financial services
include consumer credit, money transfers, extended warranties and
savings accounts.

CONTACT:  Investor and Press Inquiries:
          Esteban Galindez, CFA
          Director of Investor Relations
          Phone: +52 (55) 8582-7819
          Fax: +52 (55) 8582-7822
          Email: egalindez@elektra.com.mx

          Rolando Villarreal
          Investor Relations
          Phone: +52 (55) 8582-7819
          Fax: +52 (55) 8582-7822
          Email: rvillarreal@elektra.com.mx


GRUPO IUSACELL: Lack of Funds Makes $25M Payment Unlikely
---------------------------------------------------------
Grupo Iusacell SA, Mexico's third-largest mobile phone operator,
failed to agree on future capital to be provided by Verizon
Communications Inc., its controlling shareholder. As such, the
Company, which is Mexico's third-largest mobile phone operator,
will miss a US$25-million interest payment on Monday.

Standard and Poor's earlier revealed that the Company has only
US$5 million to pay the coupon on US$350 million of the 14.25%
bonds maturing in 2006.

"With no new credit line, the Company will probably default,"
said Robert Rauch of Gramercy Advisors LLC and Steven Persky of
Dalton Investments LLC, holders of Iusacell's 10 percent bond due
in 2004 that's worth $150 million.

"I would bet very heavily that the company will not pay," said
Mr. Persky, a managing partner at Dalton Investments. "I don't
see that to be in anyone's interest except the holders of those
bonds and they're not in a very senior or compelling position."

Meanwhile, Russell Olson, Iusacell's finance director, told
Reuters that the Company continues to be in talks with creditors

"We continue to work with our creditors, preparing various
scenarios," said Mr. Olson. "We are trying to work more with our
2006 bond holders."

Mr. Olson said in the next few weeks, Iusacell hoped to announce
a restructuring deal. The executive revealed that cash on hand
has now risen to more than US$15 million and that if the Company
did not pay the US$25-million interest, it would technically not
be in default.

"Technically, we have 30 days after the due date before being in
a situation of default, that being the hypothetical case of not
paying," Olson said.

US-based Verizon and UK's Vodafone are the Company's majority
shareholder with 37.2% and 34.5% stakes, respectively.

CONTACT:  GRUPO IUSACELL, S.A. DE C.V.
          Investor: Russell A. Olson, Chief Financial Officer
          Tel: +5255-5109-5751
          Email: russell.olson@iusacell.com.mx

          Carlos J. Moctezuma,
          Manager, Investor Relations
          Tel: +5255-5109-5780
          Email: carlos.moctezuma@iusacell.com.mx



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

MINERA VOLCAN: OK's Glencore Due Diligence Visit
------------------------------------------------
Peruvian zinc miner Minera Volcan gave the green light for a
visit from tin miner Minsur and Swiss-based Glencore
International, reports Business News Americas. The two companies
will study operations ahead of a possible investment.

The report said that Volcan is in need of a strategic partner to
help it cope with financial woes brought by the decline in world
zinc prices. The Company had a 2002 net loss of PSS40.7 million,
more than its PSS35.2 million loss in 2001.

Brazil's Paraibuna de Metais, part of the industrial conglomerate
Votorantim, has also paid Volcan a visit, but has not announced a
decision on whether it would invest in Volcan, or not.

Volcan was a small zinc miner until 1997, when its output began
to soar after it bought the mining unit Mahr Tunel at a
privatization sale and later the Paragsha mine, formerly Cerro de
Pasco. But the acquisition of those units, from state-owned
Centromin, helped Volcan wrack up large debt, said the report.

On Thursday's trading, the Company's shares closed at PSS0.34,
gaining 6.25 percent.

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



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

BWIA: Barely Hanging On, Pins Hopes on Government Aid
-----------------------------------------------------
It is no secret that Trinidad and Tobago flag carrier, British
West Indies Airways, is financially against the ropes.  In
January, the company sent home more than 600 employees to cut
cost and, a little after that, served the government with a
request for additional aid.

Although widely known to be on the edge for some time now, only a
few in this country of a little over a million people think the
company will ever fall off the cliff.  The reason: The government
will never allow it. Generating TT$400 million in tax revenues a
year, the company is easily the government's largest benefactor.

Last week, however, this specter of impregnability took a
shattering blow. Aircraft leasing firm, International Leasing
Finance Corporation, which had already seized two Boeing 737s,
threatened to confiscate four other rented planes.  Suddenly, the
company came face to face with its worst nightmare -- closure.

Flashback

Privatized in 1995, the airline is a prime example of a
'corporate toddler' that refuses to grow up.  Its over-dependence
on state aid is almost innate, a fact made worse by a government
too willing to tolerate it.

In an interview with The Trinidad Guardian about two months ago,
an unnamed long-time director refused to blame bad management for
the company's latest woes.  He also rejected insinuations that
the company has been living on government dole outs.

In fact, he said, since the arrival of CEO Conrad Aleong, the
company has seen steady growth in earnings.  He pointed out that
had it not been for the September 11 terrorist attacks, the
company would have recorded its fourth straight net profit in
2001.

He further stressed that the government is obligated to bailout
the carrier because it is practically a utility that is as
critical to Trinidad and Tobago as railways are to countries like
Great Britain.  He said it is incumbent upon the government to
ensure that there are affordable air links between Trinidad and
Tobago and the outside world.

Government Toleration

Less than a year ago, the government earmarked US$13 million to
bail out the airline.  This, on condition that the company
implement a restructuring plan that will include rationalization
of its fleet and redundancy of 600 employees.  The goal was to
save at least US$1.4 million in operating expenses a month.

The redundancy was carried out, alright; but it is anybody's
guess why the company ended up asking the government lately to
absorb as much as 49% of its debt.

To its credit, the government has demanded a complete review of
the company's business plan as precondition to giving additional
aid.  To his credit, too, Mr. Aleong has pledged to step down and
even give up one-half of what is due him, if this is necessary to
keep the airline flying.

But Trinidad & Tobago Planning Minister Keith Rowley recently
noted the government only owns 33.5 percent of the airline, which
means that it cannot fire the CEO.  Alas, he also pointed out
that the real issue is saving the carrier and not whether Mr.
Aleong should be kept or not.

Bailout Likely

If there's any indication that the government will again come
through for the airline, it is this: It has already given the
International Leasing Finance Corporation a US$5 million letter
of comfort.  Although the ILFC ignored this guarantee and
proceeded to set a May 27 deadline for the payment of US$5.5
million, it is thought that the government will cough up the
money if needed or provide more guarantees to satisfy the
creditor.

In addition, any argument for or against a bailout would have to
answer the ultimate question: Can the government do without BWIA?

The answer is never in doubt in Mr. Aleong's mind, as he reminded
everyone recently: "We still spend $400 million a year in this
country."



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

* Fitch Rates Uruguay's US$3.4B New Bond Issue 'B-'
---------------------------------------------------
Fitch Ratings, the international rating agency assigned Friday
long-term foreign currency ratings of 'B-' to Uruguay's US$3.4
billion in new sovereign bonds issued in a comprehensive debt
exchange. The 'B-' rated bonds are listed at the end of this
release. Fitch Ratings had deemed the exchange offer to be a
distressed debt exchange and downgraded the eligible bonds to
'DDD' on May 16; eligible bonds will retain the default rating
until June 16, when those not extinguished will be removed from
default if the government is committed to servicing them on time
and in full. The Outlook for the new bonds is Stable.

Overall, Uruguay's credit profile is improved by the exchange, as
rollover risk is diminished. Most other fundamental credit
concerns remain, however. Public sector debt is very high at
about 92% of GDP and it is denominated almost entirely in foreign
currency. The banking sector continues to be vulnerable given
limited resources to provide emergency liquidity and the high
level of dollarization. Proposals to restructure banks' dollar
loans to private debtors would further impair financial sector
stability. Medium-term growth prospects remain below average,
although 2004 GDP growth could reach 4% as the economy stabilizes
following the large contraction in the second half of last year.
Improving fiscal balances will require significant reforms to
public finances, an unlikely prospect before next year's national
elections.

Political uncertainty and noise associated with the elections may
also leave the economy vulnerable to confidence shocks. Finally,
Uruguay has strong trade and investment links with Argentina and
Brazil, and uncertainties about the outlook for both neighbors
continue in spite of recent confidence improvements in Brazil and
the completion of elections in Argentina.

A sovereign comment with further analysis 'Uruguay After the
Exchange' will be available next week on the agency's web site,
'www.fitchratings.com'.

New bonds rated 'B-' are:

Maturity Extension Bonds:

--7.875% Bonds due 2008 (USD)

--Floating Rate Notes due 2009 (USD)

--Floating Rate Notes due 2010 (USD)

--Floating Rate Notes due 2010 (GBP)

--8.375% Bonds due 2011 (USD)

--Convertible Floating Rate Notes due 2012 (USD)

--7.00% (UF) Notes due 2010 (CLP)

--7.00% Notes due 2012 (EUR)

--7.00% Bonds due 2013 (USD)

--7.875% Bonds due 2014 (USD)

--7.25% Bonds due 2014 (USD)

--8.75% Bonds due 2015 (USD)

--6.375% (UF) Notes due 2016 (CLP)

--7.625% Bonds due 2017 (USD)

--7.00% Notes due 2019 (EUR)

Benchmark bonds:

--7.25% Bonds due 2011 (USD)

--7.50% Bonds due 2015 (USD)

--7.875% PIK Bonds due 2033 (USD)

Japanese Yen Bond:

--2.5% Bond due 2011 (JPY)

CONTACT:  Morgan C. Harting
          Phone: +1-212-908-0820
             or
          Roger M. Scher
          Phone: +1-212-908-0240
          New York

          Media Relations:
          Matt Burkhard
          New York
          Phone: +1-212-908-0540



               ***********


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

Troubled Company Reporter Latin American is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Oona G. Oyangoren, Editors.

Copyright 2003.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
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Information contained herein is obtained from sources believed to
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* * * End of Transmission * * *