TCRLA_Public/030612.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

          Thursday, June 12, 2003, Vol. 4, Issue 115

                           Headlines

A R G E N T I N A

AEROPUERTOS ARGENTINA: Government Voids Renegotiated Contract
DE PAOLA HERMANOS: Files for "Concurso Preventivo"
EDEERSA: Entre Rios Government Likely To Assume Debt
EDENOR: S&P Confirms `D' Rating Assigned to $600M Debentures
EUROMAYOR: $10M in Bonds Get Default Ratings From Fitch

EUROMAYOR: Various Bonds Rated `CCC(arg)' by Fitch Argentina
GAS ARGENTINO: Fitch Rates $130M of Bonds `D(arg)'
GF GALICIA: Expresses Optimism Profits Will Return This Quarter
HIDROELCTRICA PIEDRA: Fitch Rates Trusts `D(arg)'
HIDROELCTRICA PIEDRA: Gets `D(arg)' Ratings From Fitch

HIDROELECTRICA PIEDRA: Gets Default Ratings From Fitch
MADET: Seeks "Concurso Preventivo"
METROGAS: Argentine Fitch Issues Ratings to Bonds, Stocks
MULTICANAL: Must Conclude Debt Restructuring Efforts By Friday
TELECOM ARGENTINA: $3.4B Of Bonds Get `D(arg)' from Fitch

TELEFONICA HOLDING: Fitch Rates Bonds `CCC(arg)'; Stocks, `3'
TOWER RECORDS: Has New Owner

* World Bank Latin America Chief Optimistic On Argentine Recovery


B E R M U D A

GLOBAL CROSSING: Court Gives Clearance to Bitro Settlement Pact


B R A Z I L

CEMIG: Mirant Retains Control Despite Stake Sale
CEMIG: May Sell Off Infovias Stake
CORSAN: Moody's Places Ratings On Review For Possible Downgrade
EMBRATEL: Legal Director Makes Exit
GERDAU: S&P Assigns `BB' to $350M Bank Facility

TUPY: Invested $25M For Improvements At Maua Plant
VARIG: Employees Oppose Merger With TAM


C H I L E

COEUR D'ALENE: Expands Exploration Results in South America


C O L O M B I A

SERVIMAG: Water Utility Makes Rescue Offer


D O M I N I C A N   R E P U B L I C

INTERCONTINENTAL DE SEGUROS: Regulator Confirms Intervention


E C U A D O R

PETROECUADOR: Strike Reduces Crude Transport


M E X I C O

CFE: Gives Investors More Time To Submit Bids For Yucatan Project
GRUPO ELEKTRA: Deutsche Bank Recommends "Buy"
TV AZTECA: Announces Intention to Sell Content To Channel 10


T R I N I D A D   &   T O B A G O

BWIA: Government Delivers Ultimatum
BWIA: Zwaig Consultants Studying Troubled Airline


V E N E Z U E L A

PDVSA: Court Won't Reinstate Warrants For Strike Leaders

     -  -  -  -  -  -  -  -

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

AEROPUERTOS ARGENTINA: Government Voids Renegotiated Contract
-------------------------------------------------------------
The Argentine government has decided to annul the decree that
established the renegotiation of the airport's concession
contract.

Furthermore, from now on, if Aeropuertos Argentina 2000 (AA2000)
-concessionaire of the country's 33 air stations - breaches the
previous contract, its concession agreement may be canceled. In
this case, Argentine President Nestor Kirchner is determined to
call for a new tender process in order to award the concession
for the administration and operation of the airports currently
managed by AA2000.

The decision regarding the contract renegotiation is based on an
investigation carried out by Judge Alfredo Bustos, who ruled the
suspension of the renegotiated contract a week ago. The new
contract approved by former president, Eduardo Duhalde, on May 22
contemplated a significant reduction of the annual AA2000
Treasury payment.

AA2000 owes the government some ARS358 million (US$126 million),
debt that is under legal dispute.


DE PAOLA HERMANOS: Files for "Concurso Preventivo"
--------------------------------------------------
De Paola Hermanos S.A. has applied for "concurso preventivo" at
Lomas de Zamora Court NO. 14, under case number 30520273413.
The Company, which is involved in the production of milk and
milk-related products, is seeking permission to reorganize
itself.

The Court assigned Mr. Carlos A. Ceccarelli as receiver for the
proceedings. Mr. Ceccarelli is instructed to present the
individual report on August 12, 2003, while the general report is
due on September 22, 2003.

The deadline for verification of claims is June 26, 2003.


EDEERSA: Entre Rios Government Likely To Assume Debt
----------------------------------------------------
The transfer of shares owned by U.S. energy company Public
Service Enterprise Group Inc. (PSEG) in an Argentine electricity
generator in the eastern province of Entre Rios to a local trust
fund may create a problem for the Entre Rios government, Clarin
suggests.

PSEG transferred its shares in Edeersa to an Argentine trust fund
benefiting current Edeersa employees, including existing
shareholders, following a decision to abandon the country due to
increasing losses caused by rising debt costs and frozen
electricity rates.

The shares will remain in the trust fund for five years, after
which they will be distributed amongst Edeersa's 352 employees
and board members according to a pre-determined formula.

The sticking point is that Edeersa has an US$80-million debt with
international banks, which it defaulted on during the beginning
of 2002.

If a court denies the transfer of Edeersa to the new owners, the
province will have to take on 51% of the shares of the
distributor. As a result, the Entre Rios Government will again
become the new owner of Edeersa. As such, the government will
have to be responsible as well, 51% of the unpaid obligations
that PSEG has left.


EDENOR: S&P Confirms `D' Rating Assigned to $600M Debentures
------------------------------------------------------------
The Argentine arm of credit ratings agency Fitch Ratings
confirmed the D local-scale rating assigned to US$600 million
debentures issued by distributor Edenor, Business News Americas
reports, citing a Fitch statement.

Edenor defaulted on its debts in September last year following
the government's rate freeze and pesofication of contracts, and
the peso's 70% devaluation.

Edenor now has a stable cash flow. Despite that, Fitch believes
that the Company remains at the mercy of inflation, peso
devaluation, energy demand and unrecoverable debt.

At the end of March this year, Edenor's financial debt totaled
US$125mn, of which two debenture series make up 60%. The Company
is currently negotiating with its creditors to restructure its
debt.

Edenor, which is 51%-owned by holding company Easa, has over 2.2
million clients in the northern part of capital city Buenos
Aires.

CONTACT:  EDENOR S.A.
          Azopardo Building
          Azopardo 1025 (1107) Capital Federal
          Phone: (54-11) 4346-5000
          Fax: (54-11) 4346-5300
          E-mai: to ofitel@edenor.com.ar
          Home Page: http://www.edenor.com.ar


EUROMAYOR: $10M in Bonds Get Default Ratings From Fitch
-------------------------------------------------------
Corporate bonds issued by Euromayor S.A. de Inversiones received
default ratings from Fitch Argentina Calificadora de Riesgo S.A.
last Wednesday.

Classified under "series and/or class", US$10 million worth of
the company's bonds were rated `D(arg)'. Fitch said that the
rating is given to financial commitments that are currently in
default. The ratings were issued with consideration to the state
of the Company's finances as of the end of January 2003.

The National Securities Commission of Argentina described the
concerned bonds as "primera serie por 10 millones de US$ dentro
de un Programa Global." The bonds matured in April 2003.


EUROMAYOR: Various Bonds Rated `CCC(arg)' by Fitch Argentina
------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. assigned junk ratings
to various bonds issued by Euromayor S.A. de Inversiones, relates
the National Securities Commission of Argentina.

The bonds were assigned a `CCC(arg)' rating which denote that the
obligations have extremely weak credit risk relative to other
issues in Argentina. Fitch said that the Company's capacity to
meet its financial obligations ion this debt is solely reliant on
favorable business and economic conditions.

The concerned bonds include ARS4.4 million of bonds called "Serie
II Clase pesos" and US$3 million of "Serie II Clase dolares",
both sets that matured on Tuesday. The rating also applies to
US$3 million of "Serie I Clase dolares" and ARS6.8 million of
"Serie I Clase pesos", both of undisclosed maturity date.

The ratings were issued last Wednesday, and were based on the
Company's finances as of January 31, 2003.


GAS ARGENTINO: Fitch Rates $130M of Bonds `D(arg)'
--------------------------------------------------
Gas Argentino S.A.'s corporate bonds were rated `D(arg)' by Fitch
Argentina Calificadora d Riesgo last Wednesday.

According to the National Securities Commission of Argentina,
US$130 million worth of bonds called "Obligaciones negociables
simples por U$S 130.000.000" received the junk rating. The said
bonds, classified under "Simple Issue", matured on June 7, 2000.

Fitch said that the rating, based on the Company's finances as of
the end of March 2003, is given to financial obligations that are
currently in payment default.


GF GALICIA: Expresses Optimism Profits Will Return This Quarter
---------------------------------------------------------------
Argentine financial group Grupo Financiero Galicia, which was
hardly hit by the Argentine crisis that erupted in late 2001,
expects to return to profits as early as this quarter, says
Business News Americas.

The group, due to its aggressive cost cutting this year and last,
and a proactive approach to capturing new deposits, managed to
narrow losses to ARS58.6 million in the first quarter of this
year from a whopping ARS2 billion in the comparable period of
last year.

Galicia is also making progress in its debt-negotiations with
some 200 international creditors, which it owes US$1.1 billion. A
spokesperson said that talks are going "very well" but would not
provide any details on when a final agreement could be signed.

GF Galicia is mainly seeking to convince its creditors to extend
the terms of the debt-maturities, the spokesperson revealed.

CONTACT:  GRUPO FINANCIERO GALICIA
          Teniente General Juan D. Peron 456, Piso 3
          1038 Buenos Aires, Argentina
          Phone: (54 11) 4343 7528 / 9475
          Web site: http://www.gfgsa.com
          Contacts:
          Eduardo J. Escasany,  Chairman and CEO
          Sergio Grinenco, CFO, Banco de Galicia y Buenos Aires


HIDROELCTRICA PIEDRA: Fitch Rates Trusts `D(arg)'
--------------------------------------------------
Hidroel‚ctrica Piedra del Aguila Financial Trust Serie I y II was
rated `D(arg)' by the Argentine arm of Fitch Ratings Agency.

The National Securities Commission of Argentina relates that the
debt security, series no. 1 and 2 received the ratings. These
securities, worth a total of US$94.37 million, mature on December
31, 2009.

Fitch says that `D(arg)' ratings are issued to financial
obligations that are currently in payment default.


HIDROELCTRICA PIEDRA: Gets `D(arg)' Ratings From Fitch
-------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. assigns default
ratings to US$62.5 million worth of Hidroel‚ctrica Piedra del
Aguila's debt security, relates the National Securities
Commission of Argentina.

The security, described as "Series 3 & 4" mature on June 30,
2009. According to the ratings agency, the `D(arg)' rating is
given to financial commitments that are currently in default.


HIDROELECTRICA PIEDRA: Gets Default Ratings From Fitch
------------------------------------------------------
A total of US$35 million of Hidroelectrica Piedra del Aguila's
debt security were rated `D(arg)' by Fitch Argentina Calificadora
de Riesgo SA.

The rating means that the Company is not meeting its financial
obligations on these debt securities.

The country's National Securities Commission relates that the
Series 5 bonds mature on December 29, 2023.


MADET: Seeks "Concurso Preventivo"
----------------------------------
Madet S.A. presented a petition for "concurso preventivo" at a
Buenos Aires Court, relates local paper La Nacion. If the
petition is approved, the Company may start reorganization
proceedings.

Buenos Aires Court No. 6, under Dr. Ferrario and Secretary No.
12, under Dr. Mendez Sarmiento are handling the case.

The Company ceased paying its debts in March 2001.

CONTACT:  MADET S.A.
          1381 Marcelo Torcuato de Alvear
          Piso 10
          Buenos Aires


METROGAS: Argentine Fitch Issues Ratings to Bonds, Stocks
---------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. assigned `D(arg)'
ratings to corporate bonds issued by Metrogas S.A., relates the
National Securities Commission of Argentina.

Bonds, which the NSC described as "obligaciones negociables
simples" worth a total of US$600 million, received the ratings.
The rating was based on the Company's financial situation as of
March 31, 2003.

At the same time, Fitch also rated the Company's stock, described
as "Acciones Ordinarias Clase "B"" , `3', meaning it has average
quality.

CONTACT:  METROGAS, S.A.
          Gregorio Araoz de Lamadrid 1360
          Buenos Aires
          Argentina
          CPA C 1267
          Phone: +54 11 4309 1010
          Fax:  +54 11 4309 1025
          Home Page; http://www.metrogas.com.ar
          Contact:
          William Harvey Alvarez, President


MULTICANAL: Must Conclude Debt Restructuring Efforts By Friday
--------------------------------------------------------------
Argentine cable-television company Multicanal SA has until Friday
to conclude debt-restructuring efforts following a series of
extensions in recent months.

Dow Jones recalls that Multicanal, which defaulted in early 2002
on its US$524.8 million in total debt held by institutional, bank
and retail investors, initiated its debt restructuring efforts in
late January this year.

At that time, Multicanal offered to buy back its debts from bond
and bank creditors at 30% of the US$100 million the debts had
been originally worth.

Soon afterward, Multicanal also said it would swap existing bonds
for new ones coming due in later years. Holders could receive a
combination of equity plus new seven-year 7% or floating-rate
notes at 31.5% the value of their original bonds, or else new
ten-year notes that would pay increasingly higher rates capped at
4%.

So far, Multicanal's creditors have been shaking their heads at
the deal that would more than halve the amount the Company
collectively owes them.

Multicanal needs agreement from two-thirds of the investors
involved in order for its debt restructuring to get approval from
the court system.

By May 29, the Company had investors representing around US$109.6
million of bonds participating in its debt buyback of up to
US$100 million, but only US$141.9 million in the swap component
of the deal that needs around US$300 million to succeed.

This comes even after Multicanal amended its original offer on
Mar. 27, when it reduced the required participation in the swap
to around 70% from an original 89% of creditors.

Among other things, Multicanal also upped the amount of equity it
was offering bondholders to 36% of the Company's fully diluted
equity from an original 34%.

Creditors have been doing more than refusing to participate in
Multicanal's offer as it currently stands.

According to the Company's Securities and Exchange Commission
filing in late May, around 31 investors petitioned local courts
for its bankruptcy.

Multicanal has to put cash into an escrow fund to cover for
possible expenses that could arise from each lawsuit it faces.
The more suits pile up, the more cash the Company can't use right
now, says Dow Jones.

A source close to Multicanal and a source close to its creditors
confirmed that many of the suits filed against Multicanal involve
amounts less than US$1 million each. Nonetheless, Multicanal only
had around US$30 million of cash on hand in late March.

If all goes as the Company hopes, Multicanal will eventually
convince enough creditors to change the agreements on its debts,
making the lawsuits against it moot.

However, if Multicanal can't manage a successful debt
restructuring, it'll have to file for `concurso preventivo,' the
Argentine equivalent of Chapter 11. Then those creditors'
lawsuits will continue to play a role in the way the company
repays them.

"If the restructuring process undertaken by the Company is
unsuccessful it will likely have to file voluntary insolvency
proceedings," Multicanal said in an SEC filing in late May.

CONTACT:  MULTICANAL S.A.
          Avalos 2057
          C1431DPM Buenos Aires, Argentina
          Tel: 54 11 4524-4700
          Fax: 54 11 4370-5162
          Contact: Fabian Melnitzky
          E-mail: fmelnitz@redarg.com.ar


TELECOM ARGENTINA: $3.4B Of Bonds Get `D(arg)' from Fitch
---------------------------------------------------------
A total of US$3.4 billion of corporate bonds issued by Telecom
Argentina Stet-France Telecom S.A. were rated `D(arg)' by Fitch
Argentina Calificadora de Riesgo S.A. last Wednesday.

The ratings agency said that the `D(arg)' rating is given to
financial commitments that are currently in payment default.

The National Securities Commission of Argentina relates that the
following bonds received the ratings:

-- US$1.5 billion of "Programa Global de ONs autorizado por
Asamblea de fecha 16.3.99", die on August 2, 2004.

-- US$1.5 billion of "Programa de obligaciones negociables", with
undisclosed maturity date.

-- US$200 million of "Programa de Eurodocumentos Comerciales
autorizado por Asamblea de fecha 18.12.97.", which matured on
February 3, 2003.

-- US$200 million of "Programa de ON simples", whose maturity
date was not indicated.

All the above bonds were classified under "Program."

Meawhile, the Company's stocks, described as "Acciones Ordinarias
en Circulaci¢n Clase A, B y C de 1 voto c/u, V/N $ 1" were given
a rating of `3', which means that it is of average quality.

The ratings were given based on the Company's finances as of
MARch 31, 2003.

CONTACT:  TELECOM ARGENTINA STET - FRANCE TELECOM SA(TELECOM)
          Alicia Moreau de Justo 50, 10th Floor
          Capital Federal (1107) Repoblica Argentina
          Phone: +54 11 4968 4000
          Home Page: http://www.telecom.com.ar
          Contacts:
          Alberto J. Ricciardi, Chief Financial Officer
          Elvira Lazzati, Finance Director
          Pedro Insussarry, Investor Relations Manager
          Phone: (5411) 4968-3626/3627
          Fax: (5411) 4313-5842/3109
          Email: inversores@intersrv.telecom.com.ar


TELEFONICA HOLDING: Fitch Rates Bonds `CCC(arg)'; Stocks, `3'
-------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo assigned a `CCC(arg)'
rating to corporate bonds issued by Telefonica Holding Argentina
SA(Ex.Cei Citicorp SA).

The rating means that the financial obligation has an extremely
weak credit risk relative to other issues in Argentina. Fitch
added that the Company's capacity to pay its obligations on the
debt is solely reliant on favorable business and economic
conditions.

The rating applies to US$500 million owrth of bonds, which the
National Securities Commission of Argentina describes as
"Programa de Obligaciones Negociables por U$S 500 MM reducido a
un monto maximo de U$S 34.8 MM". The bond is classified under
"program".

The rating agency also assigned a `3' rating to the Company's
stocks called "Acciones ordinarias en circulaci¢n Clase B de 1
voto c/u, V/N $1". This means that the stock is of average
quality, said Fitch.

The ratings were issued last Wednesday, and were based on the
Company's financial state as of the end of March 2003.


TOWER RECORDS: Has New Owner
----------------------------
Tower Records Argentina, which entered into `Concurso Preventivo'
in April 2002 listing debts of almost US$5 million, has a new
owner.

According to a report released by Mercado Magazine, the ownership
of the major music sales company has been transferred to Mr.
Marcelo F”goli, the owner of the show producer Fenix
Entertainment, from the investment fund Condor Ventures. The
value of the transaction was not disclosed.


* World Bank Latin America Chief Optimistic On Argentine Recovery
-----------------------------------------------------------------
World Bank vice president for Latin America David de Ferranti
said he is "optimistic about the possibilities for Argentina to
reduce poverty and establish a path of sustainable growth that
will permit the recuperation of the economy."

Mr. De Ferranti met with Argentine president Nestro Kirchner and
members of his economic team in Buenos Aires last week. According
to him, the bank and the government have reached an auspicious
phase of dialogue that will allow them to define the terms of the
bank's assistance to the country and the priorities to work on.

"In the Bank we share the positive expectations of the majority
of Argentine people over the opportunity that the country has to
retake the path of sustainable economic growth with equity and
well being under the leadership of President Kirchner," said Mr.
De Ferranti.

The bank official, however did not comment on the country's
request to hasten the disbursement of about US$1.7 billion of
approved but undelivered loans.



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

GLOBAL CROSSING: Court Gives Clearance to Bitro Settlement Pact
---------------------------------------------------------------
Prior to the Petition Date, Bitro Telecommunications Incorporated
agreed to purchase network transport and other telecommunication
services from Global Crossing Bandwidth, Inc. formerly known as
Frontier Communications of the West, Inc., pursuant to a certain
Carrier Services Agreement, by and among Bitro and GX Bandwidth,
dated as of August 25, 1999.

On April 30, 2001, GX Bandwidth filed a complaint in the Superior
Court of the State of California for the County of Santa Barbara
against Bitro for breach of the Carrier Services Agreement.  GX
Bandwith asserted $1,790,747.08 in damages on account of Bitro's
payment defaults under the Carrier Services Agreement.  On
September 4, 2001, Bitro filed a cross-complaint in the
California Superior Court against GX Bandwidth for breach of
contract, fraud, negligent misrepresentation, interference with
economic advantage, and unfair competition.

To avoid the costs and uncertainty of litigation, the Debtors
entered into settlement discussions with Bitro to resolve the
litigation.  After arm's-length negotiations, GX Bandwidth and
Bitro agreed to the terms of a settlement dated as of June 13,
2002.  The Stipulation provides for:

    (i) certain payments by Bitro to the Debtors;

   (ii) the dismissal of the First Amended Cross-Complaint after
        the Court's approval of the Stipulation;

  (iii) the dismissal of the Complaint once all amounts pursuant
        to the Stipulation have been paid by Bitro to the
        Debtors; and

   (iv) mutual releases.

The Court approved the Stipulation.

The salient terms of the Stipulation are:

  A. The parties agree that Judgment will be entered against
     Bitro amounting to $1,000,000 unless Bitro makes certain
     payments pursuant to the terms of the Stipulation;

  B. Bitro will pay the Debtors $100,000 without further delay
     and $400,000 no later than three months after the First
     Payment;

  C. Bitro may elect to make the Second Payment over time
     under a payment plan.  Pursuant to the Payment Plan, Bitro
     will pay the Debtors:

         (i) $15,000 per month for the first 12 months following
             approval of the Stipulation;

        (ii) $26,000 per month for the next 17 months; and

       (iii) $28,000 for the last month.

     Under the Payment Plan, Bitro would make payments totaling
     $750,000, whereas Bitro would make payments totaling
     $500,000 if it elects to make the Second Payment as a
     lump-sum;

  D. Bitro may prepay amounts owed under the Payment Plan by
     making a lump-sum payment and will receive a credit for the
     lump-sum payment in accordance with a formula set forth in
     the Stipulation;

  E. The parties agree that the First Amended Cross-Complaint
     will be dismissed, with prejudice, after the Court's
     approval of the Stipulation;

  F. The parties agree that the Complaint will be dismissed,
     with prejudice, once all amounts due pursuant to the
     Stipulation have been paid to the Debtors; and

  G. The parties agree to release, discharge and acquit each
     other from all claims and causes of action asserted in the
     Complaint, the First Amended Cross-Complaint, and all
     claims arising out of the subject matters contained in the
     lawsuit. (Global Crossing Bankruptcy News, Issue No. 41;
     Bankruptcy Creditors' Service, Inc., 609/392-0900)



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

CEMIG: Mirant Retains Control Despite Stake Sale
------------------------------------------------
Despite the sale of its 3.6% economic interest in Brazil's Minas
Gerais state power company Cemig, US-based Mirant retains
management control of some companies, including some voting
rights related to Cemig, consistent with the agreement with
(national development bank) BNDES and the Minas Gerais state
government.

According to daily newspaper Valor Economico, Mirant has to
retain the voting rights despite selling the economic interest
until a dispute with the state government is resolved.

Mirant joined with AES and Opportunity to acquire 33% of voting
shares (14% of total capital) in Cemig in 1997 through the
Southern Electric Brazil (SEB) holding company. At the time, a
shareholders' agreement with the Minas state government gave the
three partners operational control of the company, but subsequent
Minas state governor Itamar Franco tore up the agreement and the
case is still struggling through Brazilian courts.

In the fourth quarter of 2002, Mirant sold the Cemig stake for a
"nominal amount" and wrote off US$84 million related to the
investment. Reports have it that US-based power investment
company Franklin Park Energy was the buyer of the stake. Mirant
spokesperson James Peters refuses to confirm the report due to
confidentiality agreement.

The new Minas Gerais state government, which took office in
January, has stated that it wants to mend fences with foreign
investors and try to improve the Company's credibility with the
capital markets, but says it must wait for the courts to decide
on the dispute with SEB.

CONTACT:  CEMIG
          Luiz Fernando Rolla, Investor Relations
          Phone: +55-31-3299-3930
          Fax: +55-31-3299-3933
          Email: lrolla@cemig.com.br
             or
          Eliza Gibbons
          The Anne McBride Company
          Phone: +1-303-477-1350
          Fax: +1-212-983-1736
          Email: eliza@annemcbride.com


CEMIG: May Sell Off Infovias Stake
----------------------------------
Cemig is considering the sale of its 49% stake in the
telecommunications company Infovias, which it acquired from AES
Corp. last year for US$32 million, suggests South American
Business Information.

Infovias, which was created in 1998 through a partnership between
Cemig and AES, reported a loss of BRL4 million in 2002. Cemig has
already invested BRL300 million in Infovias since 1998.


CORSAN: Moody's Places Ratings On Review For Possible Downgrade
---------------------------------------------------------------
Moody's Investors Service placed Companhia Riograndense de
Saneamento's (CORSAN) Brazil National Scale Rating of Baa1.br,
and its issuer and senior unsecured ratings of B1 (Global Local
Currency Scale) on review for possible downgrade.

The action, which affects approximately BRL100 million in debt
securities, reflects concerns over CORSAN's leverage and
liquidity profile, in addition to incorporating regulatory
uncertainties related to recent tariff policy and the allowed
return on assets, says Moody's.

CORSAN provides water and wastewater services to a population of
over 6.5 million residing in the State of Rio Grande do Sul. The
Company serves 69% of the municipalities in Rio Grande do Sul
under long-term concession agreements.

The Company's voting shares are 100% held by the State of Rio
Grande do Sul.


EMBRATEL: Legal Director Makes Exit
-----------------------------------
Long-distance phone operator Embratel, a unit of scandal-ridden
US operator WorldCom Inc., is about to see its legal director go.

Citing a report by local financial news agency Valor Online,
Business News Americas reports that Pedro Batista Martins is
leaving his post as legal director. He will be the third Embratel
executive to leave the Company in recent months.

Business News Americas recalls that in May, corporate unit
director Eduardo Levy and residential services division director
Jose Maria Zubiria also left Embratel. Just after the pair's
announcements, Embratel issued a statement saying it is
restructuring its management "in order to adjust to new market
demands."

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

CONTACT:     Embratel Participacoes
             Silvia M.R. Pereira, (55 21) 2121-9662
             fax: (55 21) 2121-6388
             silvia.pereira@embratel.com.br
             invest@embratel.com.br


GERDAU: S&P Assigns `BB' to $350M Bank Facility
-----------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it has
assigned its 'BB' bank loan rating to Gerdau Ameristeel Corp.'s
proposed $350 million senior secured revolving bank credit
facility due 2008. Standard & Poor's also assigned its 'B+'
rating to the company's proposed $400 million senior unsecured
notes due 2011.

At the same time, Standard & Poor's affirmed its 'BB-' corporate
credit rating on the company. The outlook remains stable.

"The credit facility is rated one notch above the corporate
credit rating reflecting Standard & Poor's assessment of the
strong prospect for full recovery in a default or bankruptcy
scenario," said Standard & Poor's credit analyst Dominick
D'Ascoli. Standard & Poor's said that the rating on the bank loan
is based on preliminary terms and conditions and is subject to
review once full documentation is received.

Standard & Poor's said that its ratings on Tampa, Fla.-based
Gerdau Ameristeel reflect the company's fair business position as
a producer of rebar; structural shapes; and merchant bar, rod,
flat-rolled, and fabricated steel.

Analyst:  Dominick D'Ascoli
          New York
          Phone: (1) 212-438-5024


TUPY: Invested $25M For Improvements At Maua Plant
--------------------------------------------------
Brazilian foundry Tupy invested US$25 million in its Maua plant
over the last two years, reports Business News Americas, citing a
company spokesman.

The investments were aimed at increasing the plant's capacity and
adjust product lines. According to the source, "Of current
production, of less than 30,000t/y, the plant will jump to
60,000t/y, having future conditions to reach 100,000t/y. For
this, however, new investments will be needed,"

The move towards modernization is to prepare the plant for the
production of cylinder blocks and heads for motors of heavy and
extra-heavy duty trucks for clients like DaimlerChrysler, Cummins
and Mack Trucks, said the source, adding that the plant will
continue making similar products for smaller vehicles.

Tupy, South America's largest foundry, acquired the Maua plant in
1998. Its main plant is in Joinville, Santa Catarina.


VARIG: Employees Oppose Merger With TAM
---------------------------------------
The ongoing process to merge Varig and TAM encountered heavy
protests from the employees of Varig, Latin America's largest
airline, which is undergoing a serious financial crisis.

EFE reports that Varig workers held demonstrations at the Sao
Paulo and Rio de Janeiro airports to show protest to Varig's
proposed merger with TAM. They contended that the merger with
TAM, which is being promoted by the Brazilian government, would
lead to the loss of numerous jobs.

The protesters also delivered a letter to Varig's chief, Roberto
Macedo, criticizing what they called TAM's "takeover" of the
company.

Varig employs approximately 18,000 people, while TAM has a
workforce of some 7,000.

Macedo said last month that the Company would have to lay off
some employees to adjust to the shrinking market, but he
emphasized that the job cuts would not affect just Varig.

The merger process, which started in February, is due to be
completed in September, when a new airline will be launched.

CONTACT:      VARIG (Viacao Aerea Rio-Grandense, S.A.)
              Rua 18 de Novembro No. 800, Sao Joao
              90240-040 Porto Alegre,
              Rio Grande do Sul, Brazil
              Phone: (51) 358-7039/7040
                     (51) 358-7010/7042
              Fax: +55-51-358-7001
              Home Page: www.varig.com.br/english/
              Contacts:
              Dorival Ramos Schultz, EVP Finance and CFO
              E-mail: dorival.schultz@varig.com.br

              Investor Relations:
              Av. Almirante Silvio de Noronha,
              n  365-Bloco "B" - s/458 / Centro
              Rio de Janeiro, Brazil

              TAM
              Daniel Mandelli Martin, President
              Buenos Aires
              Tel. (54) (11) 4816-0001
              URL: www.tam.com.br



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

COEUR D'ALENE: Expands Exploration Results in South America
-----------------------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE), the world's largest
primary silver producer, announced Tuesday that the Company
expects to increase the total resources at it's Cerro Bayo
gold/silver mine in southern Chile this year by 267,000 gold
equivalent ounces, or 18.7 million silver equivalent ounces, with
up to half that amount converted to reserves by year-end.

In the first three months of 2003 at Cerro Bayo an additional
50,000 gold equivalent ounces of measured and indicated resources
were added. The Company expects to increase its measured and
indicated resources at Cerro Bayo during 2003 by 138,000 gold
equivalent ounces or 9.7 million silver equivalent ounces. The
conversion to reserves of a majority of these measured and
indicated resources are expected by year-end 2003. Coeur also
anticipates the discovery of an additional 129,000 gold
equivalent ounces, or 9.0 million silver equivalent ounces, of
inferred resources at Cerro Bayo in 2003.

Drilling this year at Cerro Bayo has focused on delineating new
resources primarily within the Javiera and Wendy vein systems,
which were first discovered during the fourth quarter of 2002.
These two major veins cross over and strike parallel to each
other for at least 4,000 feet in the central Cerro Bayo area. Ore
grade mineralization in the Javiera vein has so far been
delineated over 2,600 feet in strike length and vertically over
525 feet. The Wendy vein is currently known to contain
mineralization over 650 feet in strike length and vertically over
400 feet. Drilling is continuing on the two veins, both of which
remain open in both directions along strike. Additional high-
grade reserves and resources discoveries are foreseen during 2003
within these and other numerous veins that total over 8 miles in
strike length in the central Cerro Bayo area.

Underground access to the Javiera and Wendy veins is now provided
by two ramps, where development work has encountered excellent
grades and thicknesses. On the Javiera vein, initial underground
development along a strike length of 770 feet averaged 0.40 gold
equivalent ounces per ton over a thickness of 4.8 feet.

New veins discovered this year include the Daniella vein,
identified 100 feet west of the Javiera and the Guanaco 2 Sur
vein, located two miles west of the Cerro Bayo mine. An initial
drill hole into the Daniella discovered a 7-foot wide vein
assaying 1.08 gold equivalent ounces per ton. Also, the Guanaco 2
Sur vein was discovered with an initial drill hole containing 8
feet of 0.34 gold equivalent ounces per ton.

"Exploration results at the Cerro Bayo mine continue to be
outstanding," said Dennis E. Wheeler, Chairman and Chief
Executive Officer. "These new gold and silver ounces are high-
grade and are being discovered at a very low cost of under $0.10
per silver equivalent ounce. Our expectations are that the Cerro
Bayo property will ultimately contain up to three million gold
equivalent ounces, which translates to over 210 million ounces on
a silver equivalent basis."

Exploration is also continuing on Coeur's 465-square mile land
package in the Santa Cruz province of Argentina, which includes
Coeur's high-grade Martha silver mine. Numerous low sulfide
epithermal veins with high-grade mineralization and extensive
strike length have been discovered during reconnaissance
exploration. The Company estimates the prospects on all of its
properties in Santa Cruz province have the geologic potential to
contain over 75 million silver equivalent ounces.

At the Tesoro prospect, located 6 miles north of the Martha mine,
drilling encountered 37 feet of massive sulfide bearing veins and
stockworks containing .04 ounce per ton gold, 14.2 ounces per ton
silver, 2.8 percent copper, 9.2 percent lead and 19 percent zinc
at 25 feet below the surface. Recent drilling has encountered the
down dip extension of the massive sulfide mineralization at 125
feet below the surface containing 11 feet of .01 ounce per ton
gold, 3 ounces per ton silver, 0.2 percent copper, 3.99 percent
lead and 5.08 percent zinc.

"This is the first time this kind of massive sulfide
mineralization has been encountered in the Santa Cruz province.
The Tesoro prospect represents a different geologic environment
from the low sulfide epithermal veins found throughout Santa Cruz
province and may be geologically similar to other high-grade
precious and base metal deposits currently being mined in other
parts of the world," Dieter Krewedl, Senior Vice President of
Exploration said. "We are currently doing detailed soil
geochemistry and ground geophysics over an approximately one
square mile area surrounding the Tesoro prospect to find
extensions of the massive sulfide mineralization under post-
mineral cover."

Underground development work is also commencing on the high-grade
R4 Zone located less than 600 feet east of the Martha mine. Coeur
expects ore shipment from the R4 Zone to the Cerro Bayo mill to
begin in the next two to three months. Average grade from the R4
Zone is in excess of 100 silver equivalent ounces per ton.

Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.

CONTACT:  Coeur d'Alene Mines Corporation
          Tony Ebersole, Investor Relations
          Tel: +1-208-665-0335



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

SERVIMAG: Water Utility Makes Rescue Offer
------------------------------------------
Servimag, the public utility serving northern Colombia's Magangue
municipality, could find its rescuer in a Bogota water utility as
it struggles to remain afloat amid financial troubles.

Citing newspaper El Universal, Business News Americas reports
that EAAB, Bogota's water utility, has expressed interest in
investing COP32 billion (US$11.4mn) in Servimag. The proposal, if
accepted, would make EAAB the utility's operational manager for
20 years.

During those 20 years, EAAB would need to provide 24-hour
services throughout the city and pay Servimag's overdue bills, El
Universal said.

Meanwhile, Servimag is also scheduled to meet with the national
government to discuss a possible bailout.



===================================
D O M I N I C A N   R E P U B L I C
===================================

INTERCONTINENTAL DE SEGUROS: Regulator Confirms Intervention
------------------------------------------------------------
The Dominican Republic's insurance regulator passed a resolution
confirming that it has intervened the local insurance unit
Intercontinental de Seguros, owned by media magnate Ramon Baez
Figueroa, who stands accused of multi-million-dollar fraud at the
Banco Intercontinental (Baninter).

The regulator said that it had decided to "intervene as
liquidator of the referenced company with all legal consequences,
to protect individual life insurance reserves and the payments of
claimants."

According to Business News Americas, the resolution forbids
Intercontinental de Seguros from carrying out any sale
transaction, signing new insurance contracts or making any
payments without authorization.

According to chief regulator Rafael Santos, a technical
commission will be set up to determine the insurer's future
operations based on an evaluation of the Company's assets and
liabilities.



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

PETROECUADOR: Strike Reduces Crude Transport
--------------------------------------------
Crude transport through Ecuador's sole crude oil pipeline has
been reduced due to a strike staged by the workers of
Petroecuador, the country's state oil company, according to
Reuters.

The degree of the reduction is not clear, however. According to
Petroecuador president Pedro Espin, transport is slashed by 30 to
40 percent, but union leader John Plaza says that there is only
50 percent transport as they have cut off three units.

However, crude transport remained at normal levels on Tuesday,
said Mr. Espin.

Another union leader said that it is only a matter of time before
transport at the Transecuadorean pipeline, which is known as the
SOTE, would be cut off by half.

Petroecuador workers are staging the strike in protest of the
government's proposal to award association contracts to private
investors. They are demanding the resignation of Energy Minister
Carlos Arboleda.

Some 4,000 workers did not show up for work on Monday, says
Reuters.

In the meantime, the Company assures its customers that it has
enough fuel despite the work slowdown.



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

CFE: Gives Investors More Time To Submit Bids For Yucatan Project
-----------------------------------------------------------------
Investors who are interested in Mexico's state power company
CFE's 508MW Valladolid III combined-cycle thermoelectric project
in Yucatan state now have ample time submit their bids.

According to Business News Americas, CFE extended the deadline
for the submission of bids from June 9 to July 12. Bidding rules
are now available through July 15, technical bids will be opened
July 21 and economic bids August 22.

Work on the project, which will require investments of between
US$320 million - US$340 million, is scheduled to start in March
2004, and be completed by April 2006.

The CFE will buy power from the plant under a 25-year power
purchase agreement (PPA), and generation from the plant will
guarantee power supplies on the Yucatan peninsula through 2011.

CONTACT:  COMISION FEDERAL DE ELECTRICIDAD
          Rio Rodano 14, Col. Cuauhtemoc
          06598 Mexico, D.F., Mexico
          Phone: +52-55-5229-4400
          Fax: +52-55-5310-4614
          Home Page: http://www.cfe.gob.mx
          Contacts:
          Alfredo Elias Ayub, General Director
          Arturo Hernandez Alvarez, Director of Operations
          Francisco J. Santoyo Vargas, Director of Finance


GRUPO ELEKTRA: Deutsche Bank Recommends "Buy"
---------------------------------------------
Deutsche Bank reinitiated coverage of Mexican retailer Grupo
Elektra SA with a "Buy" recommendation, reports Dow Jones. In a
research note, analyst Joaquin Lopez Doriga suggested that
despite "conservative operational assumptions for the Company's
banking and retail businesses," Elektra's shares "offer
significant value." Deutsche Bank has established a 12-month
target price of US$15 per American Depositary Receipt, above
Friday's closing price of US$11.06 per ADR.


TV AZTECA: Announces Intention to Sell Content To Channel 10
------------------------------------------------------------
TV Azteca, S.A. de C.V. (NYSE: TZA)(BMV: TVAZTCA), one of the two
largest producers of Spanish- language television programming in
the world, announced Tuesday that, as part of its ongoing efforts
to expand its programming sales abroad, is negotiating to sell
content to channel 10 in Israel. The company also announced plans
to sell broadcasting technology support to the channel.

TV Azteca intends to sell some of its most successful
international programming, which includes novelas and
entertainment shows.

The company noted it does not intend to purchase any equity
interest in the Israeli Network.

TV Azteca currently distributes its programming to more than 90
countries. International programming exports accounted for US$12
million in revenues during 2002.

Company Profile

TV Azteca is one of the two largest producers of Spanish-language
television programming in the world, operating two national
television networks in Mexico, Azteca 13 and Azteca 7, through
more than 300 owned and operated stations across the country. TV
Azteca affiliates include Azteca America Network, a new broadcast
television network focused on the rapidly growing US Hispanic
market; Unefon, a Mexican mobile telephony operator focused on
the mass market; and Todito.com, an Internet portal for North
American Spanish speakers.

CONTACT:  TV AZTECA, S.A. DE C.V.
          Investor Relations:
          Bruno Rangel
          Phone: +011-5255-3099-9167
          Email: jrangelk@tvazteca.com.mx
             or
          Omar Avila
          Phone: +011-5255-3099-0041
          Email: oavila@tvazteca.com.mx
             or
          Media Relations:
          Tristan Canales
          Phone: +1-5255-3099-5786
          Email: tcanales@tvazteca.com.mx

          Home Page: http://www.tvazteca.com.mx



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

BWIA: Government Delivers Ultimatum
-----------------------------------
Trinidad and Tobago Trade Minister Kenneth Valley delivered the
government's ultimatum to its flag carrier, BWIA: reduce its
labor costs or face liquidation. Mr. Valley met with the
airline's management team last Thursday.

The government gave BWIA one week to present its plan to reduce
its plan to reduce costs. Unless the plan is presented, there
would be no more funding from the state, according to the
Trinidad Guardian.

"In law, if BWIA does not get wage concessions and the Government
withdraws funding, the directors would be forced to call a
meeting of the creditors, who can pass a resolution putting BWIA
into a creditors' liquidation," said a senior attorney, as quoted
by the report.

Recently, BWIA faced real danger of closing down after creditors
started moving in on the airline. The government succeeded in
saving the airline by negotiating with the ILFC, the leasor of
BWIA's planes.

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: Zwaig Consultants Studying Troubled Airline
-------------------------------------------------
Executives from consulting firm Zwaig visited the offices of
Trinidad and Tobago airline BWIA, reports the Trinidad Guardian.
Zwaig president and chief executive Melville Zwaig himself was
reportedly among those who visited.

According to the report, the consultants met with BWIA
executives. BWIA's corporate communications manager Clint
Williams said, "BWIA has been supplying whatever information they
(Zwaig) have requested.

BWIA would have gone to its creditors if the government had not
intervened in its behalf recently. Two of the airline's planes
were seized by the leasing company as the airline failed to pay
its dues on the deadline given.

After negotiating with the government, the leasing company agreed
to return the planes. In turn, the government demanded changes at
the airline's management. BWIA CEO Conrad Aleong stepped down
shortly after the negotiations.



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

PDVSA: Court Won't Reinstate Warrants For Strike Leaders
--------------------------------------------------------
The Supreme Court of Venezuela ruled that the arrest warrants for
seven former executives of the country's state oil company,
Petroleos de Venezuela S.A. (PdVSA), would not be reinstated,
relates the Associated Press. The seven men reportedly led PdVSA
workers in the national strike aimed at deposing president Hugo
Chavez.

According to the Court, prosecutors violated the defendants'
rights by denying them legal representation when they were
arrested. In the meantime, the Court told the prosecutors to
reinitiate the process.

The Associated Press points out that strike participants have
avoided punishment, so far.

The strike, which ended in February, closed with Mr. Hugo still
president and at least 18,000 PdVSA workers dismissed. The strike
also contributed to a 29 percent economic contraction for this
year's first quarter.

During the course of the strike, the Company's output was reduced
by as much as 90 percent.




               ***********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


* * * End of Transmission * * *