TCRLA_Public/030826.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, August 26, 2003, Vol. 4, Issue 168



AT&T LATIN AMERICA: Nears Acquisition Agreement With Embratel
BANCO HIPOTECARIO: S&P Affirms Default Rating
CTI MOVIL: Mulls New APE Subscription
IRSA: To Invest $420M In Development Project
REPSOL: Aims to Open 100 New Distribution Plants By Year-end
SOUTHERN WINDS: Argentine Government Offers Financial Aid


BRASKEM: Successfully Completes $30M Syndicated Facility
EMBRATEL: To Save BRL1.2 Mln From New Billing System


ACES: Aviation Regulator Re-Assigning Routes To Other Providers


PETROECUADOR: Signs $27M Accord With Drillfor


PIL: Liquidator Has 3 Mos. To Effect Enchanted Garden Repairs


GRUPO TMM: Refinances Securitized Receivables
NII HOLDINGS: Mexican Unit Angles Toward Acquiring 3 Rival Firms
PEMEX: Capital Spending Must Increase Dramatically To Up Output


BANCO ASUNCION: Spanish Parent Decides On Closure


MINERA VOLCAN: Buyer To Be Determined Within Three Weeks


PDVSA: Western Unit Operating Normally Despite Chaos, Says CEO
PDVSA: Continues To Restructure Management

     - - - - - - - - - -


AT&T LATIN AMERICA: Nears Acquisition Agreement With Embratel
Brazil's largest long distance operator Embratel is close to
acquiring regional corporate communications provider AT&T Latin
America (ATTL), Business News Americas reports, citing Brazilian
local press. Both Embratel and ATTL spokespersons refused to
comment on the reports but an unnamed Rio de Janeiro-based fixed
line analyst told Business News Americas he believes the sale has
an 80% chance of happening as the two operators' networks
complement so well.

"I would imagine that AT&T has very high long distance
[interconnection] costs, and Embratel has very high local
[interconnection] costs," he said. AT&T has last-mile connections
in all the largest metro regions of Brazil.

The analyst cautioned that Embratel would likely only be
interested in ATTL's Brazilian infrastructure, which he valued
US$50mn. ATTL has not specified whether or not it would be game
to splitting up the company into the separate country portions
via multiple sales.

Washington, DC-based AT&T Latin America provides facilities-based
corporate communications services in Argentina, Brazil, Chile,
Colombia and Peru.

CONTACT:  AT&T Latin America
          Marcelo Esquivel
          Phone: 011-562-241-4706
          Catherine Castro
          Phone: +1-202-689-6336

BANCO HIPOTECARIO: S&P Affirms Default Rating
Standard & Poor' s Ratings Services said Thursday that it
affirmed its 'D' rating on Banco Hipotecario S.A. BHI.BA (BH),
following the bank's announcement of a debt exchange offer that
materially affects the value of the bonds under their original
terms and conditions.

In August 2002, all ratings on Banco Hipotecario were placed in
default as a result of the bank's announcing the suspension of
payments on all of its debt issues, with the objective of giving
a more equitable treatment to all of its creditors in the context
of a comprehensive debt restructuring process.

BH is one of the financial institutions that suffered the most
from the measures taken by the Argentine government at the
beginning of 2002. Despite the precautions taken in the past to
run a matched book between dollar-denominated mortgage loans and
dollar-denominated debt, the compulsory pesification of the loans
in the bank's asset book created havoc on BH's ability to pay
down its debt, since the bank is largely funded by cross-border
dollar-denominated debt not subject to pesification. As a result,
the asymmetric devaluation produced an unsustainable currency gap
and significantly eroded the bank's previously strong capital

In this context, BH's viability in the Argentine financial system
is conditioned to the bank's successful completion of a
comprehensive debt restructuring process. "If successful, the
recently launched exchange offer will improve BH's debt profile-
both reducing total debt burden and extending maturities," said
credit analyst Carina Lopez.

The current exchange offer presents various alternatives to
bondholders. By means of an initial "Par-for-Par offer," the bank
proposes to exchange existing notes in default for long-term
notes, which will be denominated in the same currency as the
notes tendered by investors. An early tender payment is available
for investors that accept the offer before a certain deadline.
Investors accepting this Par-for-Par offer may simultaneously
decide to exchange the new securities for cash or guaranteed
notes in the discount offers. In every case, the new terms
proposed imply a net present value reduction with respect to
original conditions.

The proposed exchange offer is conditioned to the completion of a
concurrent bank debt restructuring under terms similar to those
proposed for the notes. At least 90% participation is required
for both the notes' exchange and the bank debt restructuring. The
successful completion of the comprehensive debt restructuring
process is key for BH's survival; however, its implementation is
challenged by the complexities that arise from the geographic
diversification of the bank's current funding base.

The new securities to be issued under the proposed exchange offer
will be rated in the 'CCC' category, indicating that the
difficulties that the bank will face in complying with the terms
and conditions of their restructured liabilities will be
conditioned by the still uncertain operating environment in
Argentina and the bank's high exposure to the sovereign's
creditworthiness-originated mostly by the government bonds
received as compensation for the pesification, as is the case
with the rest of the financial system.

BH is a public company. Prior to the Argentine financial crisis,
the bank was the leader in the individual residential mortgage
loans segment, with a total portfolio of more than $4 billion,
and a market share of around 40%.

CTI MOVIL: Mulls New APE Subscription
Argentine wireless phone company CTI Movil -controlled by Coinmov
(America Movil, Techint, Deutsche Bank and Coinvest)- is
considering agreeing with a new out-of-court agreement (APE) with
holders of 30% of its US$263 million notes issued in 1998, with
whom the Company has not managed to reach an accord during its
first debt restructuring attempt.

The new APE would be similar to the first one, which involved an
87% write-off and meant a reduction of CTI's debt from US$ 1.05
billion to US$936 million.

IRSA: To Invest $420M In Development Project
IRSA Inversiones y Representaciones SA, Argentina's biggest real
estate developer, plans to spend US$420 million over 10 years to
develop apartments, schools and commercial real estate, says
Bloomberg. The Company is taking on the project, considered to be
the largest in Buenos Aires in 20 years, in a bid to profit from
a plunge in local construction costs.

"Construction costs are less than half what they were in the
1990s and demand is strong," IRSA founder Eduardo Elsztain said
in an interview last week at the Company's headquarters in Buenos
Aires. "We're investing more this year than we did in the past
three years."

Commenting on IRSA's plans is Eduardo Herrera, an analyst at
Santander Investment SA in Buenos Aires. According to him: "This
step IRSA is taking is a big gamble because Argentina's economy
is only beginning to show signs of recovery. But it's a long-term
project. Considering the company has a strong cash position and
prices are at all-time lows, this is probably a smart bet."

IRSA reached agreement with creditors last year to extend
maturities and lower interest rates on US$150 million of debt,
the second-publicly traded company in Argentina after Perez
Companc SA to restructure its debt following the government's
default in late 2001.

The Company reported net profit of ARS197.6 million (US$67
million) in the nine months ending March 31 after a record loss
of ARS558.1 million in 2002, and has about US$60 million in cash
after selling convertible bonds last year to help secure a debt

          Gustavo Mariani, Finance Manager
          Web site:

REPSOL: Aims to Open 100 New Distribution Plants By Year-end
Spanish oil company Repsol-YPF revealed it has opened 40 new
diesel distribution plants in Argentina this year, relates
Business News Americas. In a statement, the Company said it has
opened 7 plants in Santa Fe province and 13 in Cordoba province,
and has opened other plants in Buenos Aires, La Pampa, Entre
Rios, Santiago del Estero, Tucuman and Salta.

According to Repsol, the plants are equipped with the latest
technology and special trucks to transport the diesel directly to
its clients. Repsol-YPF plans to have 100 plants by the end of
the year.

SOUTHERN WINDS: Argentine Government Offers Financial Aid
The Argentinean government has decided to help the ailing local
carrier Southern Winds (SW) avoid a possible bankruptcy.
According to a report released by South American Business
Information, the government agreed to cover all costs related to
fuel and airport taxes for SW, as part of a deal involving the
integration of the Company's operations with Lafsa, the new
state-owned airline. In exchange, SW will make all its sales,
advertising and marketing services available to the partnership.

Besides paying for the fuel, which accounts for 40% of total
operating costs, and taxes, the government will also absorb the
employees of former airlines Lapa and Dinar. SW will not transfer
its debt to the government and the eventual profits will be
equally shared between the two partners.

Indications of SW's financial woes surfaced earlier this year
when the Company had to leave from the IATA Clearing House on
failure to pay obligations with the entity.

          Mr. Juan Maggio, President
          Santa F, 784, PB. Te: (005411)4515-8600


BRASKEM: Successfully Completes $30M Syndicated Facility
Braskem S.A. (NYSE: BAK - News; BOVESPA: BRKM5), leader in the
thermoplastics segment in Latin America and among the five
largest Brazilian privately-owned industrial companies, announced
Friday that it has concluded successfully the syndication of a
US$30 million secured pre-export finance facility structured by
ORIX Trade Capital ("OTC").

The facility has a tenor of 18 months and is secured by future
export US dollar receivables. The facility documentation was
signed on August 19.

OTC ( is part of ORIX USA Corporation, a
subsidiary of ORIX Corporation. Established in 1964, ORIX
Corporation is an integrated financial services group based in
Tokyo, Japan, and is listed on the Tokyo Stock Exchange (TSE:
8591 - News) and New York Stock Exchange (NYSE: IX - News). With
$49 billion of assets and approximately 11,600 employees
throughout 23 countries worldwide, ORIX's activities include:
leasing, corporate finance, real estate-related finance and
development, life insurance, and investment and retail banking.

OTC acted as Arranger and Bookrunner for the Facility. Lead
Managers were HSH-Nordbank, New York Branch, and OTC; and
Participants were Banco do Brasil, New York Branch and Landesbank
Rheinland-Pfalz - Girozentrale.

Commenting on the transactions, Braskem's Chief Financial
Officer, Paul Altit, indicated that: "This is a very important
deal for us, since it provides Braskem with an attractive and
cost-efficient mechanism to finance its operations, also
solidifying our relationship with domestic and international
banks. We are confident this facility should lead to similar
transactions of this type in the future."

Braskem is a world-class Brazilian company, leader in the
thermoplastics segment in Latin America and among the five
largest Brazilian privately-owned industrial companies. The
company operates 13 manufacturing plants located throughout
Brazil, and it has a yearly production of 5.0 million tons of
petrochemical products.

EMBRATEL: To Save BRL1.2 Mln From New Billing System
Embratel has developed a new system to issue its bills and
invoices for basic and advanced telephone, data and internet
services, which will bring about R$ 1,2 million savings. The new
model, implemented in early August, replaces the previous
solution of page-by-page "auto-wrapped" bills, and is executed
through IBM's Print Center. IBM is a partner of Embratel in
information cutting-edge technology.

According to Embratel Empresas' Financial Department, the new
process offers a lot of benefits to customers and to the company
itself, including the improved survey and control of returned
bills due to wrong address, and simplified bill printing. The
system enables the use of the Post Office's new FAC (authorized
letter franchise) model through which customers are able to track
the sending and receiving of their bills. Additionally, the
mailing costs will be reduced.

Thanks to the new model, documents like bills, ICMS and ISS
invoices and tax-exempt receipts can be included in a single
statement. Previously, a considerable number of complaints were
made against the auto-wrapping system by customers that did not
receive their documents. The system makes it possible to prevent
and avoid errors and losses in the handling of documents and CDs.

In addition to a more appealing, more intelligible layout, the
new model facilitates the printing and sending of copies of bills
and invoices through the Print Center. Embratel is now provided
with a more sophisticated CD generation process thanks to the
inclusion of information validation through bar codes, making
sure that the CD will be delivered to the right customer.

Another facility consists of a detailed description of the
billing items - before that, the field was limited to twenty
characters. This advantage is intended to fulfill a request of
our customers who need to understand their bills, and will be
complemented at a later stage, within two months, by the
implementation of new descriptions of the billing items.

Embratel is the premium telecommunications provider in Brazil,
offering a wide range of telecommunication services, such as
advanced voice, high-speed data transmission, internet, data
communication by satellite and corporate networks. The company is
national leader in data and internet services, in a privileged
position to become the Latin American carrier with an all-
distance network. Embratel network has national coverage with
almost 17,500 miles of optic cables, representing around one
million miles of fiber optics

          Advertising, Press and Public Relations Department
          Further information: (02121) 2121 7837 / 2121 6291
          Fax: (02121) 2121 7791
          Mid-West- Phone: (02161) 242-9058 / 2845 / 916-9188
          Attention: Flavio Resende
          Embratel on the internet:


ACES: Aviation Regulator Re-Assigning Routes To Other Providers
Up to 13 air routes flown by now-defunct airline Colombian ACES
will be reassigned to other providers. According Dow Jones
Business News, Colombia's Civil Aviation Authority has scheduled
a public meeting for September 20 for the reassignment.

The airline's routes were initially assigned to Avianca,
Colombia's largest airline, which formed along with ACES and SAM
airlines a business partnership called Alianza Summa. However,
other Colombian airlines may apply for the routes.

Yet, Alianza Summa, ACES' ex-partner, believes it should have
prior claim to the routes because of its special relationship
with the dissolved airline.

Until recently, ACES flew both domestic and international routes
that included Bogota-Medellin, Medellin-Miami, Bogota-Miami,
Bogota-Ft. Lauderdale, Bogota-Lima and Bogota-Quito.

ACES' shareholders recently approved its liquidation at the back
of the airline's struggles to deal with its ailing situation.

ACES, which began operations in 1972, reported a loss of US$9
million in the first four months of the year, up from a US$7
million loss in the same period of 2002. The airline has a cash
shortfall of US$33 million and its liabilities totaled US$76
million as of April.


PETROECUADOR: Signs $27M Accord With Drillfor
Ecuador's state oil company Petroecuador has signed a US$27-
million contract with local firm Drillfor, under which two of the
latter's rigs will carry out new drilling activities in
Petroecuador's Shushufundi and Lago Agrio oil fields in the
Amazon region

According to Business News Americas, the 12-month contract, which
is part of Petroecuador's emergency plan to rehabilitate its
fields and carry out new drilling, calls for Drillfor to drill
eight wells by December.

The drilling aims to boost Petroecuador's output to 218,000
barrels a day (b/d) by year-end. The Company currently produces
output of only 205,000 b/d while the government budget calls for
average production of 210,000b/d for the entire year, according
to Petroecuador president Pedro Espin.

A company source revealed that Petroecuador was supposed to hire
a company to drill the wells through a formal bidding process,
but drilling has already been suspended for six months and the
Company could not wait any longer.

The bidding process was delayed earlier this year after Drillfor
brought a court injunction against the tender due to a dispute
with Ecuador's previous administration.


PIL: Liquidator Has 3 Mos. To Effect Enchanted Garden Repairs
Douglas Chambers has been appointed liquidator for Premium
Investment Limited (PIL), which holds the assets of Enchanted
Garden, reports the Jamaica Gleaner. The appointment came after
Edward Seaga, chairman of the Premium Group of companies, placed
PIL into voluntary liquidation this month to raise funds to pay
off tax liabilities of about $120 million and other debts owed by
Town and Country Resorts Limited (TCRL), another of his
companies, which managed Enchanted Garden.

Chambers told The Financial Gleaner he is working with a three-
month timeline to raise $5 million to finance the repair of
Enchanted Garden after which he will concentrate more fully on
selling the assets.

Believing that the property was overstaffed, the liquidator made
25 of the property's 61 employees redundant on Wednesday to cut

The liquidator is legally required to cease operations of a
company placed in voluntary liquidation, but Company Law allows
for exceptions where the continuation of business is shown to be
"beneficial" to the winding up.

"Instead of not operating, we have decided to open the gardens to
Jamaicans, to give them a chance to view it," said Chambers. "We
need to generate income to effect certain repairs that are needed
to the gardens and property, to put it back in a more saleable

The resort comprises 129 condominiums and apartments, "none of
which belong to Premium Investment," said Chambers, but are owned
independently by individuals and institutions. According to the
liquidator, he was yet to finalize the valuation of the assets,
and was not yet at the point of speaking with interested buyers.


GRUPO TMM: Refinances Securitized Receivables
Grupo TMM, S.A. (NYSE:TMM) and (BMV:TMM A)("Grupo TMM" or the
"company") has completed the refinancing of the outstanding
amounts under its existing receivables securitization program.
After giving effect to the amendments to the transaction, there
will be approximately $54 million of outstanding certificates
issued by the securitization trust. The new certificates require
monthly amortization of principal and interest and mature in
three years. This refinancing improves the company's overall
liquidity by allowing the release of excess cash retained in the
securitization trust and significantly improves the maturity
profile of the payments due under the receivables securitization
program, which had become payable in June 2003.

Funding for the refinancing was arranged by the U.S.-based Maple
Commercial Finance Group, a division of Toronto-based Maple
Financial Group Inc., and funding was provided by affiliate Maple
Bank GmbH, a German commercial bank. Mexico City-based Axis
Advisors LP acted as structuring agent and co-arranger, and
provided financial advisory services to the company.

The foregoing is announced as a matter of record only, and does
not constitute an offer to sell securities or the solicitation of
an offer to buy securities.

Headquartered in Mexico City, Grupo TMM is Latin America's
largest multimodal transportation company. Through its branch
offices and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in TFM, which operates
Mexico's Northeast railway and carries over 40 percent of the
country's rail cargo. Grupo TMM's web site address is and TFM's web site is Grupo TMM
is listed on the New York Stock Exchange under the symbol TMM and
Mexico's Bolsa Mexicana de Valores under the symbol TMM A.
CONTACT:  Grupo TMM Company
          Jacinto Marina
          Phone: 011-525-55-629-8790

          Brad Skinner
          Phone: 011-525-55-629-8725

          Marco Provencio,
          Phone: 011-525-55-629-8708
          Phone: 011-525-55-442-4948

          Dresner Corporate Services
          Kristine Walczak
          Phone: 312-726-3600

          Maple Commercial Finance Group
          James A. Culver, PhD
          Phone: 201-369-3032

NII HOLDINGS: Mexican Unit Angles Toward Acquiring 3 Rival Firms
Digital trunking operator Nextel Mexico's acquisition of three
rival companies for an undisclosed amount is now underway,
Business News Americas reports, citing business development VP
Gustavo Cantu.

"At the moment we have three acquisitions signed and going
through the regulatory process," Cantu said.

In the last three years, Nextel Mexico, in its bid to boost its
spectrum holdings, has purchased nine companies with trunking

Nextel Mexico currently operates digital networks in 21 cities
and analogue networks in 24 cities. The Company is the most
important subsidiary of US-based NII Holdings, accounting for 89%
of the parent company's US$63-million operating income before
depreciation and amortization in the second quarter. The Mexican
division also reported 580,700 subscribers at the end of the
quarter, equivalent to about 85% of the market.

To see financial statements

CONTACT:  Investor Relations: Tim Perrott
          (703) 390-5113

          Media Relations: Claudia E. Restrepo
          (786) 251-7020

PEMEX: Capital Spending Must Increase Dramatically To Up Output
Raul Munoz, Chief Executive Officer of Mexico's state oil company
Pemex, disclosed that the Company needs to invest MXN98.5 billion
a year from 2003-2010 to boost hydrocarbon reserves production,
relates Business News Americas. Speaking at a conference
organized by Mexico's Association of Civil Engineers, Munoz
revealed Pemex will invest MXN517 billion from 2003-2006, of
which 72% will go towards exploration and production, 18% towards
refining and 10% towards gas, petrochemicals and corporate

Pemex wants to increase the rate of return on its hydrocarbon
reserves by finding better quality reserves and lowering costs,
thereby increasing crude and gas production levels.


BANCO ASUNCION: Spanish Parent Decides On Closure
Madrid-based financial group SCH elected to close its Paraguayan
banking subsidiary Banco Asuncion, reports Business News
Americas. The decision, which was taken at a shareholders meeting
last week, came after the Spanish group failed to find a suitable
buyer for the loss- making subsidiary.

Rumors had it that Paraguayan financial group Itacua was close to
reaching an agreement with SCH to purchase Asuncion. However, the
deal fell through.

According to Asuncion chairman Lisardo Pelaez, several other
offers were not considered financially viable. The ideal scenario
would have been to transfer Asuncion's shareholding to another
institution within the Paraguayan system, Pelaez added.

Banco Asuncion reported a EUR2.9 million loss for SCH last year.
The bank currently has less than one tenth the deposits it had
two years ago, Pelaez said.


MINERA VOLCAN: Buyer To Be Determined Within Three Weeks
It would take 2-3 weeks before a winner of a race to take control
of Peruvian zinc miner Volcan will be decided, according to Jose
Roberto Freire, the head of zinc at Votorantim Metais (VM).
Business News Americas recalls that Brazil's Paraibuna de Metais,
part of the Votorantim group, is one of the companies to place a
bid for Volcan, along with Peruvian tin miner Minsur and Swiss
natural resources group Glencore.

Freire said that the selection of a buyer for the Peruvian miner
is difficult because the offer has to be accepted by all the
Company's creditors, suppliers and other interested parties.

Hard-hit by low zinc prices, Volcan has been looking for a
strategic partner for some time to help solve its financial
problems. The Company owes about US$100 million to financial
institutions and US$50 million to suppliers. It posted a US$8.1
million- loss in the second quarter of 2003, compared to a loss
of US$5.5 million in the same period last year. Revenue dropped
5.6% year on year due to lower volumes sold and weaker zinc

Volcan operates the Yauli and Cerro de Pasco units in central
Junin and Pasco departments respectively. It also has the Chungar
unit in Pasco.

          Av Gregorio Escobedo
          710 Jesus Mara
          Lima, Peru
          Tel: +51 1 219-4000
          Fax: +51 1 261-9716
          Mr. FMG Sayan (Francisco), Chairperson


PDVSA: Western Unit Operating Normally Despite Chaos, Says CEO
Felix Rodriguez, the CEO of the western unit of Venezuela's state
oil company PDVSA, said that production, refining and
distribution businesses at the unit are operating normally
despite the political turmoil in Venezuela. In fact, the division
produced 1.26 million barrels of oil daily in July and August,
55,000 more than planned, government press agency Venpres quoted
Rodriguez as saying.

About 47% of PDVSA-West's production goes to the Cardon refinery
as part of the Paraguana refinery complex (CRP), while the rest
is exported.

Rodriguez admitted though that security guards are on call to
make sure there is no sabotage of installations by anti-
government infiltrators.

PDVSA: Continues To Restructure Management
Venezuela's state oil company PDVSA continues with its upper
management shakeup as part of an overall restructuring process,
reports Business News Americas. Citing the local press, the
report reveals that the Company has appointed Nelson Reyes as
Europe division director. At the same time, it has also named VP
Aires Barreto as marketing and supply manager. The appointments
will take effect September, the report adds.

Meanwhile, PDVSA appointed Nelson Martinez as its new director of
its Oriente (Eastern) division in July, and Luis Marin as the
president of the Company's international arm CITGO. Another
executive who may soon be moved is PDVSA supply Juan Jose Ahumada
general manger.

Citing unnamed officials, Energy News Today suggests that Ahumada
could head up PDVSA's Bahamas Oil Refining Company International
(Borco), while Milagros Rincon could replace him in supply. The
current head of Borco, Jaime Vargas, would become planning

In other possible moves, Romel Rangel could become PDVSA's new
manager of distribution, while Asdrubal Chavez could be the new
human resources manager and Boris Marchegiani could take over as
international marketing manager.


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 America 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,
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