TCRLA_Public/030903.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

          Wednesday, September 3, 2003, Vol. 4, Issue 174



ACINDAR: Bond Issue Opens Way To Up Belgo Stake
BANCO DE GALICIA: Faces Investigation By Securities Regulator
DISCO: To Contest AFIP's Claims
DISTRIBUTION SYSTEMS: Deadline For Credit Check Expires Today
INSTELEC ELECTRONICA: Receiver Prepares Individual Reports

DUETO: Receiver Closing Credit Verification Process
FOCAR POOL: Credit Verification Process Ends
PDL: Creditor's Request For Bankruptcy Approved
PUENTES DEL LITORAL: Court Slaps Embargo on Accounts
REPSOL YPF: 1H03 Argentine Investments Top $300M

SOLBO: Court Orders Bankruptcy
TEXPO: Court Approves Creditor Petition For Bankruptcy


C&W BARBADOS: Reports $41.6M Pre-tax Loss


BCP: America Movil Acquires Interest
BCP: Analysts Surprise By America Movil's Strategy
CEMIG: Begins First Phase of Capim Branco Construction
EMBRATEL: New Legal Director Assumes Post


EMBONOR: Embarks On Cost-Cutting Plan

D O M I N I C A N   R E P U B L I C

BANCO MERCANTIL: Monetary Board Approves Sale To T&T Bank

* IMF OKs US$600M Stand-By Arrangement for the Dominican Republic


BANCO DEL PACIFICO: Paribas To Submit Valuation to Central Bank
TELECSA: Accepts Ericsson's $68M Offer To Supply CDMA Network


KAISER ALUMINUM: Chinese Firm Eyes Jamaican Assets


CFE: Shell To Supply LNG To Fire Thermo Power Plants
GRUPO TMM: Finance Ministry Seeks Proof of Tax Payments
PEMEX: Deadline for Submission of CSM Applications Extended


VOLCAN: Takes On Glencore's Offer

T R I N I D A D   &   T O B A G O

BWIA: Profitability Likely by Year-End, Says Minister
BWIA: AATT Finalizing Evaluation of Application For Reviewer


CITGO: Contributes Record-Breaking $7 Million to MDA
DAEWOO MOTORS: Tax Regulators Order Asset Embargo
PDVSA: Postpones Refinery Shutdown Until Next Weekend

     -  -  -  -  -  -  -  -


ACINDAR: Bond Issue Opens Way To Up Belgo Stake
The convertible bonds issued by Argentine long steelmaker Acindar
will enable its shareholder Belgo-Mineira to increase its stake
in the Company, reports Business News Americas, citing Gustavo
Pittaluga, assistant to Acindar's president.

"This issue is part of the restructuring proposal. It is the
vehicle through which [Belo Horizonte-based] Belgo-Mineira will
capitalize its credits. We have increased the size of the bonds
in order to allow minority shareholders to participate in the
issue," said the official as quoted by the report.

Belgo Mineira currently owns 20% of Argentina's largest
integrated producer of long steel. The Acevedo family controls
another 20%, while the World Bank's International Finance
Corporation controls 7%. The rest of the shares are floated.

Acindar, which has been in default in November last year, issued
US$80 million of convertible bonds recently. The Company
presently faces US$220 million in debt.

The Company's principal activity is the production of non-flat
steel products such as steel pipe, cable, hot-rolled and cold-
drawn steels for concrete, forged bars and blocks for
distributors of steel products, other steel companies,
manufacturers of original equipment for several industrial
sectors including the automotive and the oil and gas industries
and end users, mainly in the construction and agricultural
sectors of the economy, according to the Financial Times.

Its principal market is Argentina, although it exports its
products to Brazil, Chile and the United States, Bolivia and
Uruguay through its sales office.

CONTACT:  Acindar Industria Argentina de Aceros S.A.
          2739 Estanislao Zeballos Beccar
          Buenos Aires
          Phone: +54 11 4719 8500
          Fax: +54 11 4719 8501
          Home Page:
          Contact:  Arturo Tomas Acevedo, Chairman

BANCO DE GALICIA: Faces Investigation By Securities Regulator
For being habitually late in reporting developments at its sister
bank, Banco de Galicia y Buenos Aires faces investigation from
the Comision Nacional de Valores (CNV), Argentina's securities
regulator. The CNV announced on Monday that it would look into
the actions of the bank's trustees and directors, relates Dow
Jones Newswires.

Banco de Galicia, one of the country's largest banks, is required
to report on developments at its sister bank, Banco Galicia de
Uruguay, which is suspended. The two banks are the main units of
financial group Grupo Galicia.

The CNV pointed out that on at least five occasions, the bank was
between four and seven days late in filing its reports on Galicia
Uruguay. These violations occurred between February and November

However, Dow Jones says that the group's stock was unaffected by
the news, closing at ARS1.25, up by 0.8%.

Banco de Galicia y Buenos Aires provides commercial banking
services, personal and car loans, pension fund management, life
insurance, automatic teller machines, letters of credit, credit
cards, mortgage financing, foreign currency transactions,
investment advisory services, electronic collections, custody of
securities, traveler's checks, deposits, checking and savings
accounts, and credit cards.

CONTACT:  Banco de Galicia Y Buenos Aires
          Tte Gral Juan D Peron 407
          Buenos Aires
          Phone: +54 11 6329 0000
          Fax: +54 11 6329 6100
          Home Page:
          Juan Martin Etchegoyhen, Chairman
          Antonio R. Garces, Vice Chairman

          Grupo Financiero Galicia SA
          2nd Floor
          No 456 Tte Gral Juan D Peron
          Buenos Aires
          Argentina 1038
          Phone: +54 11 4343 7528/9475
          Home Page:
          Atty. Abel Ayerza, Chairman

DISCO: To Contest AFIP's Claims
Disco, the Argentine unit of embattled Dutch retailer Ahold, was
scheduled to present Monday its argument regarding a local tax
agency's claim that the Company owes some ARS300 million ($101
million) in fines and back-taxes on bonds issued in 1998.

Reuters relates that the tax agency, AFIP, says Disco owes taxes
on US$350 million in bonds it issued in May 1998.

But, "Disco believes the agency's demands are unjustified and
have no legal basis," a spokesman for Disco supermarkets said.

The spokesman believes the tax dispute would not hold up Ahold's
planned sale of the Argentine retail chain, but a government
source familiar with the case told Reuters it would complicate

"We have asked that the company's assets be blocked. ... It goes
without saying this will complicate the sale," the source, who
requested anonymity, said.

Either Disco or the tax agency can sue in federal court if they
cannot resolve the dispute themselves. The Company expects the
administrative phase of the process to be resolved by year's end.

DISTRIBUTION SYSTEMS: Deadline For Credit Check Expires Today
The deadline for the credit verification process for the
bankruptcy of Buenos Aires-based Distribution Systems, S.A.
expires today, September 3, 2003.

The receiver, Mr. Edgardo Alberto Borghi, a local accountant,
will prepare the individual reports, which must be submitted to
the court on October 15. The general report is due for submission
on November 26, according to an earlier report from the Troubled
Company Reporter - Latin America.

Buenos Aires' Court No. 25 ordered the court's bankruptcy,
reported Infobae earlier.

CONTACT:  Mr. Edgardo Alberto Borghi
          Luis Valle 2176
          Buenos Aires

INSTELEC ELECTRONICA: Receiver Prepares Individual Reports
Buenos Aires Court No. 16 ordered Mr. Abel Gomez Meana, receiver
for local company Instelec Electronica S.R.L. to prepare the
individual reports, as the deadline for the credit verification
process expires today.

The Company is undergoing reorganization, which started when the
court approved its motion for "Concurso Preventivo". The court,
which works with Clerk No. 32 on the case, has set the deadlines
for the individual and general reports.

An earlier report by local news portal Infobae indicated that the
individual reports must be submitted to the court on October 25,
followed by the general report on November 26. The court also
ordered an informative assembly to be held on July 7 next year.

CONTACT:  Abel Gomez Meana
          Roque Saenz Pena 1219
          Buenos Aires

DUETO: Receiver Closing Credit Verification Process
Ms. Adriana Esnaola, receiver for Buenos Aires company, Dueto
S.A., closes the credit verification process for the Company's
reorganization today. The reorganization process now proceeds
with the preparations for the individual reports, which should be
presented to the court on October 17 this year.

An earlier report by the Troubled Company Reporter - Latin
America said that the City's Court No. 1, which is under Dr. Juan
Dieuzeide, approved the Company's motion for "Concurso
Preventivo", giving it permission to undergo reorganization.

Ms. Esnaola, a local accountant, is also required to prepare a
general report on the process. The court requires the individual
report to be submitted on November 28. An informative assembly is
set for June 4 next year.

          2nd Floor Office 4
          No. 1342 Rivadavia Ave.
          Buenos Aires

          Adriana Esnaola
          10th Floor G
          No. 615 Juncal St.

          Buenos Aires Court No. 1
          Dr. Juan Jose Dieuzeide
          Ground Floor
          No. 533 Libertad St.
          Buenos Aires

FOCAR POOL: Credit Verification Process Ends
The credit verification process for the reorganization of San
Isidro - based company Focar Pool S.R.L. ends today, according to
an earlier report by the Troubled Company Reporter - Latin
America. The Company's receiver, Mr. Antonio Florencio Canada
will prepare the individual reports, as instructed by the court.

Court No. 2 of the Civil and Commercial Tribunal of San Isidro
holds jurisdiction over the Company's case. The Court requires
the receiver to submit the individual reports on October 16. The
general report, on the other hand, should be presented to the
court on November 27.

Local news source Boletin Oficial reveals that an informative
assembly be held on June 3 next year.

CONTACT:  Focar Pool S.L.R.
          Bernabe Marquez 855
          San Isidro

PDL: Creditor's Request For Bankruptcy Approved
A petition seeking the bankruptcy of Buenos Aires-based company
PDL S.A., filed by its creditor, Cooperativa de Cr‚dito, Consumo
y Vivienda Florida Ltda., was approved by the city's Court No. 4.
A local source reveals that Dr. Ottolenghi, the insolvency judge
handling the case, works with Clerk No. 8, Dr. Anta.

The Company, which sells medical instruments, was placed in the
hands of the receiver, Mr. Victor Tomasi, the report says.
Creditors must present their claims to the receiver for
verification before October 14.

The receiver is also required to prepare individual and general
reports on the bankruptcy process. The source, however, did not
indicate whether the court has set the deadline for these
reports. At the end of the process, the Company's assets will be
liquidated to reimburse its creditors.

          3rd Floor Room 6
          Alicia Moreau De Justo 1720
          Buenos Aires

          Victor Tomasi
          Planta Baja D
          Ave. Acoyte 127
          Buenos Aires

PUENTES DEL LITORAL: Court Slaps Embargo on Accounts
A Buenos Aires commercial court put an embargo on toll
concessionaire Puentes del Litoral's bank accounts, following a
request by its subcontractor, Dutch Boskalis Ballast, which
claims payment of a US$35 million debt has been in default since
the beginning of 2002. Puentes del Litoral is made up of
Impregilo, Hotchief, Roggio and Sideco. It has a construction and
exploration contract for the route that links the cities of
Rosario and Victoria.

REPSOL YPF: 1H03 Argentine Investments Top $300M
Repsol YPF invested US$300 million and spent about ARS3.21
billion in royalties and taxes in Argentina during the first six
months of this year.

Business News Americas cited a Company statement saying that some
40% of its total assets are in Argentina. The Company added that
some US$1.1 billion has been invested in the country over the
last eighteen months.

A total of US$2 billion was spent with Argentine companies over
the last 18 months, the report adds. Repsol's expenses in the
country are concentrated in exploration and production.

Headquartered in Spain, Repsol's main activities include the
exploration, development and production of crude oil and natural
gas. It is also involved in the transportation of petroleum
products, liquefied petroleum gas (LPG) and natural gas;
petroleum refining; production of a wide range of petrochemicals
and marketing of petroleum products, petroleum derivatives,
petrochemicals, LPG and natural gas. Refining and marketing
accounted for 75% of 2002 revenues; exploration and production,
13%; gas and electricity, 7% and chemicals, 5%.

          Paseo de la Castellana 278
          28046 Madrid
          Phone: +34 91 348 81 00
          Fax: +34 91 348 28 21
          Home Page:
          Alfonso Cortina de Alcocer, Chairman
          Alfonso Cortina de Alcocer, CEO
          Carmelo de las Morenas Lopez, CFO

SOLBO: Court Orders Bankruptcy
Dr. Gutierrez Cabello, the insolvency judge in Buenos Aires'
Court No. 7 declared local car dealer Solbo S.A. bankrupt.
Working with Dr. Giardinieri, the city's Clerk No. 14, the judge
appointed Ms. Raquel Polak as the Company's receiver.

The ruling comes after the Company's creditor, Coafi S.A., sought
for the Company's bankruptcy for failing to meet its obligations
on some US$90,906 in debt.

Creditors have until October 24 this year to present their claims
for verification. After that, the receiver is required to prepare
individual and general reports on the process. However, local
sources did not indicate whether the court has set the deadlines
for these reports.

CONTACT:  Solbo S.A.
          Ave. Constrituyentes 6000
          Buenos Aires

          Raquel Pollack
          4th Floor Room 16
          Lavalle 1527
          Buenos Aires

TEXPO: Court Approves Creditor Petition For Bankruptcy
Buenos Aires' Court No. 21, which is under Dr. Paez Castaneda,
approved a motion for the bankruptcy of local company Texpo S.A.
recently. Fire Trucks and Equipment S.A., the Company's creditor
filed the petition on grounds that the Company failed to meet its
financial obligations to Fire Trucks.

The Court appointed Mr. Juan Facoltini as the Company's receiver,
with instructions to verify creditors' claims until April 27 next
year. The court instructed Mr. Facoltini to prepare individual
reports on the results of the credit verification process. A
general report is also required.

The Company, which is involved in the import-export business,
faces liquidation at the end of the bankruptcy process.

CONTACT:  Texpo S.A.
          7th Floor, Room 708
          Rivadavia 717
          Buenos Aires

          Juan Facoltini
          2nd Floor, Room 36
          Bernardo de Irigoyen 330
          Buenos Aires


C&W BARBADOS: Reports $41.6M Pre-tax Loss
Cable & Wireless (Barbados) Limited collected well over $200
million in domestic revenue during its last financial year, which
ran from April 1, 2002 to March 31, 2003.

However, according to a report published by The Barbados
Advocate, the Company reported a huge operating loss before tax
of $41.6 million during the period, compared to a profit of
$102.2 million for the comparative period ended March 31, 2002.

The adverse position stemmed from an impairment charge totalling
$88.5 million on its fixed assets, and $23.9 million in
restructuring costs.

Chairman Robert Lerwill explained a review of the Company's asset
base necessitated an impairment provision - mainly as it relates
to customer premises apparatus.

He also said that as with most telecommunications companies
worldwide, the restructuring process entails an analytical review
of the cost base and inevitably a reduction in staff, as
processes are re-engineered to create a more streamlined and
efficient organization.

Some of the highlights of the performance of the
telecommunications company include more than $20 million in
dividends to shareholders, a record $88.2 million in capital
expenditure, lower international revenues and higher costs.

Cable & Wireless saw a 3% increase in revenue. This amount was
given as $362.5 million, compared to the $353.4 million posted by
the C&W companies a year ago. Of that amount netted for the year
to March 31, 2003, domestic revenue was up 15% to reach $236.3
million, compared to $205.5 million, the previous year.

In addition, Mobile revenues were up 13% as a result of the 83%
growth in the mobile customer base.

International revenues fell from $131.9 million during the
2001/2002 year, to $116.8 million, during the year under review,
while costs were up 10%.

Cable & Wireless submitted an application for an adjustment to
its rates last month and is seeking at least $24 million from the


BCP: America Movil Acquires Interest
America Movil, S.A. de C.V. (America Movil) [BMV: AMX] [NYSE:
AMX] [NASDAQ: AMOV] [LATIBEX:XAMXL], announced Thursday that its
offer to acquire an interest in Brazilian Wireless Company BCP
S.A. has been accepted. The company's enterprise value, including
debt and equity, was set at US$625million. Such transaction is
subject to regulatory approvals. In like manner, America Movil
announces that it has entered into an agreement with Telemar
Norte Leste in which the latter has an option to acquire a stake
in the capital of BCP, S.A. Currently, BCP, S.A. has
approximately 1.7 million subscribers and covers a population of
around 19.2 million, operating in the metropolitan area of Sao


America Movil is the leading provider of wireless services in
Latin America. It has more than 36 million wireless subscribers
across the continent.

BCP: Analysts Surprise By America Movil's Strategy
America Movil's offer to share BCP with Telemar caught analysts
by surprise, reports Business News Americas. Telemar controls
mobile operator Oi, which competes against America Movil's
subsidiary Claro.

A likely scenario, according to Yankee Group analyst Luis Minoru,
is that the BCP deal is part of a larger asset-swapping agreement
whereby America Movil will give Oi access to Sao Paulo in
exchange for Oi giving America Movil access to Minas Gerais state
and Brazil's northern region, for which Claro does not have a

Meanwhile, Minoru and BES Securities analyst Carolina Gava
doesn't buy the idea that a joint venture in BCP could lead to a
future merger between Claro and Oi over the short or medium term,
even with all the consolidation pressures in Brazil's mobile
market. Telemar should be expected to take a large minority stake
in BCP, near 20%, Gava suggested.

CEMIG: Begins First Phase of Capim Branco Construction
With an aim to begin operations of the first of the two plants
that consist the Capim Branco hydroelectric power project in 29
months, Brazil's Minas Gerais state power company Cemig kicked
off construction of the first plant, which has 240MW capacity.

Citing a Cemig spokesperson, Business News Americas reveals that
construction work is being undertaken by a consortium of
Brazilian construction firms Andrade Gutierrez, Construtora
Norberto Odebrecht and Quieroz Galvao. A second consortium of
Germany's Voith Siemens and Vatec is supplying electro-mechanical
equipment, including three 80MW Francis turbines for Capim 1, the
spokesperson said.

The Capim Branco project requires total investment estimated at
BRL700 million (today US$235mn).

The second plant, which has 210MW capacity, is scheduled to begin
operations in 33.5 months.

Cemig owns 21.1% of the project, mining companies CVRD and CMM
own 48.4% and 12.6% respectively, and agricultural firm Comercial
e Agricola Paineiras owns 17.9%.

          Luiz Fernando Rolla, Investor Relations
          Phone:  + 011-5531-299-3930
          Fax: + 011-5531-299-3933

EMBRATEL: New Legal Director Assumes Post
Cl udia de Azerˆdo Santos was expected to take office Monday,
September 1st, as Embratel's new legal director, replacing Pedro
Batista Martins who had been in office since May of 1999.

The new director is highly skilled in corporate and financial
law, and has held important positions during her professional
career, like legal director of CSN for seven years, and legal
advisor of Aracruz Celulose for eight years.

To Cl udia Azerˆdo Santos the telecommunications industry
represents a new, major challenge, very typical of her
professional attitude: "I am really pleased to take office as
Embratel's legal director, because I will have the opportunity to
work in a totally new sector. Facing new challenges is part of my
professional profile, in addition to the passion for my work."

To Pedro Batista Martins, now leaving the job, being for more
than four years Embratel's legal director was extremely
rewarding. However, he is now dedicated to individual projects in
the arbitration sphere, where he has acquired a 20-year
experience. He was co-author of the Arbitration Law.

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:


EMBONOR: Embarks On Cost-Cutting Plan
Chile's second-largest Coca-Cola bottler, Embonor, is carrying
out a cost reduction plan as part of an attempt to reduce the big
debt burden it got when it acquired the Inchcape franchise in the

In 2003, Embonor wants to pay US$53 million of its debt, US$33
million of which will come from an important cost reduction.

The general manager of the firm, Andres Vicuna, stated that
Embonor is also planning to issue up to US$100 million in bonds.

Vicuna said Embonor's debt would amount to US$300 million by the
end of the year.

Additionally, the Company's sales started to show a slow but
steady upturn. They registered a 4.3% growth  - in volume - in
the first quarter and are expected to grow 6% by the end of the

CONTACT:  Coca Cola Embonor SA
          Piso 10
          Av Apoquindo 3721 Las Condes
          Phone: +56 299 1400
          Fax: +56 203 5021
          Home Page:
          Hernan Vicuna Reyes, Chairman

D O M I N I C A N   R E P U B L I C

BANCO MERCANTIL: Monetary Board Approves Sale To T&T Bank
Dominican Republic Central Bank Governor Jos‚ Lois Malkum
announced at a press conference Friday that The Monetary Board
has approved the sale of Banco Mercantil to the Republic Bank of
Trinidad and Tobago.

According to an article released by DR1 Daily News, the Republic
Bank of Trinidad and Tobago bought up 94.16% of Banco Mercantil,
formerly the seventh largest bank in the Dominican Republic.

All local investors in Mercantil lost their assets, which total
DOP1.5 billion, in the transaction, because the shares were
rendered worthless when Banco Mercantil lost all its capital.

The buyer will inject DOP1.25 billion into Banco Mercantil, which
will be reinforced by a guarantee of DOP6 billion from the
Central Bank to cover the bank's so-called "defective assets."
Likewise, in 2003 the Central Bank had issued advances,
rediscounts and other financial facilities for DOP3.1 billion to
the bank.

* IMF OKs US$600M Stand-By Arrangement for the Dominican Republic
The Executive Board of the International Monetary Fund (IMF)
approved Thursday a two-year SDR 437.8 million (about US$600
million) Stand-By Arrangement for the Dominican Republic to
support the country's economic program through August 2005. The
approval opens the way for the release of SDR 87.6 million (about
US$120 million) under the arrangement.

Following the Executive Board discussion, Agustin Carstens,
Deputy Managing Director and Acting Chairman, said:

"After a decade of strong growth and broad economic stability,
the Dominican economy is now facing major challenges. The failure
of a large bank because of fraud has hurt confidence in the
banking system and, together with the adverse effects of a
succession of external shocks, has weakened the economy. Output
has contracted, the currency has depreciated sharply and pushed
up inflation, and the historically low public debt-to-GDP ratio
has nearly doubled.

"The Fund welcomes the government's commitment to addressing
these challenges through a comprehensive economic program that
focuses on strengthening confidence in the banking system,
reversing the recent deterioration in the public finances, and
implementing a tight monetary policy to reduce inflation and the
immediate pressures on the currency.

"The strategy to restore confidence in the banking system has
four main planks. The first, already implemented, focused on
resolving the problems of identified weak banks. The second, now
under way, aims to assess the situation of the banking system as
a whole through internationally-assisted audits of all banks, and
to identify further necessary measures. The third will put in
place a legal and regulatory framework to deal with systemic
banking problems. The fourth plank is the enhancement of
prudential regulations and supervision.

"The Dominican Republic's tradition of sound fiscal policies and
low public debt needs to be restored. A key objective of the
program is to raise the fiscal primary surplus over the next
three years to a level that would allow a gradual reduction in
the public debt ratio over the medium term. In the near term, the
fiscal effort relies on expenditure compression and temporary
revenue measures. These initial steps will give way to a broader
reform of the tax system and of spending, as well as asset sales
to reduce public debt. Improved debt management also will help
reduce vulnerabilities, with greater emphasis on the domestic
market to meet the government's borrowing needs, and less
reliance on foreign currency debt.

"Monetary restraint will help contain pressures on the currency
and inflation. The flexible exchange rate regime is being
strengthened, with full unification of the dual exchange rate
markets expected by the end of the year.

"Over the medium term, efforts to open up the economy further,
including through trade liberalization, and to eliminate
infrastructural bottlenecks, especially in the power sector, will
help boost growth. At the same time, the authorities are making
additional efforts to reduce poverty, with improvements in the
efficiency and targeting of social programs. They have sought to
avoid cuts in social programs, and low-income households have
effectively been exempted from planned increases in electricity
prices. The authorities' program should lay the basis for
restoring the Dominican Republic's strong record of high growth
and economic stability," stated Mr. Carstens.


Recent economic developments

With real GDP growth averaging 6 percent in the 1990s, the
Dominican Republic was one of the fastest growing countries in
the region. The rise in oil prices combined with the events of
September 11, 2001 -and the ensuing slowdown in the world
economy- dented this strong record. Exports and tourism receipts
began falling in the second half of 2001, and the overall balance
of payments shifted into deficit.

The fiscal and monetary response of the authorities dampened the
economic slowdown, but exacerbated macroeconomic imbalances.
Despite some tax measures, the public sector deficit was allowed
to widen by a half-percentage point to 2.6 percent in 2002, with
a sharp increase in capital expenditure. Monetary conditions were
also eased as reserve requirements were reduced and the central
bank extended large liquidity assistance to a private bank,
Baninter, that began to experience liquidity problems. The
failure to sterilize liquidity support, and regulatory
forbearance, contributed to the continued expansion of credit,
which grew by 20 percent in 2002. The result was that real GDP
growth picked up slightly to 4 percent, but the peso depreciated
by 20 percent and inflation doubled to 10 percent. The central
bank lost about half of its foreign reserves. The defining moment
of the crisis was the failure of Baninter, the third largest
private bank, in the spring of 2003. Once accounting malpractices
and fraud were discovered, the bank was intervened. The central
bank kept Baninter open to prevent a systemic run and financed
the payout of its deposits, which fell some 80 percent. Problems
soon extended to other banks, Bancr‚dito and Banco Mercantil,
which were also affected by accounting malpractices and
mismanagement. Central bank assistance to problem banks
contributed to a near doubling in public debt.

As confidence weakened, so did macroeconomic indicators. Real GDP
in the first half of 2003 fell by about 1 percent, year-on-year,
as a decline in output in domestically driven sectors was only
partially offset by a strong recovery in exports and tourism. The
peso fell by 42 percent in the first seven months of the year and
12-month inflation rose to nearly 30 percent by July.

Program summary

The Dominican Republic's program aims to restore confidence in
the banking system and in the overall policy framework. The
program centers on a comprehensive banking strategy, steps to
limit the deterioration in the fiscal deficit, and a fully
flexible exchange rate policy accompanied by a tight monetary
policy. Real GDP is expected to contract by 3 percent in 2003 and
to recover only by 0.5 percent next year. Inflation is projected
to reach 35 percent in 2003 but to recede to single digit levels
in 2004. With domestic demand weak, the external current account
balance is projected to shift into surplus in 2003-04.

The strategy for the banking sector addresses the root causes of
the current bank problems, including the resolution of Baninter,
a solution for the problems of other weak banks, the
implementation of an improved bank resolution framework, and the
reinforcement of prudential regulation and banking supervision.
To uncover any remaining financial and governance problems in the
banking sector, the authorities have launched an internationally-
assisted audit of all banks, and the legal framework for dealing
with bank problems is being strengthened.

The program's fiscal policy aims to begin reversing the recent
jump in the public debt ratio. Stabilization of the debt requires
a major fiscal effort, given that the cost of servicing the debt
will more than triple to 4« percent of GDP in 2003 and rise
further to nearly 6 percent of GDP in 2004. The program envisages
a number of measures that would contain the combined public
sector deficit to 3.5 percent of GDP in 2003 and 2.5 percent of
GDP in 2004. The authorities are also determined to keep
expenditure under control.

On exchange rate and monetary policies, the program envisages a
full unification of the foreign exchange markets by end-2003.
Full unification by end-December would eliminate the possibility
of engaging in multiple currency practices arising from a
divergence of more than 2 percent at any given time between the
official and market exchange rates. Reducing inflation will also
be a key objective of monetary policy.

The Dominican Republic joined the IMF on December 28, 1945; its
quota is SDR 218.9 million (about US$300 million). Its
outstanding use of IMF credits totals SDR 4.96 million (about
US$6.8 million).

          700 19th Street, NW
          Washington, D.C. 20431 USA

          Public Affairs
          Phone: 202-623-7300
          Fax: 202-623-6278

          Media Relations
          Phone: 202-623-7100
          Fax: 202-623-6772


BANCO DEL PACIFICO: Paribas To Submit Valuation to Central Bank
French investment bank BNP Paribas, which has been awarded the
contract to manage the sale of Ecuador's state-owned bank Banco
del Pacifico, will submit a valuation of the latter to the
Ecuadorian central bank, Business News Americas reports, without
providing a date for the submission.

The valuation is one of the pledges with which the Ecuadorian
government must comply in order to receive new funding from the
International Monetary Fund (IMF).

According to Leopoldo Baez, general manager at the central bank,
which controls Pacifico, the valuation is a key step in the
process to sell the bank, something that is expected to happen by
September 2004.

Once the valuation has been presented, the central bank will
coordinate plans for BNP Paribas to take steps to identify
potential buyers of Pacifico.

Roberto Gonzalez, executive vice president of Pacifico, told Dow
Jones Newswires on Thursday that in the coming days the bank will
submit a report to the central bank on the state of the financial

During the first seven months of the year, the bank posted a net
profit of US$5.6 million. During the period, the bank granted
US$29 million in new credit and private deposits increased 10%.
The bank ended the period with US$625 million in total assets.

Pacifico was one of the banks taken into government receivership
during the country's 1998-1999 financial crisis. If the sale is
completed, the bank will be the first Ecuadorian bank to be re-
privatized since the crisis.

TELECSA: Accepts Ericsson's $68M Offer To Supply CDMA Network
Ecuadorian startup mobile operator Telecsa, a joint venture
between state-run fixed line operators Andinatel and Pacifictel,
accepted Ericsson's US$68-million bid to supply a CDMA network.

The information was revealed to Business News Americas by Peter
Burrowes, the representative of Telecsa administrator Swedish-
based Swedtel.

Ericsson will provide five-year financing with a two-year grace
period and a 4.58% interest rate, Burrowes said, adding the
contract calls for simultaneous deployment of CDMA 1900 and CDMA
2000 1xEV-DO technologies to ensure a competitive advantage.

Telecsa will launch initially in Quito, Guayaquil and surrounding
areas by December 1 and should be able to match rival operators'
coverage by late 2004. Improved coverage in cities and along the
highways connecting them should be complete by 2005, Burrowes


KAISER ALUMINUM: Chinese Firm Eyes Jamaican Assets
The Jamaican assets of Kaiser Aluminum Company, which are now on
the block, have attracted the interest of one of China's state-
owned companies.

China Minmetals Nonferrous Metals Company Limited is looking to
purchase the assets, according to a report released by Reuters

Citing an unnamed source, Reuters said China Minmetals is one of
the companies which will be conducting due diligence for the
Jamaican assets of Kaiser, which filed for protection from
creditors in February last year.

Reports have it that the Chinese metals trading company, which
has been hit by a global shortage in alumina following China's
expansion in aluminum production, is also considering buying
Kaiser's Gramercy alumina plant in Texas.

Under Kaiser's divestment plan, the Company will sell its 65%
share of Alpart and 49% stake at Kaiser Jamaica Bauxite Company
in Discovery Bay, St. Ann.


CFE: Shell To Supply LNG To Fire Thermo Power Plants
Mexican state power company CFE has awarded Anglo-Dutch oil
company Shell a 15-year contract to supply liquefied natural gas
to fire its thermoelectric power plants, reports Business News

The contract will see Shell building an LNG terminal at Altamira
in Tamaulipas state to supply the gas.

Previously, Shell managers have said that total investment would
be approximately US$300 million to build two storage tanks with
capacity of about 150,000 cubic meters each and capacity to
supply 425 million cubic feet a day.

IPD Latin America analyst Sergio Rosado revealed that Shell was
the only one to bid for the 15-year contract as many companies
have shied away from the tender because of problems securing LNG
supplies within the Atlantic basin.

LNG developers want firm supply contracts before they bid on
expensive LNG receiving terminals, but suppliers want LNG
developers to commit to building the terminals before they sign
contracts, Rosado said.

GRUPO TMM: Finance Ministry Seeks Proof of Tax Payments
Mexico's Finance Ministry said it would have to check whether
transport company Grupo TMM really paid the taxes that it seeks
to be refunded, Reuters reports, citing an unnamed spokesman from
the ministry.

Last week, TMM said a tax tribunal ruled in its favor on a value
added tax (VAT) refund valued at US$950 million to TMM's railroad
subsidiary Transportacion Ferroviaria Mexicana, or TFM.

TMM must now prove to the ministry that it did pay MXN2.11
billion, or some US$192 million, in VAT. If the Company shows
enough proof that it did, the case will move to a fiscal court,
which would then order the government to issue a certificate to
TFM to cover the VAT refund.

TMM claimed that when it purchased TFM, it paid around US$268
million in VAT based on the exchange rate prevailing in December
1996. The tax paid for the transaction, including inflation and
interest, totals some US$950 million to date.

          Jacinto Marina, Chief Financial Officer
          Brad Skinner, Senior Vice President
          Investor Relations
          011-525-55-629-8725 or 203-247-2420
          Marco Provencio
          Media Relations, Proa/StructurA
          011-525-55-629-8708 and 011-525-55-442- 4948
          Dresner Corporate Services
          (general investors, analysts and media)
          Kristine Walczak, 312-726-3600

PEMEX: Deadline for Submission of CSM Applications Extended
Petroleos Mexicanos (Pemex) said it will extend by four weeks the
period in which it will accept applications for its CSM
(Contratos de Servicios Multiples) contracts for the Monterrey-
Reynosa, Mision, Cuervito and Corindon-Pandura blocks.

The process was originally scheduled to close sometime in
September but according to South American Business Information,
the process is being extended in order to give interested
companies more time to prepare their proposals.

The deadline for the applications for CSM contracts for the
Fronterizo, Ricos and Olmos blocks are also expected to change.

This process is the culmination of two years of intense debate
over the constitutionality of the contracts.

Some energy sector consultants, such as Cambridge Energy Research
Associates, have predicted that there would be few companies
interested in the concessions because not all the blocks are
attractive for investors given their size. Only four of the seven
blocks are large.

The CSMs are expected to boost Mexico's production of natural gas
by 1bil cubic feet per day and attract investments to the tune of
US$10 million.


VOLCAN: Takes On Glencore's Offer
Peruvian zinc miner Volcan announced it has accepted an offer
from Swiss resources group Glencore International to become the
Company's strategic partner.

Citing a filing with the Lima stock exchange, Business News
Americas reports that Volcan's board gave green light to a US$40-
million credit from Glencore to be paid off over seven years with
two years' grace at a rate of Libor plus 3.5%. The credit will be
guaranteed by Volcan's Andachagua assets, part of the cash-
strapped company's Yauli unit in central Junin department, Volcan

The offer also includes a long-term commercial agreement from
2004-2010 covering the sale of a part of Volcan's production of
zinc, lead and copper concentrates, at "international market
terms and conditions," the filing said.

At the same time, the board authorized management to complete
negotiations with a banking syndicate, led by Germany's WestLB,
to restructure a US$110 million loan.

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

T R I N I D A D   &   T O B A G O

BWIA: Profitability Likely by Year-End, Says Minister
Trinidad and Tobago Trade and Industry Minister, Ken Valley, told
reporters at the post Cabinet news conference on Thursday
afternoon that cash-strapped BWIA is expected to return to
economic viability by December 31, The Antigua Sun reports.

The announcement came after the airline reported a TT$61.9-
million (US$10.3 million) operating loss for the first half of
this year. According to the minister, the airline has informed
the government that it did not expect to require immediate
funding for about a month.

The Patrick Manning administration has pledged TT$116 million to
the airline under certain conditions, which include a reduction
in its operating costs; increased production by flight staff; a
review and revision of executive compensation contracts and all
other salaries of employees; as well as a review and revision of
the airline's policy on free and rebated tickets to staff.

Valley said if the airline can return to economic viability by
the target date, the government would consider asking the public
to invest in it.

But he told reporters "cold hard cash" was needed to provide a
sustainable platform for the airline and, "We may ask the public
to buy into the airline, including members of the media".

Valley said that a government team recently returned from Miami
where they held talks with the International Lease Finance
Corporation (ILFC) that seized two of the Company's aircraft for
its failure to meet a three million US dollar debt, earlier this

He said the meetings were aimed at working out a program for the
sustainability of BWIA. He described the talks as going "quite
well" but that there were "one or two more issues to be

He said the airline would be seeking to lease new aircraft from
ILFC and that the government has informed the Company that it was
willing to guarantee the maintenance schedule of the aircraft to
international standards.

Meanwhile, Valley revealed that BWIA will launch its inaugural
flight to the Dominican Republic on 18 Nov. He assured that the
government was committed to supporting the route over the next
two years, following its earlier inaugural flights to Costa Rica
and Cuba.

CONTACT:  British West Indies Airways
          Phone: + 868 627 2942
          Home Page:

BWIA: AATT Finalizing Evaluation of Application For Reviewer
Officials from the Airports Authority are close to completing
their evaluation of the local and international consultants who
have applied for the job of reviewing BWIA operations, the
Trinidad Guardian reports, citing AATT chairman Linus Rogers.

AATT, which was given the responsibility of hiring a consultant
to look at BWIA's operations, didn't reveal the exact date when
it would hire a consultant but Rogers said hiring would come in


CITGO: Contributes Record-Breaking $7 Million to MDA
The employees, branded marketers and business associates of CITGO
Petroleum Corporation presented a record-breaking $7 million
contribution to the Muscular Dystrophy Association (MDA) and
Jerry's Kids Monday on the Jerry Lewis Labor Day Telethon in Los
Angeles, Calif.

CITGO's 2003 contribution represents a 27 percent increase over
the 2002 contribution of $5.5 million. Also, the number of CITGO
marketers who participated in this year's fund-raising efforts
increased to 245 in 2003 from 189 in 2002.

Each year CITGO's top six fund-raising marketers from the
previous year are invited to present their check at the Jerry
Lewis Labor Day Telethon. This year's marketer representatives
and their company's qualifying totals include:

--  Gene Fuller - Granite Capital Holdings (New York)   $228,000
--  Jinger Duryea - C.N. Brown Company (Maine)          $224,600
--  Barry Trilla - Texor Petroleum (Illinois)           $214,000
--  Ron Ford - 4 Front Petroleum (Oklahoma)             $160,000
--  Don Smith - Huron Smith Oil Company (Mississippi)   $145,000
--  Roy Foutz - Petroleum Marketers, Inc. (Virginia)    $100,000

"CITGO is proud of our employees, branded marketers and business
associates for their tremendous fund-raising efforts this year.
Their hard work emphasizes their obvious commitment to helping
people cope with these devastating neuromuscular diseases," said
Luis Marin, CITGO's President and Chief Executive Officer.

CITGO became a national sponsor of MDA in 1986. Over the life of
the sponsorship, CITGO's marketers, employees and business
associates have raised more than $57 million for MDA. Employees
throughout the company and CITGO's marketers conduct fund-raising
events during the year and are pleased that they can offer hope,
help and friendship to individuals who are affected by
neuromuscular disease.

CITGO, based in Tulsa, Okla., is a refiner, transporter and
marketer of transportation fuels, lubricants, petrochemicals,
refined waxes, asphalt and other industrial products. The company
is owned by PDV America, Inc., an indirect wholly owned
subsidiary of Petroleos de Venezuela, S.A., the national oil
company of the Bolivarian Republic of Venezuela.

DAEWOO MOTORS: Tax Regulators Order Asset Embargo
Venezuelan tax authorities ruled an embargo on the assets of
Korean Daewoo Motors local subsidiary, due to a supposed tax
evasion. Jos‚ Vielma Mora, head of Venezuelas tax bureau - SENIAT
explained that there was suspicion of a possible US$8.3 million
tax evasion. According to SENIAT, the company has been ignoring a
series of summons that urged it to comply with its tax

PDVSA: Postpones Refinery Shutdown Until Next Weekend
Instead of shutting down part of a refinery in Curacao for
maintenance this week, Venezuela's state oil company PDVSA will
shut down the refinery next weekend, reports Bloomberg.

Without giving any reason for the delay, a plant spokeswoman said
PDVSA will temporarily close next weekend La Isla refinery's
distillation unit, which processes 35,000 barrels a day of (b/d)
of oil used to make fuel, gasoline and other products.

According to the source, the shutdown, the Company's third since
a two-month labor strike ended February 1, will reduce output at
La Isla to about 165,000b/d from its current 190,000-195,000b/d,
but deliveries and exports won't be affected because the refinery
has inventories.

The refinery will resume normal operations in the first week of
October, the spokeswoman added.


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,
delivered via e-mail.  Additional e-mail subscriptions for
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or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.

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