TCRLA_Public/031016.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, October 16, 2003, Vol. 4, Issue 205

                          Headlines


A R G E N T I N A

AGINEL: Court Approves Petition For Reorganization
AGRISUR INT: Court Sets Reorganization Process Schedule
ARIDOS CUMAN: Court Orders Bankruptcy
BANCO PROVINCIA: Restructures Private Debt to Foreign Creditors
BAUTISTA: Court Assigns Receiver For Bankruptcy Proceedings

BEGET: Court Approves Creditor's Bankruptcy Petition
CABLEVISION: Extends Debt Offer Until October 20
DE LA TORRE: Claims Filing Due by November 7
DIRECTV LA: Parent Posts Wider Loss Despite More Subscribers
EDEMSA: Argentine S&P Assigns Default Ratings To $150M of Bonds

EDICIONES AZTECA: Receiver Closes Verifications For Bankruptcy
ELECTROMECANICA NOVEL: Individual Reports Due Today
EXPEDITIVA CONSTRUCTORA: Court Orders Bankruptcy
FELTA: Court Assigns Receiver For Reorganization
FOCAR POOL: Individual Reports Due Today

GATIC: Seeks Financing to Reopen Plants
GROUP WISE: Court Converts to Bankruptcy in Mid-Reorganization
KISTEL: Claims Verified in Ordinary Course For Bankruptcy
MULTICANAL: $719M of Bonds Rated 'raD' by Local S&P
NACSA: Individual Reports Due For Filing Today

NUEVO BANCO: Banco de San Juan Officially New Owner
SOPHI: Receiver Ends Claims Verification Period
TRANSPORTE 2000: Reorganization Ends In Bankruptcy


B E R M U D A

TYCO INTERNATIONAL: Court Affirms $24M Judgment


B R A Z I L

CEMAR: Largest Creditor Likely To Become Major Shareholder
CESP: S&P Upgrades Credit Rating to 'CCC', Outlook Negative
LIGHT SERVICOS: Defers Interest Payments Pending BNDES Funds


C H I L E

ENDESA CHILE: Feller Gives A+ Rating to Solvency, Bonds
NEXTEL CHILE: Mobile Operators Go To Supreme Court
TELEFONICA CTC: CRA Allows Usage Rates Freedom


C O L O M B I A

CHEC: Government Prepared to Liquidate Remaining Stake


D O M I N I C A N   R E P U B L I C

*IMF Closes 2003 Article IV Consultation with the DR


E L   S A L V A D O R

CTE: El Salvador Struggles to Find Interest In Stock Offering


M E X I C O

ALESTRA: Struggles To Retain AT&T Brand License
CNI CANAL: In Talks To Sell Majority Stake
DESC: Fitch Cuts Ratings To B+, Watch Negative Continues


P E R U

AEROCONTINENTE: May Fight Chile in International Court
PAN AMERICAN: To Temporarily Cease Peruvian Mining Operations


V E N E Z U E L A

PDVSA: Considers Qatar Participation In Mariscal Sucre Project
PDVSA: Hurt by Orimulsion Freeze


     - - - - - - - - - -


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

AGINEL: Court Approves Petition For Reorganization
--------------------------------------------------
Aginel S.R.L., which is based in Las Flores, Cordoba, receives
permission to undergo reorganization from the province's Court
No. 29. Argentine news portal Infobae relates that the province's
Civil and Commercial Tribunal approved the Company's motion for
"Concurso Preventivo".

Local accountant Antonio Elias Am was designated as the Company's
receiver. He will verify creditors' claims and prepare the
necessary reports. The individual reports must be submitted to
the court on November 25 this year. After these are processed at
the court, the receiver will prepare the general report, which is
to be submitted on February 24, 2004.

The informative assembly will be held on August 12 next year. The
Company's assets will likely be liquidated at the end of the
bankruptcy process to pay its creditors.

CONTACT:  Aginel S.R.L.
          Napoles 3110 Las Flores
          Cordoba

          Antonio Elias Am
          Avenida Velez Sarsfield 468
          Cordoba


AGRISUR INT: Court Sets Reorganization Process Schedule
-------------------------------------------------------
Buenos Aires Court No. 20 ordered the receiver for Agrisur Int
S.A. to verify creditors' claims until December 5 this year. The
Company, which is undergoing reorganization, is currently in the
hands of its designated receiver, Mr. Ricardo Felix Fernandez.

The receiver will then relay to the court the results of the
verification process through the individual reports. These are to
be submitted to the court on February 18 next year. After the
reports are processed at court, the receiver will prepare the
general report, which must be filed on March 31 next year.

Working with Clerk No. 39, the court ordered the informative
assembly to be held on August 27 next year.

CONTACT:  Agrisur Int S.A.
          Lavalle 2762
          Buenos Aires

          Ricardo Felix Fernandez
          Tucuman 1567
          Buenos Aires


ARIDOS CUMAN: Court Orders Bankruptcy
-------------------------------------
Aridos Cuman S.A., which is domiciled in Buenos Aires, enters
bankruptcy on orders from the city's Court No. 18. Argentine news
source Infobae relates that the court declared the Company
officially "Quiebra", or bankrupt.

Mr. Norberto Molire, an accountant from Buenos Aires, was
assigned as the Company's receiver. He is instructed to verify
creditors' claims until February 23 next year. The receiver's
duties also include the preparation of the individual and general
reports. However, the source did not mention whether the court,
which is assisted by the city's Clerk No. 35, has decided on the
deadlines for the filing of these reports.

CONTACT:  Aridos Cuman S.A.
          Florida 520
          Buenos Aires

          Norberto Molire
          Avenida Rivadavia 2530
          Buenos Aires


BANCO PROVINCIA: Restructures Private Debt to Foreign Creditors
---------------------------------------------------------------
Argentine government-run bank Banco Provincia, or BAPRO,
announced last week it has refinanced nearly all of its private
debt to foreign creditors. According to information gathered by
financial newspaper Infobae, BAPRO had to restructure US$290
million in debt of which only US$5 million owed to Credit
Agricole are still pending. The latter also owes BAPRO US$1
million and the Argentine bank would have proposed to net these
values and reschedule the remaining sum, but Credit Agricole
would be reluctant to accept the offer.

BAPRO's debt-refinancing proposal was accepted by the rest of the
creditors because they took into account that it consisted on
repaying the debt within a longer term but maintaining the
original amount.


BAUTISTA: Court Assigns Receiver For Bankruptcy Proceedings
-----------------------------------------------------------
Mr. Osvaldo Nicolini, is designated as receiver for the
bankruptcy of Buenos Aires-based company Bautista S.A., relates
Argentine news source Infobae. The city's Court No. 18, which
handles the Company's case, orders the credit verification
process to be done 'por via incidental'.

The general report, which is prepared after the individual
reports are processed at court, will be submitted to the court on
October 31 this year. The source did not mention the deadline for
the filing of the individual reports, which are done upon
completion of the verification process.

CONTACT:  Osvaldo Nicolini
          Alvarez Thomas 3036
          Buenos Aires


BEGET: Court Approves Creditor's Bankruptcy Petition
----------------------------------------------------
Judge Fernandez of Buenos Aires' Court No. 19 approves a petition
for the bankruptcy of local auto dealer Beget S.A., relates local
news source La Nacion. The city's Clerk No. 37, Dr. Mazzoni aids
the court on the process.

The source reveals that the Company's failure to meet its
financial obligations to Xerox Argentina S.A.I.C. prompted the
later to file the bankruptcy petition at the court. Buenos Aires
accountant Beatriz Muraga, who designated as the Company's
receiver, will verify creditor's claims until February 5 next
year.

The source, however, did not mention whether the court has set
the deadlines for the filing of the individual and general
reports, which are to be prepared by the receiver.

CONTACT:  Beget S.A.
          5ht Floor, Room A
          Mansilla 3050
          Buenos Aires

          Beatriz Muruaga
          4th Flor
          Aguero 1290
          Buenos Aires


CABLEVISION: Extends Debt Offer Until October 20
------------------------------------------------
Argentine cable company Cablevision SA informed the Buenos Aires
stock exchange Tuesday that it has extended its debt-
restructuring offer on US$797 million in defaulted debt until
Oct. 20, relates Dow Jones. The Company, in a statement to the
bourse, said that at the close of the previous offer period at
5:00 p.m. EDT on Oct. 10, holders of approximately US$265.8
million of the potential US$725 million worth of eligible bonds
had agreed to the Company's offer.

According to the report, the offering carries two different
options: First, to swap old bonds for new restructured debt and
second, a cash offer to buy back some US$270 million with a 63%
discount to face value. The second option will be funded with
US$99.9 million contribution shared by Cablevision's two main
shareholders, Hicks Muse, Tate & First and Liberty Media Corp.
The offering needs two-thirds approval by all bondholders to
proceed, says the report.


DE LA TORRE: Claims Filing Due by November 7
--------------------------------------------
Creditors of bankrupt Argentine company De La Torre S.A. must
present their claims to the Company's receiver for verification
before the November 7 deadline expires. This part of the
bankruptcy process is done to determine the nature and amount of
the Company's debts.

The receiver, Buenos Aires accountant Ruben Eduardo Calcagno,
will prepare the individual reports on the results of the
verification process. These reports are to be submitted to the
city's Court No. 22, which issued the bankruptcy order, by
December 22 this year.

After the individual reports are processed at court, the receiver
will prepare the general report, which is to be presented to the
court on March 8 this year, relates local news portal Infobae.

CONTACT:  Ruben Eduardo Calcagno
          Rodriguez Pena 431
          Buenos Aires


DIRECTV LA: Parent Posts Wider Loss Despite More Subscribers
------------------------------------------------------------
Hughes Electronics Corporation ("HUGHES"), a world-leading
provider of digital television entertainment, broadband satellite
networks and services, and global video and data broadcasting,
today reported that third quarter 2003 revenues increased 17% to
$2.57 billion compared with $2.19 billion in the third quarter of
2002. Operating profit before depreciation and amortization(1)
for the quarter increased 33% to $359 million compared with $270
million in the same period last year. Operating profit increased
to $77 million compared with operating profit of $16 million in
the third quarter of 2002. In addition, HUGHES reported a third
quarter 2003 net loss of $23 million compared to a net loss of
$14 million in the same period of 2002.

"This quarter's results are yet another indication of the rather
significant changes we have made across our company to
continuously improve operational performance. Compared to last
year, each of our businesses generated higher revenues and
operating profit before depreciation and amortization in the
quarter," said Jack A. Shaw, HUGHES' president and chief
executive officer. "Importantly, DIRECTV U.S. had its second best
quarter ever in terms of gross owned and operated subscriber
additions, and the 326,000 net new subscribers added in the
quarter represented a 58% increase over last year's third
quarter. I believe that this sharp increase in DIRECTV's
subscriber growth reflects consumers' desire for DIRECTV's
superior, all digital television programming as well as their
continued dissatisfaction with their cable television service."

Shaw continued: "At the top line, DIRECTV U.S. once again was the
major contributor to our growth in the quarter with a nearly 20%
increase in revenues driven by continued strong subscriber growth
and a $4.50 increase in average monthly revenue per subscriber to
$63.70. Hughes Network Systems -- or HNS -- also contributed to
HUGHES' growth with a 17% increase in revenues principally due to
strong sales in its enterprise and residential DIRECWAY broadband
businesses, as well as in its set-top box business. Driven by the
gross profit on this revenue growth, DIRECTV U.S. and HNS were
also the primary contributors to HUGHES' 33% growth in operating
profit before depreciation and amortization."

Shaw finished: "We're also demonstrating significant improvement
in our cash flow -- which we define as cash flows from operating
activities plus cash flows from investing activities -- where,
for the third quarter in a row, HUGHES generated positive cash
flow. Also for the third consecutive quarter, HUGHES is
increasing its full-year guidance for revenues, operating profit
and cash flow primarily due to the strong DIRECTV U.S. and HNS
results in the third quarter as well as the continued solid
results expected for the remainder of the year."

HUGHES' operating profit increased to $77 million in the third
quarter of 2003 from $16 million in the same period of last year.
The improvement was due to the higher operating profit before
depreciation and amortization partially offset by higher
depreciation and amortization, primarily at DIRECTV U.S. due to
the reinstatement of amortization expense during the fourth
quarter of 2002 related to certain intangible assets in
accordance with Emerging Issues Task Force ("EITF") Issue No. 02-
17, as well as additional infrastructure expenditures during the
last year.

HUGHES recorded a third quarter 2003 net loss of $23 million
compared to a net loss of $14 million in the same period of 2002.
The higher net loss was primarily due to a $159 million pre-tax
gain in 2002 resulting from the sale of 8.8 million shares of
Thomson Multimedia common stock and a third quarter 2003 non-cash
charge of $65 million recorded as "Cumulative effect of
accounting change, net of taxes" related to the adoption of FASB
Interpretation No. 46 ("FIN 46"). These changes were partially
offset by the higher 2003 operating profit discussed above, the
favorable resolution of certain tax refund claims for $48 million
in the quarter, a $32 million write- down of two equity
investments and a pre-tax loss of $25 million related to the sale
of SkyPerfecTV! common stock in the third quarter of 2002, and
the absence of net losses in 2003 at DIRECTV Broadband due to its
shutdown on February 28, 2003.

NINE-MONTH FINANCIAL REVIEW

For the first nine months of 2003, revenues increased 12% to
$7.17 billion, compared to $6.41 billion in the first nine months
of 2002. The increase was primarily due to continued subscriber
growth and higher average monthly revenue per subscriber ("ARPU")
at DIRECTV U.S. as well as increased sales in the residential
DIRECWAY® broadband business at HNS, partially offset by lower
DIRECTV Latin America revenues related to the World Cup
programming services in 2002 as well as a smaller subscriber base
and further devaluations to several Latin American currencies in
2003.

Operating profit before depreciation and amortization for the
first nine months of 2003 was $1.07 billion compared with $586
million in the same period of 2002. Operating profit before
depreciation and amortization margin was 15% compared to 9% in
the first nine months of 2002. The 82% increase in operating
profit before depreciation and amortization and the corresponding
increase in margin were primarily attributable to the additional
gross profit gained from the DIRECTV U.S. revenue growth, reduced
losses from the 2002 World Cup programming at DIRECTV Latin
America and improved efficiencies associated with HNS' larger
residential DIRECWAY subscriber base. Also impacting the 2002
operating profit before depreciation and amortization results was
a charge of $48 million related to a settlement with GECC and a
$95 million one-time gain due to the favorable resolution of a
lawsuit filed against the U.S. government on March 22, 1991.

HUGHES' operating profit for the first nine months of 2003 was
$258 million compared with an operating loss of $170 million in
the same period of 2002. The improvement was due to the higher
operating profit before depreciation and amortization discussed
above partially offset by higher depreciation and amortization
expense, particularly at DIRECTV U.S. resulting from the
reinstatement of amortization expense related to certain
intangible assets in accordance with EITF Issue No. 02-17 during
the fourth quarter of 2002, as well as additional infrastructure
expenditures during the last year.

For the first nine months of 2003, HUGHES had a net loss of $52
million compared to a net loss of $1.01 billion in the same
period of 2002. The improvement was primarily due to a first
quarter 2002 charge associated with HUGHES' adoption of Statement
of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
Other Intangible Assets" of $681 million, recorded as "Cumulative
effect of accounting change, net of taxes." Also contributing to
the change was the improved 2003 operating profit discussed
above, a 2002 net interest expense charge of $74 million related
to the GECC settlement and higher losses in 2002 at DIRECTV
Broadband. These improvements were partially offset by the $159
million pre-tax gain on the sale of Thomson shares in 2002, a
higher income tax benefit generated in 2002 resulting from the
larger pre- tax loss and the $65 million charge related to the
adoption of FIN 46 in 2003.

SEGMENT FINANCIAL REVIEW: THIRD QUARTER 2003

Direct-To-Home Broadcast

Third quarter 2003 revenues for the segment increased 18% to
$2.09 billion from $1.76 billion in the third quarter of 2002.
The segment had operating profit before depreciation and
amortization of $222 million compared with $177 million in the
third quarter of 2002. Operating profit for the segment was $42
million in the third quarter of 2003 compared to $21 million in
the same period of 2002.

On February 28, 2003, HUGHES completed the shutdown of the
DIRECTV DSL(TM) service. As a result, DIRECTV Broadband is
accounted for as a discontinued operation in the consolidated
financial statements and its revenues, operating costs and
expenses, and non-operating results are no longer included in the
Direct-To-Home Broadcast segment for the periods presented.

United States(2): Excluding subscribers in the National Rural
Telecommunications Cooperative ("NRTC") territories, DIRECTV U.S.
added 811,000 gross subscribers and after accounting for churn,
326,000 net subscribers in the quarter. DIRECTV U.S. owned and
operated subscribers totaled 10.28 million as of September 30,
2003, 12% more than the 9.20 million subscribers as of September
30, 2002. For the third quarter of 2003, the total number of
subscribers in NRTC territories fell by 32,000, reducing the
total number of NRTC subscribers as of September 30, 2003, to
1.57 million. As a result, the DIRECTV U.S. platform ended the
quarter with 11.85 million total subscribers.

DIRECTV U.S. reported quarterly revenues of $1.93 billion, an
increase of 20% over last year's third quarter revenues of $1.62
billion. The increase was primarily due to continued strong
subscriber growth as well as higher ARPU. ARPU increased
approximately $4.50, or 8%, to $63.70 in the quarter primarily
due to the March 2003 price increase, additional fees from the
increased number of customers that have multiple set-top
receivers, the adoption of EITF Issue No. 00-21 that relates to
the recognition of certain customer-related revenues, increased
revenues from the NFL SUNDAY TICKET® package and increased
customer purchases of local channels.

Operating profit before depreciation and amortization for the
third quarter of 2003 increased 15% to $235 million compared to
$205 million in last year's third quarter. The increase was due
to the additional gross profit gained from the increased
revenues, an improved mix of higher-margin revenues primarily
related to fees from customers that have multiple set-top
receivers and increased sales of local channel packages, and the
favorable impact from a continued emphasis on cost management.
These were partially offset by increased marketing expenses
associated with the larger gross subscriber additions and higher
acquisition costs per subscriber ("SAC") in the quarter.

Operating profit in the quarter increased to $112 million
compared to $102 million in the third quarter of 2002. The
improved operating profit was primarily due to the reasons
discussed above for the change in operating profit before
depreciation and amortization partially offset by the
reinstatement of amortization expense related to certain
intangible assets in accordance with EITF Issue No. 02-17 during
the fourth quarter of 2002, as well as increased depreciation
expense due to additional infrastructure expenditures during the
last year.

Latin America: On March 18, 2003, DIRECTV Latin America, LLC
announced that in order to aggressively address the company's
financial and operational challenges, it had filed a voluntary
petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The filing applies only to DIRECTV Latin
America, LLC, a U.S. company, and does not include any of its
operating companies in Latin America and the Caribbean. DIRECTV
Latin America, LLC and its operating companies are continuing
regular operations.

The DIRECTV® service in Latin America lost 44,000 net subscribers
in the third quarter of 2003 mostly due to significantly higher
involuntary churn in Mexico resulting from changes in
disconnection processes associated with past-due subscribers. The
total number of DIRECTV subscribers in Latin America as of
September 30, 2003, was 1.45 million compared to 1.60 million as
of September 30, 2002, representing a decline of 10%.

Revenues for DIRECTV Latin America increased to $155 million in
the quarter from $146 million in the third quarter of 2002
primarily due to the consolidation of the local operating
companies in Puerto Rico and Venezuela in accordance with HUGHES'
adoption of FIN 46, partially offset by lower revenues from the
smaller subscriber base.

DIRECTV Latin America recorded an operating loss before
depreciation and amortization of $17 million in the quarter
compared to an operating loss before depreciation and
amortization of $29 million in the same period of 2002. The
operating loss in the quarter was $74 million compared to an
operating loss of $84 million in the third quarter of 2002. These
improvements were primarily due to aggressive cost cutting over
the past year including programming cost reductions resulting
from the rejection of certain contracts in connection with the
Chapter 11 reorganization, partially offset by reduced revenues
associated with the smaller subscriber base.

Satellite Services

PanAmSat Corporation ("PanAmSat"), which is approximately 81%-
owned by HUGHES, generated third quarter 2003 revenues of $210
million compared with $199 million in the same period of the
prior year. The increase was primarily due to additional
government revenues related to PanAmSat's new G2 Satellite
Solutions(TM) division, which was formed after the acquisition of
Hughes Global Services on March 7, 2003, and an increase in
network service revenues.

PanAmSat's operating profit before depreciation and amortization
for the quarter was $152 million compared with $145 million in
the third quarter 2002. Operating profit remained relatively
unchanged at $67 million in the third quarter of 2003. The
increase in operating profit before depreciation and amortization
was primarily due to lower bad debt expense and improved
operational efficiencies. The operating profit was also impacted
by higher depreciation expense primarily related to the shorter
estimated useful lives of two satellites that experienced
anomalies in 2003.

As of September 30, 2003, PanAmSat's contracts for satellite
services representing future payments (backlog) declined to
approximately $4.8 billion compared to approximately $5.3 billion
at the end of the second quarter of 2003 primarily due to reduced
contract values related to a satellite anomaly.

Network Systems

HNS generated third quarter 2003 revenues of $353 million
compared with $300 million in the third quarter of 2002. The 17%
increase was principally due to higher revenues in the enterprise
and residential DIRECWAY® broadband businesses, and increased
sales of DIRECTV® receiver systems. HNS shipped 946,000 DIRECTV
receiver systems in the third quarter of 2003 compared to 737,000
units in the same period last year. Additionally, as of September
30, 2003, the DIRECWAY service had approximately 178,000
residential subscribers in North America compared to 138,000 one
year ago, representing an increase of approximately 29%.

HNS reported operating profit before depreciation and
amortization of $9 million compared to an operating loss before
depreciation and amortization of $23 million in the third quarter
of 2002. The operating loss in the quarter was $10 million
compared to an operating loss of $43 million in the third quarter
of 2002. These improvements were primarily attributable to a
smaller loss in the residential DIRECWAY business due to improved
efficiencies associated with the larger subscriber base,
increased revenues and profit margins in the set-top box and
DIRECWAY enterprise businesses, as well as a $9 million charge
taken in the third quarter of 2002 related to severance costs and
an inventory provision.

BALANCE SHEET

From December 31, 2002, to September 30, 2003, HUGHES'
consolidated cash balance increased $1.50 billion to $2.63
billion and total debt increased $1.58 billion to $4.70 billion.

In the third quarter, HUGHES' consolidated cash balance decreased
by $558 million and debt decreased by $311 million compared to
the June 30, 2003, balances. During the quarter, HUGHES generated
over $100 million of cash flow (cash flows from operating
activities plus cash flows from investing activities) bringing
the total cash flow generated by HUGHES to approximately $400
million through September 30, 2003. Also in the quarter, HUGHES
and The Boeing Company reached an agreement whereby HUGHES paid
Boeing $360 million to settle the outstanding purchase price
adjustment disputes arising from Boeing's October 2000
acquisition of HUGHES' satellite manufacturing operations. This
payment will be reported as "Net cash used in discontinued
operations" in the Condensed Consolidated Statements of Cash
Flows. Additionally, PanAmSat made an optional prepayment of $350
million in the quarter under its $1.25 billion bank facility from
available cash on hand. The prepayment was applied pro rata
against PanAmSat's Term Loan A and Term Loan B.

During 2003, DIRECTV U.S. completed several financing
transactions, which included $1.40 billion of borrowings under a
senior notes offering and approximately $1.23 billion of
borrowings under a $1.68 billion credit facility. Approximately
$2.56 billion of the proceeds from the financings were
distributed to HUGHES to repay $506 million of outstanding short-
term debt and to fund HUGHES' business plan through projected
cash flow breakeven.

Hughes Electronics Corporation is a unit of General Motors
Corporation. The earnings of HUGHES are used to calculate the
earnings attributable to the General Motors Class H common stock.

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


EDEMSA: Argentine S&P Assigns Default Ratings To $150M of Bonds
---------------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
issued default ratings to corporate bonds issued by Empresa
Distribuidora de Electricidad de Mendoza S.A., relates the
country's securities regulator, Comision Nacional Valores (CNV).
The 'raD' rating applies to US$150 million worth of bonds called,
"Programa de emisión de Obligaciones Negociables simples", the
CNV relates. The bonds are classified under "program" and are set
to mature on April 13, 2005.

The rating, which was based on the Company's finances as of the
end of June this year, is assigned to financial obligations that
are currently in default, the ratings agency said. The rating is
also used when the obligor has filed for bankruptcy or when
interest or principal payments are not made on the due date, even
if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace
period.


EDICIONES AZTECA: Receiver Closes Verifications For Bankruptcy
--------------------------------------------------------------
Creditors of Buenos Aires-based company Ediciones Azeteca S.A.
must have their claims authenticated by the Company's receiver as
the deadline for verifications expires today. This part of the
Company's bankruptcy process determines the amount and nature of
the Company's debts.

According to an earlier report by the Troubled Company Reporter -
Latin America, the deadline for the individual reports is
November 28 this year. The receiver, Mr. Jacobo Becker will
prepare these reports once the verifications are completed.

The receiver is also required to submit a general report to the
city's Court No. 10, which handles the case, on February 13 next
year. This report will be prepared after the individual reports
are processed at court.

CONTACT:  Jacobo Becker
          Salguero 2244
          Buenos Aires


ELECTROMECANICA NOVEL: Individual Reports Due Today
----------------------------------------------------
Buenos Aires' Court No. 19 expects the receiver for the
bankruptcy of local company Electromecanica Novel S.R.L. to file
the individual reports today. These reports contain the results
of the credit verification process concluded earlier.

After these reports are processed at court, the receiver, Mr.
Aldo Roberto Markman, will prepare the general report, which is
to be submitted to the court on November 27 this year, according
to an earlier report by the Troubled Company Reporter - Latin
America.

CONTACT:  Aldo Roberto Markman
          Adolfo Alsina 1441
          Buenos Aires


EXPEDITIVA CONSTRUCTORA: Court Orders Bankruptcy
------------------------------------------------
Buenos Aires' Court No. 15 declares local company Expeditiva
Constructora S.R.L. bankrupt. The Court ruled that the Company is
"Quiebra", relates local news portal Infobae.

Working with the city's Clerk No. 10, the court assigned Ms. Eva
Gorsd as receiver for the process. Creditors have until December
10 this year to make claims on the Company. The receiver is
required to prepare the individual and general reports on the
process. However, the source did not mention whether the court
has chosen the deadlines for the submission of these reports.

CONTACT:  Expeditiva Constructora S.R.L.
          Avenida Callao 312
          Buenos Aires

          Eva Gorsd
          Paraguay 1225
          Buenos Aires


FELTA: Court Assigns Receiver For Reorganization
------------------------------------------------
Buenos Aires accountant Claudio Haimovici takes over as receiver
for Felta S.A., which is undergoing reorganization. Argentine
news portal Infobae relates that the receiver will verify
creditors' claims until December 12 this year.

The city's Court No. 2 recently approved the Company's motion for
"Concurso Preventivo", giving it the go signal to reorganize.
Clerk No. 3 assists the court on the case, the source adds. The
receiver is also required to prepare the individual and general
reports on the process. However, the source did not mention
whether the court has set the deadlines for the submission of
these reports.

CONTACT:  Felta S.A.
          Arenales 1115
          Buenos Aires

          Claudio Haimovici
          Sarmiento 3843
          Buenos Aires


FOCAR POOL: Individual Reports Due Today
----------------------------------------
Mr. Antonio Florencio Canada, the receiver for San Isidro-based
company Focar Pool S.R.L., must submit the individual reports for
the Company's reorganization today. These reports are prepared
after the credit verification process was closed. Local news
source Boletin Oficial reported that an informative assembly will
be held on June 3 next year.

An earlier report by the Troubled Company Reporter - Latin
America indicated that Court No. 2 of the province's Civil and
Commercial Tribunal issued the bankruptcy order, and designated
the Company's receiver. The court also requires the receiver to
prepare a general report to be submitted on November 27. The
receiver is to prepare the report after the individual reports
are processed at court.


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


GATIC: Seeks Financing to Reopen Plants
---------------------------------------
Argentine textile concern Gatic said it is looking for capital in
order to reopen its plants and get over the crisis it has been
going through for several years. The company has all of its
plants out of operation and wants to solve its crisis through a
commercial restructuring program.

With this goal in mind, the Company has started to negotiate with
the government a possible financial aid and has also held talks
with private investors that may inject working capital in
exchange for a stake in the firm.

Gatic started to default in the payments of its debt on July 24,
2001, with US$340 million in liabilities. The Company initiated
its formal restructuring proceeding in the end of 2001 and a
couple of months ago, the proceeding was approved by court. The
Company obtained a 30% write-off in the amount of debt.


GROUP WISE: Court Converts to Bankruptcy in Mid-Reorganization
--------------------------------------------------------------
Court No. 3 of the Civil and Commercial Tribunal of the Argentine
province of Cordoba orders the bankruptcy of local company Group
Wise S.R.L., reports Infobae. The Company was undergoing
reorganization when the court issued the bankruptcy order, the
source adds.

Mr. Carlos Alberto Ortiz, a Cordoba accountant, takes charge as
the Company's receiver. His tasks include the verification of
creditors' claims until October 31 this year, and the preparation
of the individual and general reports. The source, however, did
not reveal the deadlines for the filing of the receiver's
reports.

CONTACT:  Group Wise S.R.L.
          Punilla 2066
          Cordoba

          Carlos Alberto Ortiz
          Arturo M Bas 60
          Buenos Aires


KISTEL: Claims Verified in Ordinary Course For Bankruptcy
---------------------------------------------------------
The credit verification process for the bankruptcy of Argentine
company Kistel S.A. will be done 'por via incidental', Buenos
Aires Court No. 13 ordered. The city's Clerk No. 25 assists the
court on the case.

A report by local news portal Infobae indicates that the Company
was undergoing the reorganization process before it entered
bankruptcy. Mr. Joel Leib Kahane was assigned as the Company's
receiver. His duties include the verification of creditors claims
and preparation of the individual and general reports.

CONTACT:  Joel Leib Kahane
          Reconquista 715
          Buenos Aires


MULTICANAL: $719M of Bonds Rated 'raD' by Local S&P
---------------------------------------------------
A total of US$719 million of bonds issued by Argentine company
Multicanal S.A. garnered default ratings from the local arm of
Standard & Poor's International Ratings, Ltd. last Thursday. The
Comision Nacional Valores, Argentina's securities regulator
relates that the 'raD' rating was based on the Company's finances
as of June 30, 2003.

The rating applies to the following bonds:
-- US$125 million of "Obligaciones Negociables simples, con
vencimiento a 10 anos, autorizada poa AGOyE de fecha 7.10.96",
due on February 1, 2007. These were classified under "Simple
Issue"

-- US$125 million of "Obligaciones Negociables simples, con
vencimiento a 5 anos, autorizadas por AGOyE de fecha 7.10.96",
which matured in February last year, and classified under "simple
issue".

-- US$150 million of "SERIE C, bajo el Programa de U$S 1050
millones", due on April 15, 2018. These were classified under
"series and/or class".

--US$175 million of "Serie E de Ons, bajo el Programa de U$S 1050
millones", also under "series and/or class". The maturity date
was given as April 15, 2009.

-- Also under "series and/ or class", another US$144 million of
bonds called "Serie J de ON bajo el Programa de ON de USD 1050
MM", with indisclosed maturity date.

According to S&P, an obligation is rated 'raD' when it is in
payment default, or the issuer has filed for bankruptcy. The
rating may also be given when interest or principal payments on
the bonds are not made on time.


NACSA: Individual Reports Due For Filing Today
----------------------------------------------
The individual reports for the bankruptcy of Chaco-based company
Nacsa S.R.L. must be submitted to the province's Civil and
Commercial Tribunal today. The Company's receiver prepared these
reports after the credit verification process was completed.

An earlier report by the Troubled Company Reporter - Latin
America indicated that the receiver, Ms. Rosa Itati Dri, will
also prepare the general report after the individual reports are
processed at court. This report must be filed at the court on
November 27.

The Company's assets will likely be liquidated at the end of the
bankruptcy process to reimburse its creditors.

CONTACT:  Nacsa S.R.L.
          Monte Alto 223
          Chaco

          Rosa Itati Dri
          Entre Rios 338
          Chaco


NUEVO BANCO: Banco de San Juan Officially New Owner
---------------------------------------------------
Argentine bank Banco de San Juan emerged as the winner in the
race for control of Nuevo Banco de Santa Fe SA, offering ARS133
million for the bank's acquisition. According to a La Nacion
report, Banco de San Juan will take over control of Nuevo Banco
beginning October 28 with Enrique Eskenazi as the latter's new
chairman.

Nuevo Banco went into receivership earlier this year and its
administration was taken over by ABN Amro. Nuevo Banco has 105
branches and 1,300 employees.


SOPHI: Receiver Ends Claims Verification Period
-----------------------------------------------
Buenos Aires accountant Mario Kahan, who is receiver for the
bankruptcy of Sophi S.A. closes the credit verification process
today. This part of the bankruptcy process establishes the amount
and nature of the Company's debts.

The city's Court No. 4, which holds jurisdiction over the
Company's case, orders the receiver to prepare the individual
reports on the results of the verification process, the Troubled
Company Reporter - Latin America reported earlier. The receiver
is also instructed to prepare the general report after the
individual reports are processed at court.

Local sources, however, did not reveal the deadlines for the
filing of the receiver's reports.

CONTACT:  Mario Kahan
          Lavalle 2306
          Buenos Aires


TRANSPORTE 2000: Reorganization Ends In Bankruptcy
--------------------------------------------------
Transporte 2000 S.A., which was undergoing reorganization enters
bankruptcy on orders from Buenos Aires' Court No. 19, relates
local news portal Infobae. The Company is placed in the hands of
local accountant Fernando Daniel Torella, who was chosen as the
Company's receiver.

The court, working with Clerk No. 37, orders the receiver to
verify creditors' claims until November 10 this year. The
receiver will present the results of the verification to the
court through the individual reports, which are to be passed on
February 3, 2004.

The general report, which is prepared after the individual
reports are processed at court, must be filed on March 17 next
year. The Company's assets face liquidation at the end of the
bankruptcy process.

CONTACT:  Transporte 2000 S.A.
          E Ochoa 428
          Buenos Aires

          Fernando Daniel Torella
          Arcos 3726
          Buenos Aires



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

TYCO INTERNATIONAL: Court Affirms $24M Judgment
-----------------------------------------------
The United States Court of Appeals for the Ninth Circuit has
affirmed a $24 million judgment in favor of Tyco Electronics
Corporation against electronic components manufacturer Bourns,
Inc.

The lawsuit was initiated in 1994, when Raychem Corporation
(subsequently acquired by Tyco Electronics) sued Bourns and
former Raychem employee Steve Hogge for misappropriating trade
secrets and interfering with employee contracts.  Bourns then
filed a countersuit alleging that Raychem had monopolized
commerce in various markets with its PolySwitch(TM) polymeric
positive temperature coefficient thermistors, which are used for
resettable circuit protection.

Following the consolidation of the two lawsuits, and trials in
1998 and 2000, Tyco Electronics was awarded $24 million on its
claims against Bourns and Hogge.  Although Bourns had originally
sought damages in excess of $1 billion on its counterclaims, it
was awarded just $105,000 on its antitrust claims against Tyco
Electronics.

Both parties appealed to the United States Court of Appeals for
the Ninth Circuit.  In June 2003 the Court of Appeals unanimously
affirmed the $24 million judgment in favor of Tyco Electronics on
all claims against Bourns. The Court of Appeals also reversed in
its entirety the judgment in favor of Bourns against Tyco
Electronics, and held that Bourns had failed to establish
"antitrust injury."  In August 2003 the Court of Appeals denied
Bourns' request for a rehearing, effectively ending the dispute.
"We are very pleased with the outcome in this case," said Justin
Chiang, General Manager of Tyco Electronics' Power Components
Group.  "We feel that Tyco Electronics and Raychem have been
completely vindicated.  We have invested heavily in our
intellectual property over the years and will continue to defend
our trade secrets and more than 100 patents worldwide related to
polymeric PTC technology."

About Tyco Electronics

Tyco Electronics is one of the major business segment of Tyco
International Ltd. (NYSE: TYC, LSE: TYI, BSX: TYC).  Tyco
Electronics is the world's largest passive electronic components
manufacturer; a world leader in cutting-edge wireless, active
fiber optic and complete power systems technologies; and is also
rapidly developing extensive networking and building technology
installation services. Tyco Electronics provides advanced
technology products from over forty well-known and respected
brands, including Agastat, Alcoswitch, AMP, AMP NETCONNECT,
Buchanan, CII, CoEv, Critchley, Elcon, Elo TouchSystems, M/A-COM,
Madison Cable, OEG, OneSource Building Technologies, Potter &
Brumfield, Raychem, Schrack, Simel and TDI Batteries.

CONTACT:  Nick Rottler of Tyco Electronics Power Components
          Phone: +1-800-227-7040
          Email: nrottler@tycoelectronics.com

          Tom Donnelly of Tyco  Electronics
          Phone: +1-717-592-5366
          Email: tadonnel@tycoelectronics.com

          Gary Holmes of  Tyco International
          Phone: +1-609-720-4387
          Email: gholmes@tyco.com



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

CEMAR: Largest Creditor Likely To Become Major Shareholder
----------------------------------------------------------
Brazil's federal electricity holding Centrais Eletricas
Brasileiras (Eletrobras) is sending out signals that it could
become a shareholder in a bankrupt utility, in which it is the
biggest creditor, by converting part of its debt into stock,
reports Dow Jones.

Brazil's power sector regulator Aneel was due to close Cemar's
(Companhia Energetica do Maranhao) data room last week. However,
it extended the closure until Friday to grant a request by
Eletrobras, which sought more time to provide additional
information to interested investors about debt-rescheduling
proposals for Cemar.

Although Eletrobras hasn't provided details on a possible deal,
it has signaled it may convert part of the debt owed by Cemar
into Eletobras shares.

Aneel is taking another crack at selling the bankrupt power
distributor, a unit of U.S.-based PPL Corp. (PPL). Saddled with
more than BRL800 million in debt, Cemar came under Aneel's
administration after filing the Brazilian equivalent of Chapter
11 bankruptcy in August last year.

At the time, Cemar failed to renegotiate its debt with creditors.
PPL wrote off its US$317 million investment in Brazil, but
officially still holds Cemar's concession license.

Since earlier this year, when Cemar went on the auction block for
the first time, potential investors have been calling for the
pardon of about 40% of Cemar's debt, most of which is owed to
Eletrobras, and its northeastern generating unit Eletronorte. The
remaining 60% would be rescheduled in medium-to-long-term
payments.

Eight companies have recently requested financial data on Cemar.
After Friday's closure of the "data room", Aneel will analyze
preliminary proposals by interested investors and will announce
by November 4 a list of eligible bidders, after hearing PPL's
opinion.

The short-listed bidders will have until December 1 to present a
comprehensive debt-rescheduling proposal for Cemar. The winning
proposal will be announced December 23 and the transfer of
control has been scheduled for December 29, Aneel said.

CONTACT:  COMPANHIA ENERGETICA DO MARANHAO
          Av. Colares Moreira, 477
          65075-441 - Sao Luiz- MA
          PHONE: (98) 217-2119
          FAX: (98) 235-3024
          WEBSITE: http://www.cemar.com.br/

CREDITORS:  CENTRAIS ELETRICAS BRASILEIRAS S.A. - ELETROBRAS
            Avenida Presidente Vargas 409, 13 Andar
            20071-003 Rio de Janeiro Brazil
            Phone: (21) 2514-5151
            Fax: +55-21-2242-2697
            Home Page: http://www.eletrobras.gov.br
            Contacts:
            Cladio da Silva avila, President
            Jose Alexandre Nogueira de Resende, Director of
                                  Financial and Market Relations

            Investor Relations Division
            Phone: (0XX21) 2514-6207 / 2514-6333
            Av. Presidente Vargas, 409 - 9  andar
            20071-003 - Rio de Janeiro - RJ
            Email: arlindo@eletrobras.gov.br

            CENTRAIS ELETRICAS DO NORTH DO BRAZIL - ELETRONORTE
            Av. Presidente Vargas, 489 -13  andar.
            20071-003- Rio do Janeiro RJ
            Phone: + (55+61) 429 5139
            Fax: +(55+61) 328 1373
            E-mail: elnweb@eln.gov.br
            Home Page: http://www.eln.gov.br/
            Contact:
            Mr. Arlindo Soares Castanheira, Investor Relations
            Phone: 55 21 2514.6331
                   55 21 2514.6333
            Fax: 55 21 2242.2694
            E-mail: arlindo@eletrobras.gov.br


CESP: S&P Upgrades Credit Rating to 'CCC', Outlook Negative
-----------------------------------------------------------
Standard & Poor´s Ratings Services said Tuesday it raised its
global scale foreign currency and local currency corporate issuer
and issue ratings on Brazilian utility Companhia Energetica de
Sao Paulo (CESP) to 'CCC'. The rating assigned to CESP in the
Brazil national scale was also raised to 'brCCC' from 'SD'. The
outlook is negative.

The ratings actions follow a review of CESP's financial profile
after completion of an exchange offer proposed by the company in
July 2003.

"Even considering the new maturity schedule of the notes, we
believe the company will continue to have difficulties to meet
its significant debt requirements in the short term," said
Standard & Poor's credit analyst Juliana Gallo.

Given CESP's weak cash generation and its very limited financial
flexibility, its capacity to meet its sizable maturities derive
exclusively from further negotiations with existing creditors,
the largest of which is the federal government.

The current ratings reflect the following concerns:

-- Severe drop in CESP's revenues and cash flow generation due to
low demand for energy, which has impaired the company's capacity
to close new contracts to replace the initial contracts. The
amount of energy sold by initial contracts was reduced by 25%
since January 2003, and by another 25% from January 2004 on. The
company still has about an average 600 MW of free energy to be
negotiated in 2003 and 2004;

-- Deterioration of its cash flow-protection measures due to the
currency's volatility;

-- High debt burden and significant refinancing need in the short
term, even after the debt restructuring; and

-- Regulatory risk, which remains a significant concern until
there is further definition on the new framework being proposed
by the Ministry of Mines and Energy, and how the transition to
the new model will be implemented.

These weaknesses are partially mitigated by the following
strengths:

-- Proven capacity to operate its six hydropower plants,
constantly generating more power than stated capacity;

-- Strategic location in the state of São Paulo, the most
industrialized and richest state of Brazil; and

-- Low-cost producer.

The negative outlook on CESP's ratings reflect the low degree of
predictability of the company's revenues and cash flow level as
initial contracts are ramping down and are still not completely
renegotiated. Besides, weak cash flow measures associated with
heavy debt burden shows that CESP will depend on further
negotiations with its existing creditors to resolve such
maturities. The ratings can be lowered depending on the
conditions under which these payments are negotiated.

ANALYST:  Juliana Gallo
          Sao Paulo
          Phone: (55) 11-5501-8948

          Milena Zaniboni
          Sao Paulo
          Phone: (55) 11-5501-8945


LIGHT SERVICOS: Defers Interest Payments Pending BNDES Funds
-------------------------------------------------------------
Brazilian power distributor Light Servicos de Eletricidade, which
is controlled by French-based Electricite de France (EdF),
delayed interest payments to private creditors amounting to US$30
million.

The utility, which has total indebtedness of US$1.4 billion,
plans to makes these payments after receiving injection from the
national development bank BNDES as part of the latter's
capitalization plan for the sector. Light expects to receive
between US$200 million and US$300 million from BNDES.

Meanwhile, EDF may inject between US$270 million and US$350
million.

CONTACT:  LIGHT SERVICOS DE ELETRICIDADE S.A.
          Avenida Marechal Floriano, 168
          20080-002 Rio de Janeiro, Brazil
          Phone: +55-21-2211-2794
          Fax:   +55-21-2211-2993
          Home Page: http://www.lightrio.com.br
          Contact:
          Bo Gosta Kallstrand, Chairman
          Michel Gaillard, President and CEO
          Joel Nicolas, Executive Director, Operation
          Paulo Roberto Ribeiro Pinto, Executive Director,
                                 Investor Relations and CFO



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

ENDESA CHILE: Feller Gives A+ Rating to Solvency, Bonds
-------------------------------------------------------
Chilean generator Endesa obtained an A+ rating on its solvency
and bonds from local credit rating agency Feller Rate, reports
Business News Americas. In addition, Feller classified Endesa
shares at First Class Level 2. The outlooks on all the ratings
are stable.

The ratings reflect the Company's financial position after
closing negotiations of a US$743-million syndicated credit in May
2003, leaving some US$480 million to pay by the due date, and the
Company's US$600 million bond issue onto the international
markets in July 2003.


NEXTEL CHILE: Mobile Operators Go To Supreme Court
--------------------------------------------------
Three Chilean mobile operators went to the Supreme Court to
appeal a ruling that they interconnect with trunking operator
Nextel Chile. The operators, Entel PCS, Telefonica Movil,
Smartcom PCS and BellSouth Chile, which are against Nextel's
plans to provide cellular telephone services in the country,
earlier filed their appeal with the appeals court. However, the
appeals court rejected their request, saying the operators'
complaints were illegal. The court further ordered the four
operators to pay a CLP1.5-million fine and to cover the cases'
costs.

The appeals court's decision prompted the operators, excluding
BellSouth Chile, to resort to the Supreme Court.

Chile's fixed and cellular telephone services providers were
ordered to give Nextel access to the country's network in April
2003. The fixed line operators have not created any problems to
the Company's plans but the cellular telephone operators have
tried to deny access to Nextel, the analog trunking network
operator, by filing official complaints against the operation.


TELEFONICA CTC: CRA Allows Usage Rates Freedom
----------------------------------------------
Chile's dominant telecom operator Telefonica CTC gained authority
from the antitrust commission (CRA) to set its own prices,
Business News Americas indicates. On Monday, the CRA voted
unanimously to give Telefonica CTC permission to vary the cost of
local telephony across different regions. The decision reaffirms
CRA's decision in May in which it indicated that CTC should be
given some freedom to set its own rates.

A CRA spokesperson rejected recent accusations by some
competitors and politicians that the Chilean government forced a
CRA member, who opposed freedom for CTC, to resign, paving the
way for a more amenable commissioner to be appointed.

The spokesperson said the resignation of Sergio Espejo was a
"coincidence" and that Monday's ruling is part of CRA's standard
procedures for analyzing antitrust cases.

Monday's ruling will be included in the regulated tariff decree,
currently being prepared by telecom regulator Subtel and
scheduled to take effect from May 2004, a Subtel spokesperson
told Business News Americas.

CONTACT:  TELEFONICA CTC CHILE
          Gisela Esobar, gescoba@ctc.cl
          Veronica Gaete, vgaete@ctc.cl
          M.Jos, Rodriguez, mjrodri@ctc.cl
          Florencia Acosta, macosta@ctc.cl
          Tel: 562-691-3867
          Fax: 562-6912392



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

CHEC: Government Prepared to Liquidate Remaining Stake
------------------------------------------------------
Colombian President Alvaro Uribe Velezas revealed that the
government is ready to sell its 28% stake in Caldas department
utility Chec to municipal and regional authorities, relates
Business News Americas.

According to Mr. Uribe, energy minister Luis Ernesto Mejia has
sent a letter asking the governor of Caldas department and the
mayor of department capital Manizales to negotiate the conditions
and price of the shares. One of the conditions is to have the
department create a social fund so that Chec clients become part-
owners in the utility.

The sale is not a privatization, Mr. Uribe said, pointing out the
fact that Medellin utility EPM, which recently purchased a 56%
stake in the Company, is a municipally-owned company.

The state's stake in Chec fell to 28% from 50% when EPM bought
in. Municipal and regional authorities have 17%.



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

*IMF Closes 2003 Article IV Consultation with the DR
----------------------------------------------------
On August 29, 2003, the Executive Board of the International
Monetary Fund (IMF) concluded the Article IV consultation with
the Dominican Republic.

Background

After a strong economic performance during 1992-2000, the
Dominican Republic economy is facing a serious crisis. The
country experienced a series of external shocks, starting in
2001, including a rise in oil prices, the September 11 events,
and the ensuing economic slowdown in the United States and
Europe. However, the country faced a bigger shock in 2003 with
the failure of a large private bank following revelations of
fraud. The banking problems contributed to pressures on the peso
and to a sharp rise in public sector debt. Economic activity has
weakened and inflation is expected to rise to an annual rate
close to 35 percent in 2003 reflecting the weaker exchange rate.
With a drop in consumer confidence and investment, economic
activity has declined by around 1.5 percent so far in 2003, and
is projected to decline by 3 percent for the year as a whole,
after rising by 4 percent in 2002.

The banking crisis arose mainly from governance problems that
went undetected for many years, including accounting
malpractices, mismanagement, and fraud. Unregistered liabilities
amounting to several times registered deposits were found in
Baninter, the third largest bank in the country at the time. This
bank was intervened by the Central Bank in April 2003 and was
granted considerable liquidity assistance to prevent contagion
and protect the payments system. However, contagion soon extended
to two other medium-sized banks with management deficiencies.
These banks have also been assisted by the Central Bank, and are
currently being restructured. The authorities have launched a
comprehensive program to strengthen the banking system, including
conducting audits of banks, reinforcing the legal framework for
bank resolution, and strengthening prudential regulation and bank
supervision.

To compensate for this assistance and mop up liquidity, the
Central Bank issued large amounts of certificates, leading to
increases in quasi-fiscal losses of the central bank, the public
sector debt, and the combined fiscal deficit. Public sector debt
has increased to around 45 percent of GDP, from around 26 percent
in 2002, raising concerns about debt sustainability. To address
these concerns, the authorities have taken a number of measures
to contain the deterioration in the public finances, including
expenditure cuts and new revenue measures, including a tax on
checks, an import surcharge, and other temporary measures.
Further measures and reforms are envisaged for the coming months
and the public sector deficit is projected to be contained at 3.5
percent of GDP in 2003.

Exports and tourism have recovered so far in 2003, and imports
have fallen as a result of the downturn in the domestic demand
and the sharp real depreciation of the peso. The external current
account has shifted into a surplus of about 1 percent of GDP in
the first half of the year, from a deficit of 4 percent in 2002.
The financial account has weakened sharply, despite the placement
of a US$600 million sovereign bond in early 2003; foreign direct
investment has declined and there have been capital outflows. Net
international reserves fell by about US$65 million in the first
half of the year bringing gross international reserves to around
US$500 million at end-June, or less than 1 month of imports.

Executive Board Assessment

Directors recalled that the Dominican Republic had long been one
of the fastest growing and stable countries in the region, they
focused on the policy framework that would help the economy
recover from recent shocks, notably the after-effects of
September 11, 2001 and, especially, the recent banking crisis
that was triggered by massive fraud. This crisis has induced a
substantial depreciation of the peso, a sharp increase in
inflation, and a deceleration in economic activity.

Directors endorsed the authorities' policy package to address the
severe consequences of these shocks. They expressed confidence
that the authorities' strategy-which centers on improving
governance, accountability and oversight of the banking system,
and strengthening the public finances-will help reverse the
recent slowdown in growth, the overshooting of the depreciation
of the peso, and the associated sharp increase in inflation.

Directors welcomed the recent actions the authorities have taken
to strengthen the banking sector, including dealing with three
weak banks and the steps to avoid further contagion. A number of
Directors regretted that the bank oversight structure had not
caught signs of the banking problems at an earlier stage-
especially in light of the recently completed Financial Sector
Assessment Program. Directors agreed with the high priority given
to the immediate assessment of the health of the banking system
through internationally assisted inspections of banks, and urged
prompt corrective actions in response to any weaknesses that are
identified. They also supported the measures to strengthen the
legal framework, prudential regulations, and bank supervision.
Restoring public confidence in the supervisory framework is of
the essence, and Directors welcomed the authorities' commitment
to initiate an inquiry into regulatory lapses that contributed to
the delay in discovering the banking fraud.

Directors observed that the public debt ratio has increased
sharply to almost 50 percent of GDP as a result of currency
depreciation and the assistance provided to the banking system.
Therefore, they favored an increase in the primary fiscal surplus
to enable the authorities to offset some of the higher cost of
servicing debt, and allow a gradual reduction in the debt ratio
over the medium term. The authorities are working through legal
channels to attach the assets of shareholders of banks where
fraud has been found, and any recoveries from the sale of such
assets would also help limit the public costs of bank resolution.
Directors also welcomed the actions undertaken by the authorities
to avoid a bailout of the former owners. Forensic audits will
seek to establish the responsibility of former owners and
managers for the banks' losses.

Against this background, Directors supported steps to raise
revenue and curtail expenditure to limit the budget deficit in
the period ahead. They stressed the importance of the
authorities' plan to replace expenditure compression and
temporary revenue measures with comprehensive tax and expenditure
reforms, which will be key to generating higher primary surpluses
over the medium term. Directors urged the authorities to advance
approval of a tax reform to broaden the base of consumption and
income taxes, and to seek prompt approval of budgetary reforms to
improve the efficiency of public spending. They also noted that
the sale of public assets could contribute to the reduction of
public debt over the medium term.

Directors emphasized the need to protect the poor from the
effects of the crisis, and to shield social spending from
expenditure cuts, as poverty remains high. They welcomed the
authorities' efforts to improve the efficiency of social programs
and subsidies, including through better targeting. Directors also
welcomed the steps to reduce the impact on the poor of
electricity price increases. However, they noted that the
effectiveness of electricity subsidies could be improved by
better targeting.

Directors considered that a tight monetary stance will be crucial
to limit pressures on the exchange rate and bring inflation back
to single digits. Particular care is needed to ensure that
liquidity support provided to individual banks does not result in
excessive monetary expansion in the system as a whole. Directors
favored greater reliance on market-based instruments to achieve
monetary targets, and welcomed the recent start of open market
operations through auctions for central bank paper.

Directors welcomed the decision to unify the exchange market and
the authorities' commitment to a fully flexible exchange rate
policy. They supported the steps that are being taken to
eliminate the multiple currency practice arising from the
existence of an official exchange rate and a market rate for
current exchange transactions, and approved this multiple
currency practice until September 30, 2003.

Directors considered that the realization of the Dominican
Republic's considerable medium-term growth potential requires
structural reforms beyond the banking, governance, and fiscal
areas. In particular, it will be important to open up the economy
further to international trade and investment and to eliminate
infrastructural bottlenecks, especially in the power sector,
where high electricity tariffs hamper competitiveness. In this
context, Directors emphasized the urgency of placing the power
sector on a sustainable financial basis, and they encouraged the
authorities to work closely with the World Bank to implement
reforms in these areas.

Directors welcomed the significant progress the Dominican
Republic has made in recent years in combating money laundering
and the financing of terrorism, and encouraged the authorities to
build on this success in the context of strengthening the
financial system.



=====================
E L   S A L V A D O R
=====================

CTE: El Salvador Struggles to Find Interest In Stock Offering
-------------------------------------------------------------
The government of El Salvador is due to close the sale of its 14%
stake in Compania de Telecomunicaciones de El Salvador (CTE) on
October 17. But as of October 8, less than 2% of the total shares
on offer had been sold.

According to a report released by Business News Americas,
residential subscribers are reluctant to take up the government's
offer, and the government's sale manager, Banco Hipotecario, has
not pushed the offer because local politicians have been
threatening to pass laws halting the sale.

The government hopes to raise some US$204 million from the sale
of the stake, the report suggests.



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

ALESTRA: Struggles To Retain AT&T Brand License
-----------------------------------------------
Debt-laded Mexican long distance operator Alestra said it has
been notified by shareholder, AT&T, that it will not be able to
use the AT&T brand name anymore unless a debt restructuring is
completed successfully.

Alestra markets all of its services under the AT&T brand name
under a licensing agreement that expires on October 16, 2004,
Business News Americas reports, citing a Company filing with the
US Securities & Exchange Commission (SEC).

"AT&T has told us that if the existing senior notes are
restructured pursuant to a non-consensual Mexican bankruptcy or
liquidation case or a non-consensual US bankruptcy case, they do
not intend to renew the licensing agreement with us," Alestra
said in the filing.

The Company recently extended its offer to restructure US$570
million in senior notes to October 17.

AT&T owns 49% of Alestra while Onexa - a joint venture between
local bank BBVA Bancomer and Mexican industrial group Alfa -
holds the other 51%.


CNI CANAL: In Talks To Sell Majority Stake
------------------------------------------
Discussions regarding the sale of a majority stake in the
embattled news channel CNI Canal 40 is underway, according to a
report released by the Daily Variety. Reports have it that the
51% stake, owned by Javier Moreno Valle, is worth between US$50
million and US$75 million, including the liquidation of Canal
40's numerous debts. The rumored potential buyer of the stake is
Mexican businessman Isaac Saba.

Hampering the sale is Canal 40's 4-year-old feud with TV Azteca,
Mexico's second-largest broadcaster. The dispute dates back to
1999, when Canal 40 terminated a contract it signed with Azteca
the previous year, giving Azteca a buyout option as well as half
of Canal 40's pre-tax earnings. In exchange, Azteca would provide
51% of Canal 40's programming and would sell airtime.

However, Canal 40 claimed Azteca was not holding up its end of
the contract.


DESC: Fitch Cuts Ratings To B+, Watch Negative Continues
--------------------------------------------------------
Fitch Ratings has downgraded the senior unsecured foreign and
local currency ratings of Desc, S.A. de C.V. (Desc) to 'B+' from
'BB'. Fitch has also downgraded Desc's national scale ratings to
'BBB'(mex) from 'A'(mex). All ratings remain on Rating Watch
Negative.

The rating actions reflect continued pressures on revenues and
profitability and the erosion of operating fundamentals as a
result of the difficult economic and competitive environment
affecting Desc's main businesses. The new debt ratings also
incorporate the expectations that Desc will successfully complete
the refinancing of approximately US$700 million of bank loans
within the next several weeks. Proceeds from the new facilities
are expected to refinance current maturities of long-term debt.
Balance sheet cash and the new bank facilities will afford Desc
near-term liquidity, although financing costs may increase under
the restructuring. The new facilities are expected to grant
security interest to bank creditors and other lenders so that the
vast majority of Desc's debt would be secured. Under such
scenario, Fitch Ratings would potentially notch up the company's
senior secured debt to 'BB-'. Fitch Ratings views the closing of
the new financing arrangements as a positive and crucial step to
alleviate Desc's near-term liquidity needs, hence a successful
completion may result in the removal of the ratings from Rating
Watch Negative. Failure to complete the refinancing may result in
further pressures on credit quality.

Desc's automotive parts and chemical operations, which together
account for over 70% of revenues, remain burdened by low demand,
pricing pressures and lower cost absorption. These challenges
have hampered the company's progress on debt reduction and
continue to affect credit protection measures. During the first
half of 2003, consolidated sales grew by 5% driven by the sale of
two land properties at the real estate division for US$100
million. The automotive sector continues to post important
declines in revenue and EBITDA and its profitability has weakened
considerably due to weak demand, the closure in 2002 of the
DaimlerChrysler plant in Mexico City and delays in the
implementation of new projects. The chemical sector remains
burdened by high costs of raw materials and the down-cycle of the
global industry, which has intensified competitive pressures.
Total Debt-to-EBITDA reached 4.2 times (x) during the first six-
months of 2002 and the ratio of EBITDA-to-Interest Expense
deteriorated to 2.6x from 4.3x in 2002.

Liquidity has also weakened in recent months. At June 30, 2003
Desc had US$82 million in cash and marketable securities, a
substantial decline from US$232 million at December 31, 2002. At
June 30, 2003, total debt reached US$1.07 billion, of which
approximately US$284 million or 27% is due in the short-term.
During the first two quarters of 2003, the company did not comply
with a leverage covenant contained in a syndicated loan credit
agreement.

Desc continues to pursue opportunities for the divestiture of
non-core assets and concentration of the business portfolio in
profitable activities. The company recently announced the sale of
the adhesives and sealants businesses to the Henkel Group. In
2002, these businesses had revenues of approximately US$89
million. Desc intends to use proceeds from the sale primarily to
reduce debt.

Desc is one of Mexico's largest industrial conglomerates, with
operations in automotive parts, chemicals (such as
petrochemicals, phosphates, laminates, additives, particleboard,
adhesives, glues and sealants), food (production and sale of pork
and branded food products) and real estate (acquisition and
development of land for upper-income commercial, residential and
tourism).



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

AEROCONTINENTE: May Fight Chile in International Court
------------------------------------------------------
Peruvian airline Aerocontinente is planning to take its case
against Chile to the international tribunal after Chile denied
the airline rights to operate in the country, El Commercio
reports, citing Aerocontinente executive director, Carlos Morales
Andrade.

Andrade said that the airline's decision to seek satisfaction on
an international level is based on the perception that the
Chilean justice system cannot guarantee a fair hearing, having
already demonstrated favoritism towards the Chilean CDE (Consejo
de Defensa del Estado), which in 2001 made accusations against
Aerocontinente. The Peruvian airline has denied these
accusations.

Morales said he is satisfied by the support that the airline is
receiving from the Peruvian government, which is ready to help
the Company in its appeals to international agencies.

Aerocontinente has had a history of difficulties with Chilean
authorities regarding its operations in that country.

CONTACT:  AEROCONTINENTE AIRLINES
          Jr. Moyobamba 101
          Tarapoto, Peru
          Phone: (094) 524332
          Fax: (094) 523704
          Home Page: http://www.aerocontinente.com/
          Contact: Sr. Zad Desm,, Vice President


PAN AMERICAN: To Temporarily Cease Peruvian Mining Operations
-------------------------------------------------------------
Canada-based mining company Pan American Silver will cease
operations at the Peruvian mine Quiruvilca, where it produces
zinc, lead and silver, El Comercio reports, citing company
spokesman Teodorico Zambrano. The halt comes after three years of
losses, drying up of reserves and the lack of investment in
exploration, Zambrano reasoned.

However, Zambrano said operations will resume the moment
international prices improve. He noted that the price of zinc in
1999 was US$1,200 per m ton and that it is currently at US$800,
which is not sufficient to cover production costs.

Pan American has invested more than US$20 million in Quiruvilca
since it began operations there in 1995.



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

PDVSA: Considers Qatar Participation In Mariscal Sucre Project
--------------------------------------------------------------
Venezuela's state oil company Petroleos de Venezuela SA is
contemplating the sale of its stake in the Mariscal Sucre
offshore gas project to Qatar Petroleum, reports Business News
Americas. PdVSA's project leader Jesus Aboub said that Qatar is a
"convenient strategic partner" for its experience with liquefied
natural gas (LNG).

PdVSA may offer Qatar 9% out of its 60% stake in the Mariscal.
The Company's preliminary development agreement with its partners
gives 30% ownership to shell, 8% to Mitsubishi and the remaining
2% to other Venezuelan organizations. The feasibility study on
the project is due to be completed next month.

Currently, Mr. Luis Vierma, the country's energy minister is in
Qatar for negotiations. Qatar Petroleum is currently carrying out
a due diligence study on the project, which is expected to
produce 4.7 million tons annually.

PdVSA is also in talks with Japan's export development bank for a
US$2 billion loan to finance the project.


PDVSA: Hurt by Orimulsion Freeze
--------------------------------
Venezuela's decision to cease expansion of its orimulsion
business is not in the best interest of the country's state oil
enterprise, PdVSA, reports Business News Americas, citing a
statement from Gente de Petroleo, a group representing PdVSA
workers fired in the wake of the December-February national
strike.

According to the group, orimulsion is as profitable as the
synthetic crude projects, but latter requires 10 times more
capital investment. The group is seeking the congress' statement
on "arbitrary and unjustified" decisions taken by energy and
mines minister Rafael Ramirez and PDVSA president Ali Rodriguez
on the orimulsion issue, the report adds.

Arab nations, which are members of the OPEC, but not bound by the
output quota are benefiting from the situation. Less orimulsion
available for power generation opens the door to higher gas sales
by the Arab nations, the group 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.

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