TCRLA_Public/040216.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

          Monday, February 16, 2004, Vol. 5, Issue 32

                          Headlines

A R G E N T I N A

AEROLINEAS ARGENTINAS: To Build Hotels To Increase Profits
AGUAS ARGENTINAS: Schedules Another Meeting With Argentine Govt.
APH NUEVA: Court Sets Bankruptcy Schedule
ARTES GRAFICAS YERBAL: Files "Concurso Preventivo" Petition
CHIETTI: Court Declares Company Bankrupt

COMPANIA ARGENTINA DE TINTAS: Credit Review Ends March 25
CONFITERIA PARODI: Receiver Verifies Claims in Bankruptcy
DIRECTV LA: Court Confirms Plan Of Reorganization
ELASTICOS CARMONA: Enters Bankruptcy on Court Orders
ELEMAR CARGAS: Court Approves "Concurso Preventivo" Petition

GRUPO EDITORIAL SHALOM: Credit Review Ends Today
HENDERSUR: Voluntarily Files for Reorganization
HIDROELECTRICA PIEDRA: Announces $300M Debt Restructuring Offer
KALEKIN: Court Considers "Concurso Preventivo" Motion
LAS RUEDAS: General Report Due at Court Today

METROGAS: Extends Debt Offer To March 9
MIS AMIGOS: Individual Reports Due at Court Today
PETROBRAS ENERGIA: Environmental Audit Conclusions
STOP CAR: Court Studies Reorganization Petition
TRISOMAGI: Seeks Court Permission to Undergo Reorganization

YUCAT: To Undergo Reorganization


B R A Z I L

AES SUL: Extends Due Date of $70M Worth of Debentures
BRASKEM: Reports Net Income of BRL215M in 2003
PARMALAT BRASIL: Judge Makes Unparalleled Move To Save Unit
VARIG: Controllers Reject Proposal From Pilots Association


D O M I N I C A N   R E P U B L I C

* Fitch Comments on the IMF's Review on the Dominican Republic


E C U A D O R

PETROECUADOR: Board Authorizes $1.7B Budget for 2004


J A M A I C A

KAISER ALUMINUM: Likely To Close Alpart Sale As Early As 1Q04



M E X I C O

ALESTRA: Reports Positive Financial Performance in 2003
INDUSTRIAS UNIDAS: Moody's Withdraws Ratings
ISSSTE: No Changes in the Near Term, Says Deputy Director

     -  -  -  -  -  -  -  -

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

AEROLINEAS ARGENTINAS: To Build Hotels To Increase Profits
----------------------------------------------------------
Aerolineas Argentinas SA, Argentina's largest airline, plans to
build hotels to improve profits using the proceeds from a planned
share sale later this year, Bloomberg News reports, citing the
airline's chief executive, Antonio Mata.

Mata said Aerolineas, owned by Spain's Viajes Marsans, will
attempt to replicate the business model in Marsans's home market,
where the Company owns an airline, ground transportation and
hotels.

Aerolineas Argentinas will sell the shares on the Buenos Aires
Stock Exchange and if successful will offer shares in Madrid and
New York later, Mata said.

The Company is expected to emerge from bankruptcy proceedings
this year after making a final US$100 million payment, Mata
added.


AGUAS ARGENTINAS: Schedules Another Meeting With Argentine Govt.
----------------------------------------------------------------
After Thursday's one-hour meeting between Argentine government
officials and executives of waterworks operator Aguas Argentinas
failed to see a solution to their conflict, both sides agreed to
meet again within 10 days, reports Dow Jones.

Earlier this month, government officials said that they expected
Aguas to give a formal answer on whether it will accept a list of
conditions that the Planning Ministry first presented in
December.

One of the key conditions the government has requested is that
Suez (SZE) - the French company that owns a majority stake in
Aguas, drop the complaint it has lodged against Argentina in the
World Bank's arbitration tribunal, ICSID, for a government-
imposed freeze on utility rates that has lasted two years. In
addition, the Company must commit to investments for
infrastructure projects and debt payments.

If Aguas Argentinas doesn't agree to the terms, negotiations on a
new contract can't begin and the government may rescind the
existing concession.

Suez said in a press statement Tuesday that it planned to
"present constructive proposals" and "propose a new cooperation"
at the Thursday meeting.

"The meeting lasted one hour, all the issues were analyzed and a
reunion was agreed upon within 10 days," a Planning Ministry
spokesman said Thursday. "The analysis of Aguas (Argentinas')
contract continues through the Unit of Renegotiation."

Present at Thursday's meeting were Planning Minister Julio De
Vido, representatives from the national water regulator, and the
special body in charge of renegotiating utility contracts.
Representing the concessionaire was Aguas Argentinas President
Yves Thibult de Silguy and Jacques Petry, president director
general of Suez Environnement.


APH NUEVA: Court Sets Bankruptcy Schedule
-----------------------------------------
Buenos Aires Court No. 24 set the schedule for the bankruptcy of
A.P.H. Nueva Pesquera Patagonica S.A., relates Infobae. The
individual reports are due at the court on June 7, followed by
the general report on August 3.

The Company's receiver, Antonio Florencio Canada, will prepare
the individual reports after the credit verification process are
closed on April 19.

Clerk No. 47 assists the court on the case, which will end with
the liquidation of the Company's assets to reimburse its
creditors.

CONTACT:  Anotnio Florencio Canada
          Luis Belaustegui 4531
          Buenos Aires


ARTES GRAFICAS YERBAL: Files "Concurso Preventivo" Petition
-----------------------------------------------------------
Artes Graficas Yerbal S.A., based in Buenos Aires, sought court
permission to undergo reorganization. Infobae relates the city's
Court No. 16 is studying the Company's petition for "Concurso
Preventivo". Clerk No. 31 assists the court on the case.

CONTACT:  Artes Graficas Yerbal S.A.
          La Facultad 1818
          Buenos Aires


CHIETTI: Court Declares Company Bankrupt
----------------------------------------
Buenos Aires Court No. 13 declared local company Chietti S.A.
"Quiebra", relates Argentine news source Infobae. The Company's
assets are likely to be liquidated at the end of the bankruptcy
proceedings.

Working with Clerk No. 26, the court assigned Mr. Alberto Enrique
Lopez as the Company's receiver. His duties include the
validation of creditors' claims until March 24, and the
preparation of the individual and general reports.

CONTACT:  Alberto Enrique Lopez
          Bernardo de Irigoyen 330
          Buenos Aires


COMPANIA ARGENTINA DE TINTAS: Credit Review Ends March 25
---------------------------------------------------------
Creditors of CompanĦa Argentina de tintas S.A. must present their
claims to the receiver for verification before March 25 this
year. Mr. Baldomero Gonzalez Herrera, the receiver, will validate
claims to determine the nature and amount of the Company's debts.

Argentine news portal Infobae reports that the Company entered
bankruptcy after Buenos Aires Court No. 18 declared it "Quiebra
Decretada." Clerk No. 36 assists the court on the case.

CONTACT:  Baldomero Gonzalez Herrera
          Ave de Mayo 1270
          Buenos Aires


CONFITERIA PARODI: Receiver Verifies Claims in Bankruptcy
---------------------------------------------------------
The credit verification process for the bankruptcy of Argentine
company Confiteria Parodi S.A. ends March 26. Creditors are
required to present their claims to the Company's receiver, local
accountant Orlando Vegega, for verification before then in order
to qualify for payments to be made after the Company's assets are
liquidated.

Buenos Aires Court No. 11, which handles the Company's case, will
file the individual reports on May 7, followed by the general
report on June 21. The receiver will prepare the general reports
after the individual reports are processed at court.

CONTACT:  Confiteria Parodi S.A.
          Alsina 492
          Buenos Aires

          Orlando Vegega
          Aguirre 666
          Buenos Aires


DIRECTV LA: Court Confirms Plan Of Reorganization
-------------------------------------------------
DIRECTV Latin America, LLC ("the Company") announced Friday that
the U.S. Bankruptcy Court in Wilmington, Delaware has confirmed
the Company's Plan of Reorganization, setting the stage for the
Company to emerge from Chapter 11. The Company expects that the
Plan of Reorganization will become effective by the end of
February 2004.

As previously announced, the Company filed for relief under
Chapter 11 of the U.S. Bankruptcy Code in March 2003 in order to
aggressively address its financial and operational challenges.
The filing applied only to the U.S. entity and did not include
any of the operating companies in Latin America and the
Caribbean, which have continued regular operations.

"This is an important development for the Company and our
employees, with the conclusion of the Chapter 11 process now
clearly in sight," said Larry N. Chapman, President and Chief
Operating Officer of DIRECTV Latin America, LLC. "Through the
Chapter 11 process, we have successfully accomplished what we set
out to do, namely taking the actions we believed were necessary
to strengthen our company and ensure our continued ability to
offer our customers outstanding programming and entertainment."

About DIRECTV Latin America

DIRECTV is a leading direct-to-home satellite television service
in Latin America and the Caribbean. Currently, the service
reaches approximately 1.5 million customers in the region, in a
total of 28 markets. DIRECTV is currently available in:
Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El
Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Puerto
Rico, Trinidad & Tobago, Uruguay, Venezuela and several Caribbean
island nations.

DIRECTV Latin America, LLC is a multinational company owned by
DIRECTV Latin America Holdings, a subsidiary of Hughes
Electronics Corporation, and Darlene Investments, LLC, an
affiliate of the Cisneros Group of Companies. DIRECTV Latin
America and its principal operating companies have offices in
Buenos Aires, Argentina; Sao Paulo, Brazil; Cali, Colombia;
Mexico City, Mexico; Carolina, Puerto Rico; Fort Lauderdale, USA;
and Caracas, Venezuela. For more information on DIRECTV Latin
America please visit www.directvla.com.

Hughes Electronics Corporation is a world-leading provider of
digital multichannel television entertainment, broadband
satellite networks and services, and global video and data
broadcasting.


ELASTICOS CARMONA: Enters Bankruptcy on Court Orders
----------------------------------------------------
Elasticos Carmona S.A. entered bankruptcy on orders from Buenos
Aires Court No. 11. The Company's creditors must present their
claims to the receiver, Mr. Jorge Luis Blazquez, for
verifications before April 2.

The court, which is assisted by Clerk No. 22 on the case,
requires the receiver to file the individual reports, which
contain the results of the verification process, on May 14.

The general report is due for submission on June 28. The receiver
will prepare this report after the individual reports are
processed at court.

CONTACT:  Jorge Luis Blazquez
          Oro 2381
          Buenos Aires


ELEMAR CARGAS: Court Approves "Concurso Preventivo" Petition
------------------------------------------------------------
Buenos Aires Court No. 14 approved a motion for "Concurso
Preventivo" filed by local company Elemar Cargas S.A. recently. A
report by Argentine news portal Infobae indicates that Clerk No.
28 works with the court on the case.

The Company's receiver, Ms. Silvia Beatriz Cusel, will
authenticate creditors' claims until April 7. Verifications are
done to determine the nature and amount of the Company's debts.
The receiver will file the individual reports, which will contain
the verification results, on May 4.

The general report, which the receiver must prepare after the
individual reports are processed, is due at the court on June 23.
The informative assembly will be held on November 26.

CONTACT:  Silvia Beatriz Cusel
          Manuel Trelles 2350
          Buenos Aires


GRUPO EDITORIAL SHALOM: Credit Review Ends Today
------------------------------------------------
The credit verification process for the bankruptcy of Grupo
Editorial Shalom S.R.L. ends today. The Company's receiver, Ms.
Alicia Kurlat, will prepare the individual reports on the
verification results.

According to earlier reports by the Troubled Company Reporter -
Latin America, the Company entered bankruptcy after Buenos Aires
Court No. 18 approved a bankruptcy petition filed by Banco Comafi
S.A., to whom the Company failed to meet its financial
obligations. Clerk No. 36, Dr. Vivono assists the court on the
case.

CONTACT:  Grupo Editorial Shalom S.R.L.
          Almirante Solier 1139
          Buenos Aires

          Alicia Kurlat
          10th Floor, Room A
          Carlos Pellegrini 1079
          Buenos Aires


HENDERSUR: Voluntarily Files for Reorganization
-----------------------------------------------
Hendersur S.A., which is based in Buenos Aires, voluntarily filed
a motion for "Concurso Preventivo" at the city's Court No. 19,
according to a report by local news source Infobae. Clerk No. 38
works with the court on the case.


HIDROELECTRICA PIEDRA: Announces $300M Debt Restructuring Offer
---------------------------------------------------------------
Argentine hydropower generator Hidroelectrica Piedra del Aguila
SA, a unit of French group Total, announced an offer to
restructure around US$300 million in debt.

The Company proposes three alternatives for its bondholders:
cash, new notes with a fixed rate and maturity in 2013 (instead
of 2009) or new notes with contingent rate and the same maturity
term.

The cash option contemplates a maximum amount of US$36 million to
buy back notes at 30% to 40% of face value. The price will be set
through a modified Dutch auction process.

The offer is supposed to expire March 29. The holders of existing
notes that decide to take part in the offer will have to send a
power of attorney to the exchange agent, so as to subscribe an
out-of-court agreement, or APE.

Today, Piedra del Aguila cannot subscribe an APE without loosing
its 30-year concession. However, if the offers turn out to be
unsatisfactory and the government issues a decree allowing the
Company to subscribe an APE without loosing the concession, it
will carry out the restructuring through an APE and not based on
the offers received.

Piedra del Aguila is in default since June 2002. One of the
issues that led the Company to expedite a debt restructuring
offer is that it has been notified of seven involuntary
bankruptcy filings.

Piedra del Aguila's share ownership is composed of Hidroneuquen
(59%), Argentine government (26%), government of the Neuquen
province (13%) and employees (2%). Hidroneuquen is controlled by
Total with a 70% stake.


KALEKIN: Court Considers "Concurso Preventivo" Motion
-----------------------------------------------------
Argentine company Kalekin S.R.L. has requested permission to
undergo reorganization. Local news portal Infobae indicates that
the Company has submitted its petition for "Concurso Preventivo"
at Buenos Aires Court No. 22. Clerk No. 44 aids the court on the
case.

CONTACT:  Kalekin S.R.L.
          Ave Chorroarin 137
          Buenos Aires


LAS RUEDAS: General Report Due at Court Today
---------------------------------------------
The general report for the bankruptcy of Buenos Aires Company is
due at the court today. The Company's receiver, Mr. Jose Luis
Rodas, prepared the report after the individual reports are
processed at court.

Buenos Aires Court No. 11 handles the Company's case, the
Troubled Company Reporter - Latin America said earlier in a
report. Clerk No. 22 assists the court on the case.

CONTACT:  Jose Luis Rodas
          L N Alem 619
          Buenos Aires


METROGAS: Extends Debt Offer To March 9
---------------------------------------
Argentine natural gas distributor Metrogas SA extended to March 9
its offer to restructure US$440 million in debt. Metrogas
launched its offer on November 7 and has extended the deadline on
several occasions, since it has been unable to reach the
necessary backing to subscribe an out-of-court agreement.

As of February 10, creditors holding about US$107.7 million of
eligible obligations had agreed to the proposal. This represents
25% of creditors. The Company's out-of-court settlement, known by
its Spanish acronym as an APE, needs two-thirds approval from
creditors before it can submit its offer for legal approval.

Metrogas, which stopped payments on all its debt in March 2002,
is offering to buy back its debt at 50% of face value up to
US$100 million. Creditors can also choose an option where
capitalized interest is added to the principal and paid over a
period of nine years. Under this option, the modified debt will
pay 3% interest for the first two years, 4% for the following two
years, 5% for the next two years and 6% for the remaining period.


MIS AMIGOS: Individual Reports Due at Court Today
-------------------------------------------------
Ms. Maria Cenatiempo, receiver for Mis Amigos S.R.L., must file
the individual reports for the Company's bankruptcy today. The
reports were prepared after the credit verification process was
concluded late last year.

After the individual reports are processed at court, the receiver
will prepare the general report, which is to be submitted on
March 29. The Company's assets will be liquidated at the end of
the bankruptcy process to reimburse its creditors.

Buenos Aires Court No. 3 and Clerk No. 5 handle the Company's
case, said the Troubled Company Reporter - Latin America in an
earlier report.

CONTACT:  Maria Cenatiempo
          Ave de Mayo 1365
          Buenos Aires


PETROBRAS ENERGIA: Environmental Audit Conclusions
--------------------------------------------------
Petrobras Energia Participaciones S.A. (Buenos Aires: PBE,
NYSE:PZE), controlling company with a 98.21% stake in Petrobras
Energia S.A. (Buenos Aires: PESA), announces that Petrobras
Energia S.A., issued the following press release on Feb. 9, 2004:

Quality, Environmental, Safety and Health management is an
integral part of Petrobras Energia S.A.'s business and through
its operating performance the Company commits itself to improve
results of operations and generate value for its shareholders.

In this context, Petrobras Energia retained an international
consulting company to carry out an environmental audit of
operations in the light of the applicable laws, future
requirements and the pertinent international standards in the
absence of local applicable guidelines.

The final audit report ratified the high environmental standards
under which the operations are performed and determined the
actions required to enforce the principles of the Safety,
Environmental and Occupational Health Policy through which
Petrobras Energia commits itself to preserve the environment
where it operates, the safety and health of is personnel,
contractors and neighboring communities.

In view of this responsibility and a result of the environmental
study, over the next years Petrobras Energia will make
investments in the amount of approximately US$23 million
involving improvements in prevention systems and production
facilities. In addition, several corrective and remediation
actions will be implemented.  For such reason, a P$15 million
loss was recorded in fiscal year ended December 31, 2003.

In this way the Petrobras Energia ratifies its commitment to
securing economic development in line with the environment and
the people's quality of life.


STOP CAR: Court Studies Reorganization Petition
-----------------------------------------------
Buenos Aires Court No. 7 received a motion for "Concurso
Preventivo" from local company Stop Car S.A. reports Argentine
news portal Infobae. The Company is seeking court permission to
reorganize. The source, however, did not mention whether the
court, which works with Clerk No. 13 on the case, is likely to
approve the petition or not.

CONTACT:  Stop Car S.A.
          Belgrano 552
          Buenos Aires


TRISOMAGI: Seeks Court Permission to Undergo Reorganization
-----------------------------------------------------------
Argentine company Trisomagi S.A. is seeking court approval for
its "Concurso Preventivo" petition. Buenos Aires Court No. 14 and
Clerk No. 27 handle the Company's case, relates Infobae.

CONTACT:  Trisomagi S.A.
          Presidente Peron 1333
          Buenos Aires


YUCAT: To Undergo Reorganization
--------------------------------
Yucat S.R.L., based in Villa Maria Cordoba, will undergo
reorganization. Argentine news portal Infobae relates that the
province's Court No. 3 approved the Company's motion for
"Concurso Preventivo" recently. The source, however, did not
indicate whether the court has approved a receiver to the case.



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

AES SUL: Extends Due Date of $70M Worth of Debentures
-----------------------------------------------------
AES Sul, a Brazilian power distributor controlled by AES Corp.,
extended the maturity date of debentures worth BRL206 million
(US$70 million), reports local newspaper Gazeta Mercantil.

The securities were due in 2004 but the Company extended the due
date to between 2005 and 2008.

At the same time, AES Sul also obtained a 2.5 percentage point
reduction in the interest rate on the debt in negotiations with
debenture holders.

The Company still has to restructure a further BRL1.2 billion of
debt.

The negotiations are part of the ongoing debt restructuring that
its US parent is carrying out at all its Brazilian subsidiaries.

In December 2003, AES signed a US$1.2-billion debt-for-equity
agreement with national development bank BNDES. As part of the
deal, AES transferred its shares in three other companies -
distributor Eletropaulo and generators AES Tiete and Urguaiana -
to holding company Brasiliana, in which AES has a controlling
50.01% voting stake, with BNDES holding the remaining shares.

Local press have suggested that AES Sul needs to put its finances
in order to be included in Brasiliana and qualify for a bailout
loan being offered to power companies by BNDES.

AES Sul supplies power to over 990,400 clients in 116 cities in
Rio Grande do Sul state. It was spun off from state power company
CEEE in a partial privatization in 1997.


BRASKEM: Reports Net Income of BRL215M in 2003
----------------------------------------------
BRASKEM S.A. (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK), leader
in thermoplastic resins segment in Latin America and among the
five largest Brazilian privately-owned industrial companies,
announced Thursday its earnings for the 2003 fiscal year. The
company was one of the highlights of the capital markets. On the
Sao Paulo Stock Exchange (Bovespa), its shares rose in value 508%
while on the New York Stock Exchange (NYSE) the Company's ADRs
rose 609%.

Braskem's EBITDA was R$ 1.8 billion, with Net Income of R$ 215
million in 2003

*  In 2003, Braskem recorded gross sales of R$11.28 billion,
surpassing the previous year's results (R$ 8.86 billion) by 27%.
These revenues mainly were propelled by overseas sales, which at
year's end totaled US$ 617 million (49% higher than 2002) thus
confirming Braskem as one of the largest exporters in Brazil.

*  Gross income increased 48.6% and ended the year at R$ 1.85
billion, substantially higher than the R$ 1.24 billion registered
of the previous year. Net income demonstrated even more important
progress: it totaled R$ 215 million during the period, reversing
the R$ 794 million loss posted in 2002.

*  The EBITDA accumulated over the year was R$ 1.8 billion. With
this result, 33% higher than obtained in 2002, Braskem has made
it a priority to reduce its indebtedness and to extend its debt
profile.

*  Bond issues on the domestic and international capital markets,
totaling US$ 1.2 billion, also made it possible to restructure
the debt profile and increase its liquidity.

*  During the year, Braskem had accumulated capital expenditures
of R$ 176 million. These funds, among other purposes, were
earmarked for modernization and expansion of operating capacity
and for the launch of a new resin on the Latin American market.

Click here to access the information contained in the 4Q03
Release:
http://www.braskem.com.br/upload/Braskem_Release_4Q03_english.PDF


PARMALAT BRASIL: Judge Makes Unparalleled Move To Save Unit
-----------------------------------------------------------
Sao Paulo Judge Carlos Henrique Abrao ousted the board and
management of the Brazilian subsidiary of bankrupt Italian dairy
giant Parmalat in an unprecedented move to save the ailing unit,
reports Bloomberg News.

Judge Abrao, of Sao Paulo's 42nd Civil Court, appointed three
administrators to manage Parmalat Brasil SA Industria de
Alimentos, replacing president Ricardo Goncalves, in an order
Wednesday.

The new administrators are former employees of the Central Bank,
Parmalat Brasil spokesman Waldecir Veldelho said. They are Jorge
Lobo, Ruben Salles de Carvalho and Keyler Carvalho Rocha.

Abrao, who appointed overseers for the Company last month, said
Parmalat Brasil had been hurt by engaging in "artificial"
financial transactions ordered by the parent in Italy. Abrao, in
a 57-page decision, also said the Company is carrying assets on
its books at fictitious values, boosting its purported resources.

"If we don't do anything at this time, we will see the collapse
of Parmalat Alimentos," Abrao wrote in his order.

Parmalat Brasil and its controlling company, Parmalat
Administracao e Participacoes do Brasil Ltda., await a decision
on their petitions for bankruptcy protection filed last month.
The Company has been unable to get new credit to pay suppliers or
make payments to banks, and is operating at 40% capacity.
Parmalat's Brazilian units, which include the operating company
and several holding companies, have more than $2.3 billion in
debt.

"It is the first time ever a judge has appointed a new management
before bankruptcy," said Ricardo Tosto, lawyer at Leite, Totso
and Barros Associados, a law firm in Sao Paulo. "The decision has
no legal standing." Tosto said congress is considering a new
bankruptcy law, which Abrao followed in his ruling. "The judge is
trying to save jobs," he said.


VARIG: Controllers Reject Proposal From Pilots Association
----------------------------------------------------------
The Ruben Berta Foundation, controlling shareholder of Brazil's
second-biggest airline Viacao Aerea Rio Grandense SA (Varig),
shunned a proposal offered by a pilots association, says Dow
Jones.

Last Monday, NV Participacoes, which was created by the
Association of Varig Pilots and has the backing of three foreign
investors, told the Ruben Berta Foundation that it's prepared to
invest US$500 million into Varig in return for a 50% stake.

However, the Ruben Berta Foundation rejected the offer on
Wednesday, saying the airline is starting to recover. The Ruben
Berta Foundation deemed the proposal an "interference" and said
that it "came from people or entities that have no understanding
of the real situation of the company."

Rodrigo Marocco, the president of the Association of Varig
Pilots, said however, that it is yet to receive a letter of
rejection from the foundation.

"If the foundation turns down the offer, we will turn to the
government," he said, but he didn't elaborate.

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

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



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

* Fitch Comments on the IMF's Review on the Dominican Republic
--------------------------------------------------------------
Fitch Ratings, the international rating agency, commented
Thursday on the completion of the International Monetary Fund's
first review of the Dominican Republic's Stand-By Arrangement.

The completion of the first review results in the release of an
additional US$66 million under the program, bringing total
disbursements to about US$197 million to date. However, the
government had to request the approval of waivers with respect to
various structural and performance criteria it was not able to
meet by year-end 2003.

While Fitch welcomes this development as a positive step, we
remain concerned about the implementation risk of the Stand-by
program with the IMF due to pre-electoral politics. This, in turn
could lead to more multilateral disbursement delays. With US$504
million in public sector medium and long-term debt amortizations
due this year (versus an estimated US$260 million in reserves),
the Dominican Republic can ill afford to lose multilateral
financing.

The government projects external financing needs of close to US$1
billion in 2004. Although multilateral and bilateral creditors
are expected to disburse close to US$700 million, this still
leaves a financing gap of US$300 million. The government will be
approaching the Paris Club to seek a rescheduling to close this
gap. Bilateral debt service includes US$341 million and US$89
million in principal and interest payments, respectively during
2004.

Whether the expected Paris Club rescheduling leads to the
enforcement of the 'comparability of treatment' clause, and thus
the rescheduling of bond debt as well, will likely depend upon
the extent to which both principal and interest repayments are
included. As a rescheduling of just principal payments could
sufficiently close the Dominican Republic's funding gap and
perhaps circumvent the 'comparability of treatment' clause, Fitch
believes that this could limit the potential for a bond
restructuring through this mechanism at this time. However, given
recent comments by leading presidential candidate Leonel
Fernandez with respect to seeking debt relief from private
creditors, some type of restructuring in the future cannot be
completely ruled out. Fitch would view any future restructuring
that imposes a material loss in NPV terms to bondholders a
default event.

Nevertheless, there are serious risks with respect to continued
timely debt service. Since Fitch's last rating action, the
government has cured the US$27 million coupon payment on the 2013
bond within the grace period.

Fitch will continue to monitor the Dominican Republic's progress
under the Stand-by Arrangement with the IMF. Any additional
disbursement delays could make meeting debt service requirements
difficult. Continued pressures on the sovereign's slim
international reserve position, as well as new developments in
the electricity and/or financial sectors that could result in
additional public finance pressures would also be negative for
the ratings.

Conversely, successful reviews of the country's Stand-by
Arrangement with the IMF and a smooth transition to the next
government could ease pressures on the ratings going forward.
Until there is more clarification on the extent of Paris Club
rescheduling and the enforcement of the 'comparability of
treatment' clause, the ratings will remain on Rating Watch
Negative.

CONTACT:  Fitch Ratings
          New York

          Theresa Paiz Fredel
          Phone: 212-908-0534

          Roger M. Scher
          Phone: 212-908-0240

          James Jockle, Media Relations
          Phone: 212-908-0547



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

PETROECUADOR: Board Authorizes $1.7B Budget for 2004
----------------------------------------------------
Ecuador's state oil company Petroecuador received approval from
its board for its 2004 operating budget of US$1.72 billion,
Business News Americas reports, citing a Petroecuador source.

Though US$46.3 million less than expected, the budget is still
enough to keep the Company's operations afloat, according to the
source.

Petroecuador will save the US$46.3 million by reprogramming fuel
imports, the source said. The country's thermoelectric plants
will use alternative fuels instead of the more expensive diesel.

The investment budget was also cut by US$4.4 million to US$267
million but new contracts with private companies are expected to
bring more investment into Ecuador this year, the source said.

Petroecuador finished 2003 with US$1.8 billion of profits, which
it expects to maintain this year, the source said.



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

KAISER ALUMINUM: Likely To Close Alpart Sale As Early As 1Q04
-------------------------------------------------------------
Kaiser Aluminum & Chemical Corp. (OTC BB: KLUCQ) expects to close
the sale of its 65% share in Jamaica's Alpart aluminum refinery
to Switzerland's Glencore by the end of the first quarter or
early second quarter of 2004, Business News Americas reports,
citing company spokesperson Scott Lamb.

Kaiser announced the deal, estimated to be worth some US$170
million, in January as part of its efforts to emerge from Chapter
11 bankruptcy protection.

The Company wants to have its books in order by mid-2004,
according to the report.

Kaiser Aluminum & Chemical Corporation is a leading producer of
fabricated aluminum products, alumina and primary aluminum. It is
the operating subsidiary of Kaiser Aluminum Corporation
(OTCBB:KLUCQ).

CONTACT:  Kaiser Aluminum Corporation
          5847 San Filipe, Ste, 2500
          Houston, TX 77057-3268
          Phone: 713-267-3777
          Fax: 713-267-3701
          Home page: http://www.kaiseral.com
          Contact:  Scott Lamb
                    Phone: 713-332-4751

                    George T. Haymaker Jr., Chairman
                    Jack A. Hockema, President & CEO
                    John T. La Duc, EVP & CFO



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

ALESTRA: Reports Positive Financial Performance in 2003
-------------------------------------------------------
Following a tough year of trying to restructure its debts,
Mexican telephone company Alestra still managed to produce a
positive performance in operations last year.

El Universal reports that the Company, which belongs to AT&T,
Alfa and BBVA Bancomer, registered a 12% increase in income in
2003, to US$502 million. This was mainly due to the 9% growth in
traffic volume, which climbed from 3.26 billion minutes in 2002
to 3.56 billion minutes last year.

The Company continued with its strict austerity plan in 2003,
managing to reduce its operating expenses by 23% to US$134
million. The combination of greater income and lower spending
meant that the firm generated a flow of US$108 million, which was
35% higher than the US$80 million seen in 2002.

Alestra registered sales of US$118 million last year, 28% more
year-on-year, due to its strategy of focusing on high-consumption
clients and the segments of information, Internet and local
telephone services.

At the same time, Reuters reports that Alestra plans to invest
over US$40 million this year to grow its network as it focuses on
big corporate clients.

"We are making important investments in our virtual networks of
over $40 million (in 2004)," Ricardo Hinojosa, a commercial
director at Alestra, told reporters.

Alestra competes in the long-distance market in Mexico with
market leader Telefonos de Mexico (Telmex) and with
Avantel, a venture of WorldCom, now named MCI
.


INDUSTRIAS UNIDAS: Moody's Withdraws Ratings
--------------------------------------------
Following the official cancellation by Industrias Unidas, S.A. de
C.V. (IUSA) on its proposed note offering of US$175 million
guaranteed senior unsecured notes due 2014, Moody's Investors
Service withdrew all the Company's ratings.

Moody's withdrew its ratings on the following issues:

- Senior implied rated B3
- Senior unsecured issuer rating rated Caa2
- $175 million guaranteed senior unsecured notes due 2014 rated
Caa1

IUSA is one of Mexico's largest diversified industrial companies,
offering a large variety of products through integrated
manufacturing and distribution operations located principally in
Mexico and the U.S. The company's operations are conducted by
seven principal business groups: copper tubing, wire and cable,
copper alloys, electrical products, watt-hour meters, valves and
controls, and diversified assets group.


ISSSTE: No Changes in the Near Term, Says Deputy Director
---------------------------------------------------------
Enrique Moreno Cueto, deputy general director of Economic,
Social, and Cultural Benefits of the Social Security and Services
Institute for State Workers (ISSSTE), ruled out the possibility
of making short-term changes to the ISSSTE, reports El
Economista.

The complexity of the entity's financial crisis necessitates a
long-term discussion over a reform that would be applied to the
ISSSTE, Moreno suggested.

The official estimated that the deficit of the ISSSTE's pension
system will pass from MXN20 billion (US$1.8 billion) in 2003 to
MXN25 billion (US$2.2 billion) in 2004. For this reason, Moreno
insisted that a solution to the problem be found, as the velocity
with which the deficit grows represents a "monumental risk" to
public finances.

Moreno explained that the growing deficit is due to the number of
Mexican workers retiring each year, resulting in the amount of
annually-paid pensions to jump drastically year on year.




               ***********


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., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and Oona
G. Oyangoren, Editors.

Copyright 2004.  All rights reserved.  ISSN 1529-2746.

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

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

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


* * * End of Transmission * * *