TCRLA_Public/040304.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, March 4, 2004, Vol. 5, Issue 45

                            Headlines

A R G E N T I N A

AGUAS ARGENTINAS: Conflict With Government May End Soon
CARTA LOCAL: Declared Bankrupt By Court
FABRICANTES UNIDOS: Court Appoints Receiver
LOMA NEGRA: Corporate Bonds Get BB Rating From Moody's
MARILID S.R.L.: Court Declares Company "Quiebra"

PETROBRAS ENERGIA: January 2004 Oil & Gas Production Declines
VAGRA S.R.L.: Court Approves "Concurso Preventivo"

* Argentine Bondholders to Leave Consultative Groups


B O L I V I A

AMETEX: Fitch Cuts Bond Ratings to D After Missing Payment


B R A Z I L

COPEL: Seeks to Restructure Debt to Protect Future Cash Flows
COSIPA: Reveals Plan to Construct Logistics Center


C H I L E

AES GENER: Accepts Validly Tendered Offer Notes
AES GENER: Withdrawal Rights Expire


C O L O M B I A

VALORES BAVARIA: Cost-Cutting Results in Lower Net Loss in 2003


M E X I C O

CYDSA: Ends 2003 with Lower Net Loss, Higher Sales
EMPRESAS ICA: Issues Debt to Finance Hydro-Electrical Works
PEMEX: Labor Liabilities Imperil Finances
TFM: S&P Places Ratings on CreditWatch Negative


N I C A R A G U A

ENITEL: America Movil Seeks Full Control

V E N E Z U E L A

PDVSA: In Consortium Talks With Brazil's Petrobras

     -  -  -  -  -  -  -  -


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

AGUAS ARGENTINAS: Conflict With Government May End Soon
-------------------------------------------------------
Spain's Agbar, which holds a 25.04% stake in Argentine water
concessionaire Aguas Argentinas, is confident that the Argentine
utility will be able to resolve its conflict with the government
soon, reports Business News Americas.

"We have lived through a tense situation with authorities, but
now an acceptable negotiation has been entered into," said Agbar
official Jose Luis Jove.

Jove believes that an agreement could be reached in three weeks,
which could include the suspension of a complaint filed last
year with the International Center for Settlement of Investment
Disputes (ICSID) against Argentina.

The complaint was filed by French company Suez (SZE), which
holds 39.9% in Aguas, for a government-imposed freeze on utility
rates that has lasted two years.

Aguas, which won its 30-year operating concession in 1993, is
one of 61 companies whose contracts are under revision by the
federal government.

Aguas' other shareholders are PPP (10%), Banco de Galicia y
Buenos Aires (8.26%), Vivendi (7.55%), International Finance
Corporation (5%) and Anglian Water (4.25%).


CARTA LOCAL: Declared Bankrupt By Court
---------------------------------------
Buenos Aires Court No. 1 declared Carta Local Gualeguaychu
S.R.L. "Quiebra," according to Infobae. The court, assisted by
Clerk No. 1, assigned Mr. Ricardo Bataller as receiver. Mr.
Bataller, domiciled at Junin 684, Buenos Aires, will have until
April 15, 2004 to examine and authenticate creditors' claims.
The case will close with the liquidation of the Company's assets
to repay creditors.


FABRICANTES UNIDOS: Court Appoints Receiver
-------------------------------------------
Buenos Aires Court No. 17, with assistance from Clerk No. 14,
assigned Mr. Manuel Alberto Cibeira to act as receiver for
bankrupt local company Fabricantes Unidos S.A., reports Infobae.

The receiver will have until March 26 this year to verify
creditors' claims. Following authentication of the creditors'
claims, the receiver will then prepare the individual reports,
which are to be submitted to court on May 28, 2004, followed by
the general report on July 14 of the same year.

The bankruptcy process of the Company will close with the
liquidation of its assets to repay its creditors.

CONTACT:  Fabricantes Unidos S.A.
          Cucha Cucha 35
          Buenos Aires

          Mr. Manuel Alberto Cibeira, Receiver
          Av Cordoba 1247
          Buenos Aires


LOMA NEGRA: Corporate Bonds Get BB Rating From Moody's
------------------------------------------------------
Moody's Latin America Calificadora de Riesgo S.A. assigned a BB
rating on US$39.779 million of corporate bonds issued by Loma
Negra Cia. Industrial Argentina. The rating was based on the
Argentine cement company's finances as of Nov. 30, 2003.

The Comision Nacional de Valores, Argentina's securities
regulator, described the affected bonds as "Obligaciones
Negociables Serie 6". The bonds were classified under "Series
and/or Class", and will mature on September 30, 2013.


MARILID S.R.L.: Court Declares Company "Quiebra"
-----------------------------------------------
Buenos Aires Court No. 1 declared local company Marilid S.R.L.
"Quiebra," reports Infobae. The court, assisted by Clerk No. 2,
assigned Mr. Enrique Cavalieri, as receiver, who will examine
and authenticate creditors' claims until April 1 this year. The
deadlines for the submission of the individual and general
reports are yet to be disclosed. The Company's bankruptcy case
will close with the liquidation of the its assets to repay
creditors.

CONTACT:  Enrique Cavalieri, Receiver
          Roque Saenz Pena 730
          Buenos Aires


PETROBRAS ENERGIA: January 2004 Oil & Gas Production Declines
-------------------------------------------------------------
Argentine oil and gas company Petrobras Energia SA (PECO.BA)
reported oil and gas production of 163,300 equivalent daily oil
barrels for the first month of the year, says Dow Jones.

The figure is slightly below the oil and gas production in
December, which amounted to 165,200 equivalent oil barrels.

In January, oil output was 118,100 barrels, fewer than the
119,800 barrels produced in December. Argentina, Petrobras
Energia's largest oil producer, fell to 52,300 barrels from
54,700 barrels. Oil output in Venezuela, the Company's second
biggest oil producer, rose to 47,100 barrels from 45,500
barrels.

Petrobras Energia's gas production came in at 45,200 equivalent
daily barrels, a slight decrease from December's 45,400 barrels.
Gas output in Argentina slipped to 33,800 barrels from 34,200
barrels in December. Gas production in Bolivia, the second
largest producer for the company after Argentina, fell to 5,700
barrels from 6,100 barrels.

Petrobras Energia hasn't publicly announced any production
targets for the year, according to Dow Jones.

Petrobras Energia is the main asset of Petrobras Energia
Participaciones (PZE), which is in turn owned by Brazilian
energy giant Petroleo Brasileiro SA (PBR).


VAGRA S.R.L.: Court Approves "Concurso Preventivo"
------------------------------------------------
Buenos Aires Court No. 17 approved Vagra S.R.L.'s petition for
"Concurso Preventivo," signaling the start of the Company's
reorganization.

According to Infobae, the court, which is assisted by Clerk No.
33, assigned Mr. Gustavo Horacio Manay as receiver.

Creditors are required to present their claims to Mr. Horacio
Manay for verification before April 12 of this year.
Verifications are done to
ascertain the nature and amount of the Company's debts. Based on
the results of the verifications, the receiver will then prepare
the individual and general reports on the case. The deadlines
for the submission of these reports have not been disclosed.

The reorganization process will close with an informative
assembly slated for Nov. 19 this year.

CONTACT:  Vagra S.R.L.
          Yerbal 2429
          Buenos Aires

          Mr. Gustavo Horacio Manay, Receiver
          Montevideo 666
          Buenos Aires


* Argentine Bondholders to Leave Consultative Groups
----------------------------------------------------
Stepping up pressure on Argentina to enter formal debt
negotiations, private creditors told Nestor Kirchner's
administration that they will withdraw from consultative groups
set up to help restructure about US$100 billion of Argentine
defaulted debt, relates FT.

The Global Committee of Argentina Bondholders (GCAB), which
represents Argentina's main foreign creditors, accounts for over
90% of the bonds represented by consultative group members.

A press release issued Monday stated that GCAB's members "do not
consider the consultative groups the correct forum for a
meaningful negotiation of the debt restructuring".

"The whole goal was to avoid negotiations. The groups were an
invention of Argentina's legal counsel to place all the power of
the negotiations in the hands of the debtor," Adam Lerrick, a
member of GCAB's steering committee, told the FT on Monday.

"By withdrawing from the groups, GCAB members are saying that we
must move to the negotiation stage of the restructuring."

However, the Argentine government has so far refused to
recognize GCAB as a legitimate representative of Argentina's
creditors.

GCAB's decision to withdraw will not be lost on the
International Monetary Fund, which next week is due to pass
judgment on Argentina's performance.

Argentina must comply with the fund's policy of lending to a
country in arrears with its creditors only if that country is
deemed to be "pursuing appropriate policies and making a good
faith effort to reach collaborative agreement with its
creditors".



=============
B O L I V I A
=============

AMETEX: Fitch Cuts Bond Ratings to D After Missing Payment
----------------------------------------------------------
Fitch Ratings downgraded the bonds issued by Bolivia's largest
apparel exporter to the US, Ametex (America Textil), to D from
C, reports El Deber. The downgrade came after the Company missed
a Feb. 25, US$1-million payment for US$20 million of bonds
issued on September 2001. According to El Deber, Ametex has
piled up US$62 million in debts and is negotiating payments with
creditors.



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

COPEL: Seeks to Restructure Debt to Protect Future Cash Flows
-------------------------------------------------------------
Cia. Paranaense de Energia (Copel) is looking to slash debt to
37% of net worth, Business News Americas reports, citing news
agency Canal Energia.

Copel plans to hedge US$150 million in outstanding eurobonds
coming due in May 2005 to reduce foreign exchange variations
effects. The operation should reduce the foreign currency risk
on about 50% of company's total foreign debt, says the report.

Moreover, the Company will renegotiate terms of local currency
debentures with the owners of securities.

Copel, Brazil's second-largest power generator and distributor,
needs to restructure its debt in order to protect its 2004 and
2005 cash flows.

Parana state Governor Roberto Requiao recently ordered Copel to
sell all of its minority stakes in other companies: sanitary
services company Sanepar (6%); fixed-line phone operator
Sercomtel (45%); Internet services provider Onda (25%); wind
power plant Palmas (30%); thermal power plant Araucaria (20%);
and hidroelectric power plants Foz do Chopim (36%) and Campos
Novos (16.73%).

CONTACT:  Cia Paranaense de Energia
          Rua Colonel Dulcidio, 800
          Batel
          80420-170 Curitibia - PR
          Brazil
          Phone: +55 41 322-3535
          Fax  +55 41 224-4312
          Home Page: http://www.copel.br


COSIPA: Reveals Plan to Construct Logistics Center
--------------------------------------------------
Cosipa will build a logistics center in Santo Andre, an
industrial suburb of Sao Paulo city, the Brazilian flat
steelmaker said without revealing the cost of the investment,
relates Business News Americas.

"It will be a distribution and control center that will receive
everything that comes from the Santos port to be sent to the
rest of Brazil with computerized control," said Irineu
Bagnariolli, Sao Paulo city's urban development secretary.

Construction of the center and adjacent warehouses should be
completed by July of this year.

Cosipa, which produces some 4.5Mt/y of crude steel, is owned by
Usinas Siderurgicas de Minas Gerais S.A. (USIMINAS).



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

AES GENER: Accepts Validly Tendered Offer Notes
-----------------------------------------------
AES Gener S.A. (the "Company") announced Monday that at 12:01
a.m., New York City time, on February 28, 2004, it accepted for
payment the aggregate principal amount of its 6% Notes due 2006
(the "Yankee Notes") that were validly tendered (and not
withdrawn) as of the expiration date of its previously announced
cash tender offer for such notes. As of such time, the Company
had received valid tenders and related consents from holders of
approximately US$145.2 million in principal amount of Yankee
Notes, representing 72.62% in aggregate principal amount of
Yankee Notes outstanding as of such time.

As previously announced, in connection with its tender offer and
related consent solicitation for the Yankee Notes, the Company
has also obtained the requisite consents from holders of the
Yankee Notes to certain amendments to the indenture governing
the Yankee Notes (the "Yankee Note Indenture"). Accordingly, the
Company announced Monday that it expects to execute a
supplemental indenture giving effect to such amendments to the
Yankee Note Indenture in early March 2004.

The Company also announced Monday that, on February 27, 2004, it
reached an agreement to restructure the outstanding debt of its
Argentine subsidiaries, TermoAndes S.A. ("TermoAndes") and
InterAndes S.A. ("InterAndes"). Pursuant to the restructuring,
the holders of TermoAndes and InterAndes outstanding notes will
receive an upfront payment to be funded with cash currently held
in the TermoAndes and InterAndes' trust accounts, along with a
portion of the Company's cash on hand. In exchange for this
paydown, the holders of TermoAndes and InterAndes notes have
agreed to extend a loan to the Company to enable it to
repurchase the notes, which loan will have an expected maturity
in 2010. The Company expects to consummate the TermoAndes and
InterAndes restructuring in March 2004.

The Company has retained Deutsche Bank Securities, Inc. and its
affiliates to act as the exclusive Dealer Manager in connection
with the tender offer for the Yankee Notes and as Solicitation
Agent in connection with the related consent solicitation.
Questions concerning the terms of the offers for the Yankee
Notes (the "Tender Offer") and the consent solicitation for the
Yankee Notes (the "Consent Solicitation") may be directed to
Deutsche Bank Securities, attention: Jenny Lie, at (866) 627-
0391 (US toll-free) or (212) 250-7445 (collect). Deutsche Bank
Trust Company Americas is the Tender Agent in connection with
the Tender Offer and the Consent Solicitation.
The Company has engaged D.F. King & Co., Inc. to act as the
Information Agent in connection with the Tender Offer and the
Consent Solicitation.

CONTACT:  AES GENER S.A.
          Daniel Aninat, (562) 686-8938
          Vanessa Thiers, (562) 686-8948


AES GENER: Withdrawal Rights Expire
-----------------------------------
AES Gener S.A. (the "Company") announced Tuesday that withdrawal
rights with respect to its cash tender offer for any and all of
its 6% Senior Convertible Notes due 2005 (the "U.S. Convertible
Notes"), which were reinstated effective 9:00 a.m., New York
City time, on February 24, 2004 through and until 12:00
midnight, New York City time, on March 1, 2004, have expired.
Accordingly, tenders of U.S. Convertible Notes may no longer be
withdrawn and related consents may no longer be revoked pursuant
to the terms of the offer for such notes. The Company announced
that as a result of the reinstatement of withdrawal rights
US$30,000 principal amount of previously tendered U.S.
Convertible Notes was withdrawn and related consents revoked.

As of 12:00 midnight, New York City time, on March 1, 2004, and
after giving effect to the withdrawals described above, the
Company had received tenders and related consents from holders
of approximately US$55.1 million principal amount of U.S.
Convertible Notes, representing 74.63% aggregate principal
amount of U.S. Convertible Notes outstanding as of such time. As
previously announced, the Company's offer for any and all of the
U.S. Convertible Notes is scheduled to expire at 12:00 midnight,
New York City time, on April 1, 2004, unless further extended or
earlier terminated pursuant to the terms of such offer.

The Company has retained Deutsche Bank Securities, Inc. and its
affiliates to act as the exclusive Dealer Manager in connection
with the tender offer for the U.S. Convertible Notes and as
Solicitation Agent in connection with the related consent
solicitation. Questions concerning the terms of the offer for
the U.S. Convertible Notes (the "Tender Offer") and the consent
solicitation for the U.S. Convertible Notes (the "Consent
Solicitation") may be directed to Deutsche Bank Securities,
attention: Jenny Lie, at (866) 627-0391 (US toll-free) or (212)
250-7445 (collect). Deutsche Bank Trust Company Americas is the
Tender Agent in connection with the Tender Offer and the Consent
Solicitation.

The Company has engaged D.F. King & Co., Inc. to act as the
Information Agent in connection with the Tender Offer and the
Consent Solicitation.



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

VALORES BAVARIA: Cost-Cutting Results in Lower Net Loss in 2003
---------------------------------------------------------------
Colombian conglomerate Valores Bavaria (VBS.CN) saw a 70%
reduction in losses in 2003, reports Reuters.

The Company, controlled by Colombian magnate Julio Mario Santo
Domingo, reported net losses of COP143 billion ($1=COP2,682)
last year, narrowing from COP488 billion in losses in 2002.

"The 70% reduction in net loss...is a result of Valores
Bavaria's strategy to focus on its strategic investments,
results-oriented management of portfolio companies and strict
controls of costs and expenses," the Company said in a
statement.

At the end of the year, the firm reduced its financial debt to
COP527 billion from COP600 billion at the end of 2002.

Valores Bavaria had operating income of COP127 billion last year
from COP18 billion in 2002.

Valores Bavaria President Javier Aguirre repeated Friday that he
considered the conglomerate's stake in Avianca, which is 50%
owned by Colombia's Coffee Growers's Federation, a "non-
strategic" asset. Airline officials have said carriers including
Continental Airlines (CAL.N) and Grupo Taca might be interested
in buying the Colombian flagship airline.

Valores Bavaria has made provisions for Avianca, whose losses in
recent years have pushed Valores deeper into the red. However,
its results were not consolidated into the group's 2003 report
and will be announced at a shareholders meeting in late March.

Last year, Valores dissolved Aces, an airline in which it had a
50% stake, and sold a minority stake in Carrefour Colombia while
agreeing to sell its catering business.

Valores' total assets stood at COP1.78 trillion at the end of
2003, against COP1.75 trillion at the end of 2002.



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

CYDSA: Ends 2003 with Lower Net Loss, Higher Sales
--------------------------------------------------
Grupo Celulosa y Derivados SA, a Mexican chemical, textile and
packaging-materials maker, lowered its net loss in 2003 to
MXN749 million from a loss of MXN1.26 billion in the previous
year, reports Business News Americas.

In a filing with Mexico City's stock exchange, Cydsa, as the
Company is known, revealed Ebitda was up 122% to MXN338 million.

Cydsa said sales last year were 7.8% higher, at MXN6.39 billion,
than in 2002, as its chemicals and plastics division reported a
15% growth in sales with MXN3.72 billion.

"Sales in this sector [chemicals and plastics] were supported by
units sold in PVC resins [as well as] PVC tubing and
connections," Cydsa said in its report. PVC (polyvinyl chloride)
is a synthetic material used to make water-transport pipes.

CONTACT:  CYDSA, S.A. DE C.V., IN MEXICO
          Jesus Montemayor, Treasury Director
          +011-528-18-152-4585
          E-mail: jmontemayor@cydsa.com


EMPRESAS ICA: Issues Debt to Finance Hydro-Electrical Works
-----------------------------------------------------------
Mexican construction company ICA issued debts worth US$230
million in financial markets, reports El Economista. The debts
were sold at a 6.5% interest rate with expirations in 2008.

ICA issued the debt to assure the development of hydro-
electrical works linked to El Cajon dam. The operation will be
supported by the healthy profits that the Company brought in
during the last quarter of 2003, said analysts.

Located in Nayarit, El Cajon is part of the ambitious project
entitled "Hydrologic System of Santiago" to be carried out by
the state-owned Comision Federal de Electricidad (CFE). The
project has a potential of 4,300 megawatts.

During the October-December period, ICA reported sales of 2.9
billion pesos (US$264 million), a 14% increase compared to the
same 2002 period.

"The strong activity of the El Cajon project is the main reason
for the sharp growth. Works are progressing faster than
expected," added Gonzalo Fernandez, analyst of Santander
Investment.


PEMEX: Labor Liabilities Imperil Finances
-----------------------------------------
Petroleos Mexicanos' (Pemex) finances are now at risk due to the
Company's labor liabilities, El Economista suggests.

At the end of 2003, the firm's labor reserves reached MXN283.7
billion  (US$25.9 billion), a 33% increase from the previous
year's MXN213.3 billion.

Funds to finance labor liabilities are at MXN9.0 billion
(US$820.1 million), just enough to basically cover pension
costs, according to Juan Jose Suarez Coppel, corporate director
of finances.

He added that "the majority of petroleum companies on the world
level have [labor] liabilities under control", explaining that
Pemex's problem is that it lacks resources for both financing
investment programs and labor liabilities.


TFM: S&P Places Ratings on CreditWatch Negative
-----------------------------------------------
Standard & Poor's Ratings Services said Tuesday that it placed
its 'B' long-term corporate credit rating on TFM S.A. de C.V. on
CreditWatch with negative implications.

The CreditWatch listing reflects Standard & Poor's concerns
about TFM's inability to meet certain financial covenants under
its term loan facility and CP program. "Although the company is
currently negotiating with its lenders to obtain waivers,
Standard & Poor's is concerned about the potential impact of
this event on TFM's financial profile," said Standard & Poor's
credit analyst Juan P. Becerra.

The NAFTA economic deceleration environment continues to hurt
the performance of TFM's operations. The year-over-year drop in
the company's numbers reflects lower sales in the automotive
segment and higher raw materials costs, such as diesel fuel.

TFM's CreditWatch listing will be resolved upon the negotiation
of the waivers under its term loan facility and CP program.

ANALYST: Juan P Becerra, Mexico City (52) 55-5081-4416



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N I C A R A G U A
=================

ENITEL: America Movil Seeks Full Control
----------------------------------------
After acquiring a 49% stake in Nicaragua's fixed line incumbent
Enitel in January this year, Mexico's America Movil (NYSE: AMX)
is rumored to be planning to buy another 40% of Enitel.

Its success is unlikely, however, as Nicaragua's telecoms
regulator Telcor vows to prevent a full takeover of Enitel by
America Movil in order to preserve competition in the mobile
market, according to Telcor head Eduardo Urcuyo.

Urcuyo related that America Movil will not be allowed to merge
its Nicaraguan mobile operation Alo PCS with Enitel's mobile
division. Urcuyo could not say what actual steps Telcor will
take because its legal team is still evaluating the
possibilities.



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

PDVSA: In Consortium Talks With Brazil's Petrobras
--------------------------------------------------
Venezuelan state oil company PVDSA is now in talks with Brazil's
federal energy company Petrobras to form a consortium to bid for
exploration blocks in Venezuela, reports Business News Americas.

The negotiations are part of an agreement between Brazil and
Venezuela, made last year, to seek partnerships in exploration
and production, refining, petrochemicals and distribution.

The talks could include other companies, according to Petrobras
international affairs director Nestor Cervero in Tnpetroleo
magazine.

Petrobras' participation will exist through a non-controlling
stake in the consortium.



                            ***********


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
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