TCRLA_Public/040310.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

            Wednesday, March 10, 2004, Vol. 5, Issue 49



ACINDAR: Argentine Judge Commences Debt Review
ACINDAR: Reports Positive Results in 2003
ARENALES CONSTRUCCIONES: Court Declares Company "Quiebra"
BELLSOUTH CORP.: Agrees to Sell Its LatAm Ops to Telefonica
BELLSOUTH CORP.: Fitch Comments on Sale of its LatAm Assets

BELLSOUTH CORP.: S&P May Still Cut Ratings
DISCO: New Owner To Receive Company Debt-Free
FRANCIONI: Judge Approves "Concurso Preventivo" Motion
HANDYPLAST: Declared Bankrupt by Court
NII HOLDINGS: Closes Tender Offer

SIDERAR: Evaluating Maintenance Plans for No. 1 Blast Furnace

* Argentina Struggles To Circumvent New Debt Default


ANNUITY & LIFE: Reports Full Year 2003 Net Loss of $132M
BERMUDA FIRE: Liquidators Seek to Revise Scheme Of Arrangements
SEA CONTAINERS: Reports $111.4M Full Year 2003 Net Earnings


CFLCL: Responds to Notice Issued by Shareholders
EMBRATEL: MCI Execs Meet With Fixed-Line Telephone Firms' Reps
USIMINAS: Ratings Unaffected by 2003 Results, Says S&P


AVIANCA: Judge Delays Hearing Over Request for Extension
AVIANCA: Union to Carry On Go-Slow Operation


DESC: Announces Resolutions Adopted at its Shareholders Meetings
GRUPO MEXICO: Fitch Removes Rating from Watch Negative
HYLSAMEX: Forecasts 1Q04 Ebitda of Up to $80M


PDVSA: VP Leaves Post, Yet to Name Replacement
TELCEL BELLSOUTH: No Regulatory Issues to Block Telefonica Deal
     -  -  -  -  -  -  -  -


ACINDAR: Argentine Judge Commences Debt Review
Argentine steelmaker Acindar Industria Argentina de Aceros
(ACIN.BA) informed that a local judge commenced on Feb. 26 a
review process to approve the Company's restructuring of about
US$230 million in debt, relates Dow Jones.

When the deal gets legal approval, its terms can be imposed on
holdout creditors as well.

Acindar defaulted in November 2001 and gained creditor agreement
for its new repayment terms in December 2003. The Company's debt
restructuring involves repaying its debts over the next nine
years. There is no nominal "haircut" on the debt, and the
Company will pay 4% interest during 2004.

After 2004, Acindar will pay a progressively higher interest
rate tied to Libor that will reach Libor plus 3 percentage
points by 2007.

Buenos Aires-based Acindar, Argentina's largest long steelmaker
with installed capacity of nearly 1.35Mt/y, is owned by the
Acevedo family (20%), Brazilian long steelmaker Belgo-Mineira
(20%), the World Bank's IFC (7%) and the rest is floated on the
stock market.

          2739 Estanislao Zeballos Beccar
          Buenos Aires
          Argentina B1643AGY
          Phone: +54 11 4719 8500
          Fax: +54 11 4719 8501
          Home Page:

          Jose I. Giraudo, Investor Relations Manager
          Tel: (54 11) 4719 8674
          Andrea Dala, Investor Relations Officer
          Tel: (54 11) 4719 8672

ACINDAR: Reports Positive Results in 2003
Acindar managed to return to black in 2003 with a net income of
ARS599.9 million ($1=ARS2.935) from a net loss of ARS250.4
million in 2002.

The Company, which exports much of its production, has benefited
from the January 2002 peso devaluation, which made its goods
relatively more competitive on international markets, and
Argentina's overall economic recovery in 2003.

Net sales totaled ARS1.347 billion in 2003, up from ARS1.068
billion in 2002. Operating profit jumped to ARS463 million in
2003 from ARS236.4 million a year earlier.

One of the more notable boosts to Acindar's 2003 results was in
financing and holding results, where the Company reported a
ARS102.4 million gain, compared with a ARS534.7 million loss in
2002. The Company said the 2003 result included income of
ARS128.6 million from foreign exchange movements and ARS64.3
million from its ongoing debt restructuring.

Acindar saw its total shipments rise to 1.2 million tons from
998,871 tons in 2002. This improvement was carried by the
domestic market, where shipments jumped to 855,884 tons from
610,215 tons. Exports fell to 303,470 tons in 2003 from 388,656
tons one year before.

In peso terms, internal sales brought in ARS1.07 billion for
2003, compared with ARS663.2 million in the previous year.
Exports totaled ARS304.1 million, down from ARS426.3 million in

ARENALES CONSTRUCCIONES: Court Declares Company "Quiebra"
Buenos Aires Court No. 15 declared local company Arenales
Construcciones S.R.L. "Quiebra," reports Infobae. The court,
assisted by Clerk No. 30, assigned Mr. Hector Jorge Garcia as
receiver, who will examine and authenticate creditors' claims
until May 5, 2004. The deadlines for the submission of the
individual and general reports are yet to be set. The Company's
bankruptcy case will close with the liquidation of its assets to
repay creditors.

CONTACT:  Hector Jorge Garcia, Receiver
          Montevideo 734
          Buenos Aires

BELLSOUTH CORP.: Agrees to Sell Its LatAm Ops to Telefonica
BellSouth Corp. (NYSE: BLS) has signed a definitive agreement
with Telefonica Moviles, the wireless affiliate of Telefonica,
S.A. (NYSE: TEM) to sell its interests in its 10 Latin American
operations. The purchase price is based on a total enterprise
value of the 10 Latin American companies of $5.85 billion.
BellSouth will receive after tax cash proceeds of approximately
$4.2 billion and reduce consolidated debt by $1.5 billion.

BellSouth and its partners operate 10 wireless companies in
Latin America (Argentina, Chile, Colombia, Ecuador, Guatemala,
Nicaragua, Panama, Peru, Uruguay and Venezuela). Telefonica has
operations in seven Latin American countries (Brazil, Mexico,
Argentina, Peru, Chile, El Salvador and Guatemala). With the
acquisition, Telefonica will add six additional countries to its
footprint and 10.5 million new customers.

According to Duane Ackerman, Chairman and CEO of BellSouth, "the
sale of our Latin American operations enables us to continue to
strengthen our domestic businesses. This transaction improves
our flexibility as we focus on our growth opportunities."

The transaction is subject to due diligence, governmental
approvals and other closing conditions. It is expected to close
in stages as closing conditions are satisfied, with the final
closing expected to occur in the second half of 2004. BellSouth
expects to record a gain on the transaction based on the book
value at closing. Based on current book value, the after-tax
gain would be approximately $1.9 billion.

About BellSouth Corporation

BellSouth Corporation is a Fortune 100 communications services
company headquartered in Atlanta, Georgia. BellSouth serves
nearly 50 million local, long distance, Internet and wireless
customers in the United States and 12 other countries.

Consistently recognized for customer satisfaction, BellSouth
provides complete communications solutions to the residential
and business markets. In the residential market, BellSouth
offers DSL high-speed Internet access and long distance,
advanced voice features and other services. The company's
BellSouth Answers(SM) package combines local and long distance
service with an array of calling features; wireless data, voice
and e-mail services; and high-speed DSL or dial-up Internet
service and Cingular Wireless. In the business market, BellSouth
serves small, medium and large businesses providing secure,
reliable local and long distance voice and data networking
solutions. BellSouth also provides online and directory
advertising services through BellSouth(R) and
The Real Yellow Pages(R).

BellSouth owns 40 percent of Cingular Wireless, the nation's
second largest wireless company, which provides innovative
wireless voice and data services.

BELLSOUTH CORP.: Fitch Comments on Sale of its LatAm Assets
BellSouth Corp. (BellSouth) announced that it has signed a
definitive agreement to sell its Latin American operations to
Telefonica Moviles. The sale, when completed, will provide
BellSouth with $4.2 billion in after-tax cash proceeds, and
remove $1.5 billion in debt from its consolidated balance sheet.
Telefonica Moviles will assume debt associated with the acquired
operations. The transaction is expected to close in the second
half of 2004.

Fitch Ratings (Fitch) currently rates BellSouth's senior
unsecured long-term debt 'A+' and the securities are on Rating
Watch Negative. The Rating Watch status was designated on Feb.
17, following the announcement that Cingular Wireless, a joint
venture between BellSouth and SBC Communications, will acquire
AT&T Wireless in a $41 billion cash transaction. The Rating
Watch also applies to the existing long-term debt of
subsidiaries that no longer issue debt--BellSouth
Telecommunications and BellSouth Capital Funding--as BellSouth
has consolidated its financing activities at the parent level.
The 'F1' commercial paper rating of BellSouth is not under

BellSouth's credit profile is not expected to change solely as
the result of the sale of the Latin American operations. Fitch
will take into account the positive effect of the Latin American
sale on BellSouth's final ratings when it reviews the leveraging
impact of the Cingular/AT&T Wireless transaction on BellSouth's
overall credit profile. Fitch notes that the cash proceeds from
the asset sale would reduce the original estimated $10 billion
in external funding BellSouth would have needed to complete
Cingular's acquisition of AT&T Wireless.

In 2003, BellSouth's debt-to-EBITDA was approximately 1.5 times
(x). To maintain its current 'A+' rating, Fitch would like to
see BellSouth's debt-to-EBITDA return to the 1.5-1.6x level
within 12-18 months following the close of the Cingular/AT&T
Wireless transaction.

CONTACT:  John Culver, CFA +1-312-368-3216, Chicago
          Bill Densmore +1-312-368-3125, Chicago

MEDIA RELATIONS: James Jockle +1-212-908-0547, New York

BELLSOUTH CORP.: S&P May Still Cut Ratings
Standard & Poor's Ratings Services said Monday that its ratings
for BellSouth Corp. (A+/A-1) remain on CreditWatch with negative
implications following the company's announcement of a
definitive agreement to sell its Latin American wireless assets
to Spanish telecommunications carrier Telefonica S.A. After-tax
cash proceeds of about $4.2 billion are expected to be used to
partially pay BellSouth's 40% share of the proposed purchase by
Cingular Wireless LLC of AT&T Wireless. However, the continued
CreditWatch listing reflects the fact that BellSouth will still
have to fund another estimated net $10 billion related to its
share of the transaction. This requirement will likely include a
significant debt component.

On Feb. 17, 2004, Standard & Poor's placed the ratings of
regional Bell operating companies (RBOCs) SBC Communications
Inc. (A+/A-1) and BellSouth Corp. (A+/A-1), as well as wireless
carrier Cingular Wireless LLC (A+/A-1), on CreditWatch with
negative implications. At the same time, the CreditWatch listing
for AT&T Wireless Services Inc. (BBB/A-2) was revised to
positive from developing. These actions reflected the announced
agreement by Cingular to acquire AT&T Wireless' stock for $41
billion in cash, plus the assumption of AT&T Wireless' $10
billion of debt.

The CreditWatch listing reflects the potential impact of
additional debt incurrence. In addition, Standard & Poor's will
assess the effect on these companies' business risk profiles
that the acquisition will have, including integration risk, as
well as greater scale and other synergistic benefits. Given that
there will still be five major national wireless players after
this transaction, industry competition and pricing pressures may
not be markedly reduced from this combination. In fact, pricing
pressures may be exacerbated if Cingular chooses to be more

The ratings for Cingular were placed on CreditWatch because the
company is rated with its parents. The CreditWatch listing for
AT&T Wireless reflects the company's potential acquisition by
the higher-rated Cingular entity.

DISCO: New Owner To Receive Company Debt-Free
Chilean supermarket operator Cencosud, which agreed Friday to
buy Argentine supermarket chain Disco from Dutch peer Royal
Ahold NV (AHO), expects to receive Disco debt-free once the
US$315-million deal closes, Dow Jones reports, citing Cencosud
chief executive Laurence Goldborne.

According to Cencosud Chairman Horst Paulmann, the deal will
close in roughly five to seven months. "There is no fixed
deadline" for the transaction to be completed, he added.

Cencosud will have to wait for Ahold to resolve the legal issues
that for months have troubled Ahold's attempt at selling the
Argentine unit.

In the meantime, Cencosud will already have a say in running
Disco, Goldborne said.

FRANCIONI: Judge Approves "Concurso Preventivo" Motion
Judge Ottolenghi of Buenos Aires Court No. 4 approved a
"Concurso Preventivo" motion filed by local company Francioni
S.A., reports Infobae.

With assistance from Dr. Juarez, Clerk No. 7, the court named
Silvia Amanda Fernandina as receiver who will oversee the
Company's reorganization process.

The receiver will authenticate creditors' claims until March 26,
2004. Following authentication of the claims, the receiver will
then prepare the individual reports and submit these reports to
the court on May 12, 2004. Submission of the general report
follows on June 25, 2004.

The informative assembly, one of the last parts of the
reorganization process, will be held on December 17, 2004.

The Company, which manufactures eyeglasses, is seeking to
reorganize after failing to meet its financial obligations to

CONTACT:  Francioni S.A.
          1st Floor, Room B
          Parana 777
          Buenos Aires

          Silvia Amanda Fernandina, Receiver
          Asuncion 4642
          Buenos Aires

HANDYPLAST: Declared Bankrupt by Court
Judge No. 7 of the Civil and Commercial of San Martin, Argentina
declared local company Handyplast S.A. "Quiebra," reports

The court appointed Estudio Polistina, Rancano to be the
Company's receiver, who will verify creditors' claims until
March 24, 2004.

The deadlines for the submission of the individual and general
reports have been set for May 20, 2004 and July 20, 2004,
respectively. The Company's bankruptcy case will close with the
liquidation of its assets to repay creditors.

          Lamadrid 2063
          San Martin

          Estudio Polistina, Rancano - Receiver
          Pueyrredon 2700 Villa Maipu
          San Martin

NII HOLDINGS: Closes Tender Offer
NII Holdings, Inc. (Nasdaq: NIHD) announced Monday that the
previously announced offer to purchase and consent solicitation
by its wholly owned subsidiary, NII Holdings (Cayman), Ltd.
("NII Cayman"), relating to all of NII Cayman's 13% Senior
Secured Discount Notes due 2009 (the "13% Notes," ISIN No.
USG6520PAA33), had expired and that NII Cayman had purchased
$180,767,577 principal face amount, or 99.97%, of the 13% Notes
for $210,594,227. NII Holdings, Inc. also announced that the
amendments to the indenture under which the 13% Notes were
issued, as set forth in the Supplemental Indenture dated
February 18, 2004, had become operative. The amendments to the
indenture eliminated substantially all restrictive covenants and
certain event of default provisions.

About NII Holdings, Inc

NII Holdings, Inc., a publicly held company based in Reston,
Va., is a leading provider of mobile communications for business
customers in Latin America. NII Holdings, Inc. has operations in
Argentina, Brazil, Mexico and Peru, offering a fully integrated
wireless communications tool with digital cellular service,
text/numeric paging, wireless Internet access and Nextel Direct
Connect(R), a digital two-way radio feature. NII Holdings, Inc.
trades on the Nasdaq market under the symbol NIHD. Visit the
Company's website at

Nextel, the Nextel logo, Nextel Online, Nextel Business Networks
and Nextel Direct Connect are trademarks and/or service marks of
Nextel Communications, Inc.

CONTACT:  Investor Relations:
          Tim Perrott
          Tel: +1-703-390-5113

          Media Relations:
          Claudia E. Restrepo
          Tel: +1-786-251-7020

SIDERAR: Evaluating Maintenance Plans for No. 1 Blast Furnace
Argentine flat steelmaker Siderar is in the middle of evaluating
maintenance plans for its No. 1 blast furnace, Business News
Americas reports, citing company spokesperson Guillermo

The maintenance plans will require putting its No. 2 furnace
into operation as backup according to the official. However, he
maintains that since the No. 1 furnace is operating normally,
"We are not thinking of increasing capacity."

He also adds that blast furnace No. 2 also requires some
investment, and that the project is being evaluated separately.
Mr. Etchepareborda also states that no definitive decision on
the project will be taken this year.

Buenos Aires based Siderar is Argentina's biggest flat
steelmaker with an installed capacity of 2.2Mt/y. The Company,
which is controlled by the Techint group, posted an income of
ARS422.2 million in 2003 from ARS40.7 million in 2002, owing to
a huge increase in domestic shipments. Net sales were also up
last year at ARS2.731 billion.

* Argentina Struggles To Circumvent New Debt Default
Talks between Argentina and the International Monetary Fund were
making headway Monday as the embattled government makes its
last-ditch attempt to avoid a new debt default, Reuters reports.

However, sources close to the talks said the two sides remained
deadlocked on two main issues.

"There was some progress," one source close to the talks told
Reuters on condition of anonymity, referring to a meeting
between Economy Minister Roberto Lavagna and IMF official John
Dodsworth in Buenos Aires on Monday. "Work is ongoing."

The two sides were discussing steps the lender wants Argentina
to take to keep a loan deal on track, sources said. Argentina is
facing a US$3.1 billion debt deadline with the International
Monetary Fund on Tuesday.

Sources close to the talks said that both camps remained stuck
on IMF demands that Argentina rubber-stamp its choice of banks
to restructure its US$88 billion of defaulted debt and raise the
bar on how many creditors must accept its debt offer to deem it
a success.

Argentina is refusing to look into some US$15 billion in
international reserves to repay US$3.1 billion due to the IMF on
Tuesday, saying the fund must first promise it will effectively
reimburse it.

"The president has made his decision clear," a presidential
spokesman said on Monday, referring to President Nestor
Kirchner's repeated refusal to pay unless the IMF yields first
and signals it will approve the second review of a three-year
US$13.3 billion loan program, which would release US$3.1 billion
to Argentina.

Argentine Central Bank President Alfonso Prat Gay was seeking to
drum up support from peers among the Group of Seven rich nations
-- the IMF's main shareholders -- at a meeting of central bank
heads in the Swiss city of Basel, a bank source said.

If Argentina defaults, like it did on a similar payment to the
fund in September, the IMF will effectively suspend relations
with Buenos Aires, halting any use of IMF resources and further
disbursements until the arrears are paid. A default would also
jeopardize any new aid from other multilateral lenders like the
World Bank and Inter-American Development Bank (IADB).

Argentina, the IMF's third-largest debtor after Brazil and
Turkey, currently owes around $7.47 billion to the World Bank,
around $8 billion to the IADB and about $15 billion to the IMF.

But even if Argentina and the IMF work things out, Argentina
still has to deal with angry bondholders, from German dentists
to Wall Street fund managers to Japanese and Italian pensioners,
who are clamoring for their governments to act to protect their

Bondholders want to recover at least 65% of their original
investments, and debt talks have been at an impasse for months.
Argentina, on the other hand, has proposed to repay just 25% of
the US$88 billion it defaulted on in January 2002, in the throes
of its worst-ever economic crisis.


ANNUITY & LIFE: Reports Full Year 2003 Net Loss of $132M
Annuity and Life Re (Holdings), Ltd. (NYSE: ANR) reported Monday
its financial results for the three and twelve month periods
ended December 31, 2003. In addition, it reported that it would
restate its third quarter 2003 financial results to correct an
accounting error related to its annuity reinsurance contract
with Transamerica.

While preparing its financial statements for the fourth quarter
of 2003, the Company discovered an error in its previously
reported results for the third quarter of 2003. In the third
quarter, the Company incorrectly released approximately $3.8
million of liabilities associated with its Transamerica annuity
reinsurance contract. The Company plans to file an amended Form
10-Q later this week. The amended filing will reflect an
increase in previously reported liabilities and will reduce
previously reported net income of $33,392 to a loss of
$3,786,905, or a $3,820,297 reduction. Because the Company's
policy is not to increase deferred acquisition costs previously
amortized, the restatement of the third quarter financial
results will not increase the amount of the deferred acquisition
costs asset recorded by the
Company at September 30, 2003 or at December 31, 2003.

The Company also reported a net loss of $7,177,423 or $0.28 per
fully diluted share for the three month period ended December
31, 2003 as compared to a net loss of $99,879,901 or $3.88 per
fully diluted share for the three month period ended December
31, 2002. The net loss in the fourth quarter of 2003 was
primarily the result of a $3.5 million loss from MetLife's
recapture of its life reinsurance agreement with the Company,
$1.6 million of reported claims in excess of those anticipated
at the time of recapture on certain life reinsurance agreements
that were recaptured earlier in the year, an increase in the
Company's reserves for GMDB/GMIB exposure of $0.8 million, and
the establishment of a $0.6 million reserve for estimated
exposure to claims that have initially been denied by the
Company's ceding companies but may ultimately be paid. These
items were partially offset by a $1.8 million favorable change
in the fair value of the embedded derivative associated with one
of the Company's annuity reinsurance agreements.

Net realized investment losses for the three month period ended
December 31, 2003 were $101,432 or $0.00 per fully diluted share
as compared with net realized investment gains of $8,935,951 or
$0.35 per fully diluted share for the three month period ended
December 31, 2002.

The Company also reported a net loss of $132,155,584 or $5.11
per fully diluted share for the twelve month period ended
December 31, 2003 as compared to a net loss of $128,887,285 or
$5.01 per fully diluted share for the twelve month period ended
December 31, 2002. The net loss for the twelve months ended
December 31, 2003 includes the restatement of the Company's
third quarter results discussed above.

Unrealized gains on the Company's investments declined to
$1,840,849 as of December 31, 2003 from $2,211,223 at September
30, 2003. The Company's investment portfolio currently maintains
an average credit quality of AA. Cash used by operations during
2003 was $112,176,985 compared to $33,187,656 for 2002. At
December 31, 2003, virtually all of the Company's invested
assets were pledged as collateral for the benefit of its U.S.
based cedents. Book value per share at December 31, 2003 and
September 30, 2003 was $5.11 and $5.39, respectively. Tangible
book value, which the Company defines as GAAP book value
excluding deferred acquisition costs, was essentially unchanged
at $2.50 at December 31, 2003 as compared to $2.56 at September
30, 2003. The figures provided for September 30, 2003 reflect
the restatement described above.

Jay Burke, Chief Executive Officer of the Company, commented,
"This quarter's results, while a loss, reflect significant
progress toward stabilizing our Company. We incurred a charge
from the MetLife recapture, but have now put the MetLife
contract and its related expense and resource drain behind us.
While we received more death claims than we anticipated on a few
treaties that were recaptured earlier this year, exposure to any
additional deterioration on these treaties should be minimal.
The MetLife recapture was effective May 5, 2003 so we already
have seven months of claims reported to us.

We regret that we had to restate our third quarter 2003
financial results. While the restatement increases our loss for
the year, it is important to note that the restatement does not
change our view that the Transamerica contract should breakeven
or produce a very small profit in the future.

We are still holding a large portion of our general account
investment portfolio in very short duration assets because of
the low interest rate environment and the risk that interest
rates may rise. The low interest rate environment is hindering
our ability to restructure our portfolio to improve our yield.
We plan to continue to hold a relatively large portion of our
assets in very short duration investments until interest rates
rise or we conclude they are not going to rise in the
foreseeable future. We expect our expense reduction efforts to
begin taking hold in the second quarter of 2004.

As of December 31, 2003 our unsecured letter of credit facility
at Citibank stood at approximately $15.0 million. In February
2004, we fully secured our outstanding letters of credit with
Citibank. We thank Citibank for their support through our more
difficult times. Also in February, we paid Transamerica
substantially all amounts it claimed were owed by the Company,
subject to a $5.0 million offset for investment related expenses
we felt were owed to us by Transamerica. Transamerica has
demanded arbitration, asserting that the $5.0 million offset is
not justified and that the Company owes interest on the amounts
that Transamerica alleged were due.

I continue to caution that the Company continues to face other
significant issues as well. We still have the pending
shareholder litigation, GMDB/GMIB exposure and unresolved
collateral demands associated with our reinsurance agreement
with CIGNA, and, while we have narrowed the gap in our dispute
with Transamerica, we still have the economic exposure from that
agreement to contend with.

Now that the MetLife arbitration is resolved, we have begun a
review of potential products that we may be able to market in
the future. While we are in the early stages of assessing
whether we can, should, or will begin selling new products, and
while it may take time to come to fruition, the good news is we
feel we are now in a position to at least consider the

If we can reposition our general account investment portfolio to
achieve a substantially higher yield within our investment
guidelines, successfully defend ourselves against the
shareholder class action suit, and improve the long run returns
on the Transamerica portfolio, we believe we can achieve
breakeven or a very modest profit in 2004. Our failure to
achieve any one of these objectives could have a material
adverse effect on our financial condition and results of

Life Segment Results

Life segment loss for the three month period ended December 31,
2003 was $6,530,547, as compared with a segment loss of
$71,034,774 for the comparable prior period of 2002. As
mentioned above, major contributors to the current quarter's
loss include a $3.5 million loss from Met Life's recapture of
its life reinsurance agreement, $1.6 million of reported claims
in excess of those anticipated at the time of recapture on
certain life reinsurance agreements that were recaptured earlier
in the year, and the establishment of a $0.6 million reserve for
estimated exposure to claims that have initially been denied by
the Company's ceding companies but may ultimately be paid.

Annuity Segment Results

Annuity segment income was $4,996 for the three month period
ended December 31, 2003, as compared with a loss of $33,191,785
for the comparable prior period of 2002. The major contributor
to the current quarter's income was a favorable change in the
fair value of embedded derivatives of $1.8 million offset in
part by an increase of $0.8 million in reserves for GMDB/GMIB

Corporate Segment Results

Corporate segment loss for the three month period ended December
31, 2003 was $651,872, as compared with segment income of
$4,346,658 for the comparable prior period of 2002. The primary
reason for the significant decline in income was a decrease in
realized capital gains from $8,935,951 in the fourth quarter of
2002 to a realized loss of $101,432 in the current quarter. The
fourth quarter of 2002 also includes approximately $4.5 million
in costs associated with efforts to raise capital.

To see financial statements:

CONTACT:  Annuity & Life Re (Holdings), Ltd.
          Jay Burke

BERMUDA FIRE: Liquidators Seek to Revise Scheme Of Arrangements
Over $200 million worth of claims by creditors of The Bermuda
Fire & Marine Company Ltd could be settled sooner than expected,
as its liquidators are set to propose for a change in the scheme
of arrangements, the Royal Gazette reports.

The proposal, which will be filed on April 1 in the High Court
in Bermuda and on March 31 in London, will lay the legal
foundation needed to make the earlier-than-expected payouts.

Bermuda Fire, which went bankrupt in 1993 and led to one of the
biggest corporate scandals in the Island's history, was said to
owe approximately $1 billion to creditors at the time of its
collapse. Creditors were expected to wait beyond 2015 to be paid
as much of the recovered cash as possible. In the new proposal,
the settlement date is put forward by nine years, from 2015 to

Company liquidators want to pay out creditors early some $222
million within the next three years. This will take the total
amount paid out to creditors to $300 million. They also put the
estimate of ultimate liabilities--or the amount owed by the
failed Bermuda Fire--at $823 million, down from the $1.2 billion
registered in 1998, said the legal documents.

"The liquidators and committee of inspection believed the
proposed closure mechanism... provides the opportunity for
scheme creditors to participate in the final settlement of all
their respective claims against the company and will allow
payment, in present value terms, of the maximum sum to the
scheme of creditors in within the minimum appropriate time
scale," the proposal states.

Should the proposed changes get legal approval, a creditors
meeting is scheduled to take place at the Fairmont Hamilton
Princess on May 18 at 10 a.m., where they will vote on the early

According to the documents issued by the liquidators, creditors
of Bermuda Fire have been paid out $84 million since July 1997,
and a further $199 million is cash reserved for future
distribution. The documents also state that they have realised
assets of $222 million.

BF&M directors paid out fifty million dollars in December 1999
as an out-of-court settlement when the liquidators sued the
directors of the company. BF&M's directors accepted no
wrongdoing for the case.

The documents also state that reinsurance recoveries to date,
including $51 million collected in the first quarter of 2004,
total $283 and approximately 88 percent of the reinsurance
programme has now been collected or commuted.

The liquidators say that the current rate of distribution of
funds is 33 percent and for 2006 it would be in the range of 53
to 63 percent.

The Royal Gazette recalls that the Bermuda Fire & Marine Company
Ltd. was incorporated in Bermuda through the Bermuda Fire and
Marine Insurance Company Act in 1903 as a joint stock company
with limited liability.

In a controversial move in 1991, its local and international
business were split, creating BF&M as the local insurance
division, which still operates today, and leaving the debt-
ridden international segment with the original name. Its
international business was primarily reinsurance written between
1969 and 1983 through both Weavers and Driver underwriting
agents in the UK, and between 1978 and 1985 through Bermuda
London Underwriting Agency Ltd., underwriting agent in Bermuda.
Bermuda Fire & Marine Company also wrote a smaller book of
international business in Bermuda from 1964 to 1990. The
principal type of business underwritten was liability insurance
and reinsurance, including general and product liability for
manufacturers, fidelity, directors' and officers', and in later
years professional indemnity and medical malpractice.

Following restructuring in 1991, the Company continued the run-
off of its international business, paying agreed claims in the
normal course, but over the next two years the company's
financial position deteriorated and it ceased paying claims on
October 15, 1993. The run-off of Bermuda Fire is managed by
KWELM Management Services Ltd., a management company that was
formed in December, 1992 to administer the run-off of the KWELM
Companies. Bermuda Fire participated in the underwriting pools
of HS Weavers (Underwriting) Agencies Ltd and CR Driver & Co.
Ltd. between the years of 1969 and 1983; and between 1978 and
1985 through Bermuda London Underwriting Agency. Bermuda Fire
also wrote a smaller book of international business in Bermuda
from 1964 to 1990

CONTACT:  J.C. McKenna, G.H. Hughes and L.A. Joaquin
          BFMIC Liquidators
          John Stow House
          18 Bevis Marks, London
          EC3A 7JB UK
          Phone:  +44 (0) 20 7645 4995
          Fax:  +44 (0) 870 600 7582

          Clifford Chance LLP
          10 Upper Bank Street, London
          E14 5JJ, UK

          Appleby Suprling & Kempe
          Canons Court
          22 Victoria Street,
          PO Box HM 1179
          Hamilton, Bermuda

SEA CONTAINERS: Reports $111.4M Full Year 2003 Net Earnings
Sea Containers Ltd. (NYSE: SCRA and SCRB,
passenger and freight transport operator, marine container
lessor, and leisure industry investor, announced Monday its
results for the quarter and year ended December 31, 2003. For
the quarter net earnings were $11.6 million ($0.54 per common
share diluted) on revenue of $433.2 million, compared with net
earnings of $14 million ($0.67 per common share diluted) on
revenue of $409.7 million in the prior year period.

For the year ended December 31, 2003 net earnings were $111.4
million ($5.20 per common share diluted) on revenue of $1.68
billion, compared with net earnings of $41.9 million ($2.08 per
common share diluted) on revenue of $1.43 billion in 2002.
Excluding gain on sale of ferry assets and non-recurring
charges, net earnings in 2003 were $57.4 million, up 37% over

EBITDA in 2003 was $319.5 million compared with $247.3 million
in 2002.

Mr. James B. Sherwood, President, said that results from
passenger and freight transport operations at the EBIT level
were $10 million less in 2003 than in 2002 as a result of sale
of the Isle of Man Steam Packet Company in July, 2003, however,
savings in finance costs were $10.6 million as a result of debt
reduction through elimination of the Steam Packet debt and
retirement of $136 million of senior notes using the proceeds
from the sale.

Silja's profits at the EBIT level declined from $54.1 million in
2002 to $42.9 million in 2003, partially as a result of
consolidating 100% of the equity in that unit for all of 2003
while consolidating only 50% in the first four months of 2002
which is a loss making period. 2002 also benefited from a cruise
ship charter termination payment and an arbitration award.

GNER's profits at the EBIT level increased in 2003 to $84.1
million from $68.9 million in 2002 as a result of increased
passenger volumes and compensation payments by Network Rail.
15.1 million passengers were carried, a record in the eight year
period of the present franchise.

EBIT from container leasing and related activities rose from
$23.5 million in 2002 to $36 million in 2003, an increase of
53%. GE SeaCo, the company's 50-50 joint venture with GE
Capital, placed on lease $204 million of new containers in 2003
and Sea Containers' fully owned factory, depot and service
operations enjoyed greatly improved results.

The company's property, plantations and publishing division
reported profits at the EBIT level of $6.6 million, up 47% from
$4.5 million in 2002. Land sales at the port of Newhaven and
increased profits from the company's table grape plantation in
Brazil were largely responsible for this improvement.

The company's investment in Orient-Express Hotels Ltd.
contributed $10.9 million to net earnings in 2003 compared with
$14.7 million in 2002 as a result of lower earnings in the year
and a lower shareholding compared with 2002. Sea Containers
currently owns 14.4 million common shares in Orient-Express
Hotels which have a current market value of approximately $270

Long term debt obligations declined from $1.8 billion at the end
of 2002 to $1.6 billion at the end of 2003.

Mr. Sherwood highlighted some current events which affect the
company. First, discussions are at an advanced stage with the
U.K. Strategic Rail Authority to pay them part of the settlement
reached in 2003 with Network Rail with respect to Network Change
arising from the Hatfield rail accident in October, 2000. This
payment has been taken into account in the earnings reported by
GNER for 2003. The proposed agreement would also release
approximately $53 million of cash to Sea Containers which is
being held to secure franchise obligations.

Second, Sea Containers has reached an agreement in principle to
acquire seven container businesses in Australia and New Zealand
from the Owens Group and to sell its interest in the Westfield
Container Depot in Auckland, New Zealand for a net amount of
NZ$11.5 million (US$8 million). This investment is being made at
an EBITDA multiple of about 3.5x and will greatly strengthen the
company's participation in the refrigerated and tank container
service and transport businesses in Australasia which are
outside the GE SeaCo joint venture.

Looking forward to 2004, Mr. Sherwood said that the following
developments could be significant:

1.  A severe shortage of steel in China has forced new container
prices up by 25% in recent months and higher lease rates should
follow both for new containers and existing containers.  New
containers are being rationed by manufacturers to all buyers,
whether leasing companies or ocean carriers.  Container lease
rates for older containers are expected to rise rapidly until
steel availability improves.  This situation will probably
reduce the on-take of new containers by GE SeaCo from the $204
million level achieved in 2003 to perhaps only $150 million in

2.  Fuel prices are running at higher than expected levels
although the company has generally been able to buy low sulphur
heavy fuels for its fleet at acceptable prices.  Of greater
concern is the cost of gasoil which is used by the fast ferries
and the gas turbine ship Finnjet in the second and third
quarters of 2004.

3.  The company is actively engaged in bidding for the new
Integrated Kent commuter rail franchise as well as re-bidding
for the GNER franchise which terminates in April, 2005.  New
franchise decisions are expected by the end of 2004.

4.  The company is currently evaluating three possible additions
to its ferry business portfolio.

5.  The benefits of moving to seasonal fast ferry operation in
the British Isles services will be realized in 2004.

6.  The entry of the Baltic States into the European Union in
May, 2004 is likely to increase passenger carryings on Silja's
services to those countries and the Finnjet will inaugurate its
new service between Germany, Estonia and Russia in mid year.

7.  The outlook for Orient-Express Hotels is for an improved
profit in 2004.

"In sum, the earnings prospects for 2004 are encouraging," he

Mr. Daniel J. O'Sullivan, Chief Financial Officer, highlighted
positive financial news by reporting that Silja's $67 million of
bonds falling due in February, 2004 have been redeemed with
syndicated bank debt. He said Sea Containers plans to sell up to
$150 million of new 10 year unsecured senior notes in April,
2004 to retire as soon as practicable $80 million of 12.5%
debentures which mature in December, 2004 but which can be
called today without premium. The balance of the funds has been
earmarked for acquisitions, failing which it will be used for
debt reduction or other corporate purposes. He said the roadshow
in connection with the sale of the new notes would be helpful in
bringing the company to the attention of new equity investors.

Mr. O'Sullivan said that an additional $6 million non-recurring
charge had been recognized in the fourth quarter of 2003 for old
refrigerated containers which the company has decided not to
refurbish for continued use.

Mr. O'Sullivan noted that at the December, 2003 presentations to
investors he had indicated the company's plan to reduce long
term debt to $800 million by the end of 2006. He said this
program was still achievable despite the planned new note issue
if the market price of Orient-Express Hotels rises to $30 by
then, which he considered a reasonable target. He confirmed that
the company met all its financial lending covenants at the end
of 2003.

No registration statement or other qualification document
relating to an offering of the proposed senior notes referred to
in this news release has been filed with the U.S. Securities and
Exchange Commission or any other securities regulatory
authority. The senior notes may not be sold nor may any offer to
buy be accepted prior to the time a registration statement or
other qualification document has been filed and become effective
or an applicable exemption from registration or qualification is
available to Sea Containers. This news release does not
constitute an offer to sell or a solicitation of an offer to buy
in any jurisdiction. Also there can be no offer or sale of the
senior notes in a state of the United States where the offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any state.

Management believes that EBITDA (earnings before interest, tax,
depreciation and amortization) is a useful measure of operating
performance, to help determine the ability to incur capital
expenditure or service indebtedness, because it is not affected
by non-operating factors such as leverage and the historic cost
of assets. However, EBITDA does not represent cash flow from
operations as defined by U.S. generally accepted accounting
principles, is not necessarily indicative of cash available to
fund all cash flow needs and should not be considered as an
alternative to earnings from operations under U.S. generally
accepted accounting principles for purposes of evaluating
results of operations.

To see financial statements:


CFLCL: Responds to Notice Issued by Shareholders
In response to the "Notice" published March 02, 2004 in the "O
Globo" newspaper by Fondelec Essential Services Growth Fund,
L.P. and The Latin America Energy and Electricity Fund I, L.P.
(collectively referred to as "Fondelec"), the company Companhia
Forca e Luz Cataguazes-Leopoldina hereby states that:

- To the company's surprise, there was no fresh news giving
cause for Fondelec to publish the Notice. This was simply a
desperate attempt to destabilize the market and to further
hidden objectives, to the detriment of the Company, its minority
shareholders and the market in general.

- The Company refers once again to the Relevant Information it
published concerning the sale of assets that generated funds of
around R$ 80 million and a profit of some R$ 45.2 million,
demonstrating the Company's financial capability to pay
dividends in the 2003 fiscal year.

- All the proposals submitted to the Extraordinary Shareholders'
Meeting ("AGE") held on December 9th, 2003 had been previously
analyzed and deemed to be in compliance with corporate law and
the regulations governing the distribution of electricity by the
respective regulatory agencies: Comissao de Valores Mobili rios
- CVM (Brazilian Securities and Exchange Commission) and the
Agˆncia Nacional de Energia El‚trica - Aneel (National
Electricity Regulatory Agency).

- The effectiveness of the aforementioned resolutions has been
suspended by temporary legal rulings, which can still be
overturned by the appeals that have already been lodged by the

- Fondelec failed to mention in its Notice the speeches given to
the Federal Senate by the right Hon Senator Mr. Eduardo Azeredo
(PSDB/MG), on February 11, 2004 and by the right Hon. Senator
Mrs. Maria do Carmo Alves (PFL/SE), on February 18, 2004, the
first of which condemned the hostile attempt to take over the
control of the Company and the second of which expressed concern
at the control of the company moving to overseas companies and
the maintenance of the services that are essential to the
Brazilian population. Both Senators represent states in which
the company operates either directly or through its

- It should be noted that a considerable number of minority
preferred shareholders, who are traditional investors in the
company, have also lodged appeals against the legal ruling, with
a view to upholding the resolutions taken at the AGE and
receiving their respective dividends.

- The company is awaiting its appeals to be analyzed and judged,
and has great faith in the Courts of the states of Rio de
Janeiro and is confident that Truth and Justice will eventually

CONTACT:  In Cataguases
          Phone: +55 32 3429-6000
          Fax: +55 32 3429-6480 / 3429-6317

          In Rio de Janeiro
          Phone: +55 21 2122-6900
          Fax: +55 21 2122-6931

          Web site:
          E-mail to:

EMBRATEL: MCI Execs Meet With Fixed-Line Telephone Firms' Reps
Executives from MCI, formerly WorldCom Inc., met with
representatives of the top three fixed-line telephone operators
in Brazil last week to discuss the sale of Embratel
Participacoes SA, Reuters reports, citing an unnamed source.

MCI put Embratel on the block last November as part of a
reorganization plan approved by a U.S. bankruptcy court. Spain's
Telefonica , Brazil's Tele Norte Leste Participacoes
(nyse:TNE) and Brasil Telecom Participacoes
(nyse:BRP) have already said they plan to bid for
Embratel's data transmissions division.

However, analysts say the three companies may face regulatory
challenges from Brazil's National telecommunications Agency
(Anatel), or the government's Cade anti-monopoly body should
they push on with a bid.

Telos, the pension fund of Embratel workers, has also said it
wants to buy control of the Company from MCI.

Earlier this week, a source from Telmex (TMX.N) (TELMEXL.MX)
revealed that Mexico's leading telephone company will bid for a
controlling stake in Embratel.

CONTACT:   Silvia M.R. Pereira, Investor Relations
           Tel: (55 21) 2121-9662
           Fax: (55 21) 2121-6388

USIMINAS: Ratings Unaffected by 2003 Results, Says S&P
Standard & Poor's Ratings Services said Monday that prospects
for Usinas Sider£rgicas de Minas Gerais (Usiminas) remain in
line with expectations and that its ratings on Usiminas will not
be affected by the company's 2003 results. Usiminas'
consolidated operating profitability remained strong in 2003,
thanks primarily to the favorable export market environment
(strong demand from China and high international prices). Credit
measures improved continually through the past year thanks to
stronger cash flow and some debt reduction in dollar terms (with
total debt to EBITDA reaching 2.6x by year end). The company's
strong cash generation should continue in 2004, even with some
cost pressure in coal, coke, and iron ore, as steel prices are
expected to remain high for the most part this year and
Brazilian demand is also projected to improve gradually.
Finally, debt reduction accomplished in 2003 and projected for
2004 will eventually lead to lower interest expenses (positive
for credit measures), while initiatives to stretch debt tenors
out in first-quarter 2004 will reduce exposure to short-term
debt, as has already been factored into the ratings.

ANALYST:  Reginaldo Takara, Sao Paulo (55) 11-5501-8932


AVIANCA: Judge Delays Hearing Over Request for Extension
U.S. Bankruptcy Court Judge Allan Gropper delayed until March 26
a hearing at which Colombia's flagship airline Avianca will ask
for an extension of a period to form a plan for emerging from
bankruptcy, reports Reuters.

The airline said it needed more time to continue negotiating
with potential investors. Avianca attorney John Scott told the
judge the airline has not yet received a "concrete proposal"
from the investors.

Should the request be granted, the deadline for submitting a
restructuring proposal, now set for March 30, would be pushed
back for the fifth time to April 30.

U.S. bankruptcy law automatically gives a company that files for
Chapter 11 protection four months to submit a reorganization
plan for approval by creditors and the court. A judge may extend
the period. Once the deadline has expired, creditors may submit
their own plan.

Avianca has a U.S. subsidiary, which allowed it to seek Chapter
11 proceedings last March to try to renegotiate at least $269
million in debt while continuing to operate. U.S. law is more
generous with debtor companies than Colombian legislation.

CONTACT:  Aerovas Nacionales de Colombia S.A.
          Avenida Eldorado, No. 93-30
          Bogota, Colombia
          Phone: +57-1-413-9511
          Fax: +57-1-413-9702
          Home page:
                    Vytis Didziulis, President
                    Leonor Montoya, Chairman
                    Nelson Gnecco, VP Administration and Finance

AVIANCA: Union to Carry On Go-Slow Operation
Avianca faces another setback in its attempt to seek a new
strategic partner and to present its restructuring plan in a New
York bankruptcy court.

According to Portafolio, the union representing the airline's
pilots decided to resume its go-slow operation at the beginning
of April. The decision was prompted by what the union describes
as the failure of the Company to fulfill the agreements it
entered into with regards to the workforce restructuring.

The pilots considered the airline's plan to lay off 38 pilots as
excessive and blamed bad administration for the current delays
in the operations of Avianca.


DESC: Announces Resolutions Adopted at its Shareholders Meetings
DESC, S.A. de C.V. (NYSE: DES; BMV: DESC) announced that the
following resolutions were adopted by the applicable
shareholders at Desc's Special Shareholders Meeting and General
Ordinary and Extraordinary Shareholders Meeting, which were held

1) Approval of the mandatory conversion of all the issued and
outstanding series "C" shares into series "B" shares and the
cancellation of the corresponding registration of the series "C"
shares in the Mexican National Registry of Securities (Registro
Nacional de Valores). This resolution will be effective on March
16, 2004. Starting on such date, Desc's American Depositary
Shares (ADSs), which are registered with the U.S. Securities and
Exchange Commission and trade on the New York Stock Exchange,
Inc., will represent 20 series "B" shares.

2) Approval of the voluntary conversion of series "A" shares
into series "B" shares and the voluntary conversion of series
"B" shares into series "A" shares, which conversions will be at
the request of shareholders. The series "A" shares have not
been, and will not be, registered under the United States
Securities Act of 1933, as amended, nor under the securities
laws of any jurisdiction outside of Mexico. Accordingly, the
voluntary conversion will be offered solely in Mexico and
shareholders of Desc in the United States will not be permitted
to participate in the voluntary conversion.

3) Approval of the amendment to Desc's by-laws to, among other
things, eliminate the foreign ownership restrictions on the
series "B" shares.

4) Approval of an increase of Desc's capital stock of
approximately 2.738 billion pesos (approximately US $248
million) by issuing 912,719,584 shares of common stock. As a
result of the capital increase, holders of

- series "A" shares will be entitled to subscribe for two series
"A" shares for every 3 series "A" shares they own;

- series "B" shares will be entitled to subscribe for two series
"B" shares for every 3 "B" series shares they own; and

- ADSs will be entitled to subscribe for 0.6667 ADS for each ADS
such shareholder owns. Fractional ADSs will not be issued, and
subscriptions will be rounded down to the next whole ADS. As a
result, holders of ADSs will need to own at least two ADSs in
order to receive one whole ADS.

- The subscription price is 3.00 pesos per share.

With respect to the capital increase, Desc entered into a Stock
Subscription Cooperation Agreement with Inversora Burs til, S.A.
de C.V., Casa de Bolsa, Grupo Financiero Inbursa. Subject to
certain conditions, this Agreement establishes that, if
shareholders do not subscribe for all of the shares resulting
from the capital increase, Desc will offer and Inbursa (on its
own or through third parties) will subscribe for such
unsubscribed shares up to $2 billion pesos, at the same price of
3.00 pesos per share.

The rights to subscribe for additional shares are offered solely
in Mexico. The exercise of these rights may be restricted by
applicable law in jurisdictions outside Mexico. The company has
made it clear that the subscription rights offered or sold have
not been and will not be registered in the US under the
Securities Act of 1933, as amended. This rights offering is made
for the securities of a Mexican company. The offer is subject to
the disclosure requirements of a Mexican company that are
different from those of the United States.

It may be difficult for you to enforce your rights and any claim
you may have arising under the federal securities laws, since
the issuer is located in Mexico, and some or all of its officers
and directors may be residents of Mexico. You may not be able to
sue a foreign company or its officers or directors in a foreign
court for violations of the U.S. securities laws. It may be
difficult to compel a foreign company and its affiliates to
subject themselves to a U.S. court's judgment.

DESC, S.A. de C.V. (NYSE: DES; BMV: DESC) is one of the largest
industrial groups in Mexico, with 2003 sales of approximately
US$ 2 billion and nearly 14,000 employees, which through its
subsidiaries is a leader in the Automobile Parts, Chemical, Food
and Property sectors.

CONTACTS:  Arturo D'Acosta Ruiz
           Marisol Vazquez Mellado
           Jorge Padilla Ezeta
           Tel: (5255) 5261-8044

           Maria Barona
           Melanie Carpenter
           Tel: 212-406-3690

GRUPO MEXICO: Fitch Removes Rating from Watch Negative
Fitch Ratings affirms the 'B-' local and foreign currency
ratings assigned to Grupo Mexico S.A. de C.V. (Grupo Mexico) and
removes the ratings from Rating Watch Negative. The Rating
Outlook is now Stable. In addition, Fitch affirms the following
ratings for Grupo Mexico's subsidiaries:

Minera Mexico S.A. de C.V. (Minera Mexico)

--Senior secured local currency, 'B';

--Senior secured foreign currency, 'B'.

Southern Peru Copper Corporation (SPCC)

--Senior unsecured foreign currency, 'BB-'.

Asarco Inc. (Asarco) --Senior unsecured rating, 'CCC'.

Grupo Ferroviario Mexicano, S.A. de C.V. (GFM)

--Senior unsecured local currency, 'BBB-';

--Senior unsecured foreign currency, 'BBB-'.

In conjunction with these rating actions, Fitch has assigned a
'B' senior unsecured rating to Americas Mining Corporation
(AMC), a wholly-owned subsidiary of Grupo Mexico that is the
direct parent company of Minera Mexico, Asarco, and Southern
Peru Copper Corporation (SPCC).

Grupo Mexico's 'B-' rating reflects the company's high leverage.
As of Dec. 31, 2003, Grupo Mexico's consolidated debt totaled
about $3.1 billion while total EBITDA was $690 million. In 2003,
the company's ratio of total debt-to-EBITDA was 3.5 times(x)
while interest coverage, as measured by EBITDA/interest expense,
was 4.4x. On a non-consolidated basis, Grupo Mexico has about
$80 million of bank debt due in 2004-2005. This holding company
debt is serviced primarily by the dividends Grupo Mexico
receives from its railway subsidiary, Grupo Ferroviario
Mexicano, S.A. de C.V. (GFM), which accounted for about 30% of
GM's consolidated EBITDA in 2003.

GFM's 'BBB-' local and foreign currency ratings are supported by
the company's solid competitive position, strong cash flows and
modest leverage. As a result of the recent financings, GFM's
ratio of total debt-to-EBITDA increased to 2.3x at Dec. 31,
2003, from 1.7x at year-end 2002, and EBITDA to interest expense
decreased to 6x at Dec. 31, 2003, from 27x in 2002. The level of
total debt of about $480 million is not expected to increase
significantly in the future, as both GM and Union Pacific
Railroad (Union Pacific), a minority shareholder, believe the
company is appropriately capitalized. Union Pacific has
indicated to Fitch that it will not approve further debt
increases. It has the ability to control through a very
restrictive shareholders agreement.

Fitch's 'B' rating of AMC, a direct subsidiary of Grupo Mexico,
reflects its high leverage as measured by the ratio of total
consolidated debt-to-EBITDA of about 5.2x. This company's debt
obligations are met primarily with dividends from SPCC. SPCC is
the financially strongest and lowest-cost mining asset held by
AMC due to its low leverage and very competitive cost structure.
This enables SPCC to support AMC's debt obligations with
dividends during troughs in the price cycle for copper. AMC is
rated one notch higher than its parent, Grupo Mexico, since
AMC's largest debt obligation is secured by its 54% stake in
SPCC. As of Dec. 31, 2003, AMC's total consolidated debt,
including that of its mining subsidiaries, totaled approximately
$2.6 billion while consolidated EBITDA totaled approximately
$500 million. Debt at the AMC level only, totaled approximately
$502 million.

During 2003, a year in which copper prices averaged 82 cents per
pound, SPCC generated $290 million of EBITDA. The company ended
2003 with $295 million of cash and marketable securities and
$350 million of total debt. SPCC's ratio of total debt-to-EBITDA
was 1.2x at Dec. 31, 2003 and the ratio of EBITDA-to-interest
expense was 16.5x. SPCC should continue to generate healthy cash
flows in 2004, especially under the current environment of high
prices, as every one-cent rise in copper generates about $8
million in additional EBITDA for the company. Fitch rates SPCC's
foreign currency debt 'BB-'. This rating is constrained by the
'BB-' foreign currency rating of Peru.

Fitch's 'B' rating of Minera Mexico's obligations continue to
reflect the company's high leverage post its debt restructuring
in April 2003. At year-end 2003, the company's total debt was
approximately $1.3 billion. Minera Mexico's EBITDA improved to
$190 million in 2003 from $106 million in 2002. As a result, its
ratio of total debt-to-EBITDA decreased to 7.3x from 13x in
2002, while interest coverage, as measured by EBITDA/interest
expense increased to 1.8x from 1x in 2002. On average, it is
expected that Minera Mexico's EBITDA will increase by about $7
million for every one-cent increase in average copper prices
vis-a-vis 2003.

On Feb. 3, 2004, Grupo Mexico announced that it had presented a
proposal to SPCC shareholders to sell all of its interest in
Minera Mexico to SPCC in return for additional shares in SPCC.
The proposal is pending discussion and approval by SPCC
shareholders and is expected to be a cashless stock-for-stock

The possible acquisition of Minera Mexico by SPCC holds the
potential to improve the credit profile of Minera Mexico by
facilitating the refinancing of Minera Mexico's currently
restrictive debt agreements that were the result of the
restructuring completed early last year. Refinancing of this
debt, given the current high copper price environment, would
provide Minera Mexico with increased financial flexibility and
allow it to both reduce its debt and to invest in projects that
enhance free cash flow. If the proposed merger transaction were
not cashless, and Minera Mexico's debt were rebalanced between
it and SPCC, SPCC's underlying credit quality would be weakened
considerably. It is not expected that it would be weakened
enough, however, to result in a downgrade of the company's
foreign currency rating.

Fitch's 'CCC' rating of Asarco's debt obligations reflects the
substantial uncertainty regarding the company's potential
environmental lawsuits, as well as its inability to generate
significant cash flow due to its high cash cost of production.
In 2003, Asarco generated revenues and EBITDA of $360 million
and $17 million, respectively. For each additional one-cent
increase in copper prices, Asarco's EBITDA should increase by
about $4 million.

Currently copper is above $1.30/lb. and has averaged about
$1.17/lb. in the first two months of 2004, a dramatic increase
over the 2003 average of $0.81/lb. and the 2002 average of just

CONTACT:  Anita Saha, CFA, +1-312-368-3179, Chicago
          Joe Bormann CFA, +1-312-368-3349, Chicago
          Alberto Moreno, +55-8-8335-7179, Mexico

MEDIA RELATIONS: James Jockle +1-212-908-0547, New York

HYLSAMEX: Forecasts 1Q04 Ebitda of Up to $80M
Mexican steel company Hylsamex's stock soared 14.72% to finish
at MXN9.90 Monday after it said it expected earnings before
interest, taxes, depreciation and amortization (EBITDA) to surge
in the first quarter of 2004, reports Reuters.

Hylsamex said its EBITDA for the first quarter could come in
between US$70 million and US$80 million, an increase of between
50 and 70 percent over both the last quarter of 2003 and the
year-ago period, boosted by higher steel prices.

Monterrey-based conglomerate Alfa SA (ALFA.MX) recently spun off
39% of its 90% stake in Hylsamex, and plans to spin off the rest
of the stake in early 2005.

On Monday, Hylsamex said that its role as a value-added steel
maker is allowing it to fully take advantage of a favorable
pricing environment.

Hylsamex, which accounted for just over one-quarter of Alfa's
sales, was hard hit by the 2000 world steel industry slump and
soaring natural gas prices in North America.

Last year, the Company completed the restructuring of its US$1
billion debt, and began to benefit from a recovery in global
steel markets.

"Hylsamex remains cautiously optimistic for the remainder of
2004 as a result of pricing and volume trends observed thus
far," the company said Monday.


PDVSA: VP Leaves Post, Yet to Name Replacement
Venezuelan Oil Minister Rafael Ramirez announced that Aires
Barreto has resigned from his post as vice president of
Petroleos de Venezuela SA (PDVSA) due to personal reasons, Dow
Jones Newswires relates.

In a statement to the Venpres state news agency, Minister
Ramirez explained that Mr. Barreto's resignation "has nothing to
do with a political position, but with strictly personal

He also thanked Mr. Barreto for standing by the administration
of President Hugo Chavez during an oil strike that lasted from
December 2002 to February 2003.

The strike, which was an attempt to pressure President Chavez
out of office, fizzled out and resulted in the layoff of some
19,000 PDVSA employees who have walked off their jobs.

A PDVSA spokesman said the Company hasn't yet named a
replacement for Barreto, who, according to local press
reports, is in India where his father recently passed away.

TELCEL BELLSOUTH: No Regulatory Issues to Block Telefonica Deal
Telcel BellSouth, the Venezuelan unit of U.S. telecommunications
firm BellSouth Corp., sees no regulatory hurdles in Spanish
mobile company Telefonica Moviles' (TEM) plan to purchase
BellSouth's Venezuelan assets.

"There should not be any problems," Aide Cisneros de Salas,
Telcel's vice president of public relations, said. "All the
regulations in all the countries are being complied with."

Venezuelan telecommunications watchdog Conatel wasn't
immediately available for comment on the deal.

Telcel BellSouth is Venezuela's leading cellular provider, with
over 3 million clients at the end of 2003.


S U B S C R I P T I O N   I N F O R M A T I O N

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