TCRLA_Public/040408.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, April 8, 2004, Vol. 5, Issue 70

                            Headlines



A N T I G U A   &   B A R B U D A

LIAT: Government Aid to the Rescue


A R G E N T I N A

ARZEN CORPORATION: Non-Payment of Debt Prompts Bankruptcy Ruling
COMERCIAL TUCUMAN: Initiates Reorganization Process
COMUNICACION GRUPO TRES: Seeks Permission to Reorganize
EDEMSA: Argentine S&P Reaffirms Bonds' Default Rating
FRIO Y CALOR: Court Authorizes Reorganiztion

GRINGO: Bankruptcy Process Begins By Court Order
HURD SUDAMERICA: Court Decree Makes Bankruptcy Official
KIRIOS: Court Issues Bankruptcy Ruling
MENLO: Declared Bankrupt by Court
RANDALL: Court OKs Creditor's Bankruptcy Motion

SANCOR: Argentine S&P Maintains 'raD' Rating on Bonds


B R A Z I L

SABESP: Capital Expenditures Forecast in '04
SABESP: Seeks CEF Financing on New Projects


C H I L E

AES GENER: Angles for Price Hike In April With Gas Woes
ENDESA CHILE: Forecasts Stable Pricing Despite Gas Rationing


C O L O M B I A

AVIANCA: Debt-Restructuring Plan Filing Allowed More Time


E C U A D O R

PACIFICTEL: Expected '04 Revenues To Fall Short Of Costs
PACIFICTEL: Regulator Orders Intervention Over Service Concerns
PACIFICTEL: Corruption Probe Shelves Fiber Optic Project


M E X I C O

AHMSA: Shareholders Approve Administrative Restructuring


T R I N I D A D   &   T O B A G O

BWIA: Delays Expected In LIAT Merger, Financial Trouble Remains



V E N E Z U E L A

PDVSA: Orimulsion Suspension May Cause US$1.4 Billion Loss


     - - - - - - - - - -


=================================
A N T I G U A   &   B A R B U D A
=================================

LIAT: Government Aid to the Rescue
----------------------------------
To help cash-strapped carrier LIAT maintain its operations,
Trade Minister Kenneth Valley said the government will be
extending a loan package from its regional counterparts that
hold shares in the Antigua-based carrier totaling EC$17 million,
reports The Trinidad Guardian.

"We are going to provide loan funding facilities to the
shareholder governments, not directly to LIAT although the funds
will be for the purpose of LIAT and the loan facility will be in
the amount of EC$17 million," Mr. Valley said.

He made the announcement after revealing that Cabinet has
decided to infuse an additional US$40 million into Trinidad and
Tobago carrier British West Indies Airways (BWIA).



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

ARZEN CORPORATION: Non-Payment of Debt Prompts Bankruptcy Ruling
----------------------------------------------------------------
Judge Herrera of Court No. 3 declared Arzen Corporation SA,
which operates in the fishing industry, "Quiebra," reports La
Nacion. The court decreed the bankruptcy following a petition
filed by Obra Social de Conductores Navales to which the Company
owes US$18,718.60 in unpaid debts.

With the aid of Dr. Gutierrez Huertas, Clerk No. 6, the court
appointed Mr. Fabian Zandperl as receiver, who will authenticate
creditors' claims until June 9, 2004. Creditors must submit
their claims to the receiver before the said date in order to be
eligible for the payments that will be made after the
liquidation of the Company's assets.

CONTACT:  Arzen Corporation SA
          Avenida de Mayo 1370, piso 2

          Fabian Zandperl, Receiver
          Avenida Cordoba 3515, piso 1, "B"


COMERCIAL TUCUMAN: Initiates Reorganization Process
---------------------------------------------------
Judge Ballerini of Court No. 24 authorized Comercial Tucuman SRL
to commence its reorganization process, reports La Nacion. The
Company, which listed assets of US$68,391.71 and liabilities of
US$158,458.48, is entrusted to its receiver, Mr. Isaac Jozpe,
who will verify claims and prepare the necessary reports.

Creditors must present their claims for authentication before
May 26, 2004. The receiver will then prepare the individual
reports on the verification results, and then the general report
after these are processed at court. The deadlines to submit the
official reports are yet to be disclosed.

The informational assembly will be held on December 15, 2004.
This is one of the last parts of the reorganization process.
Dr. Medina, Clerk No. 47, assists the court on the case.

CONTACT:  Comercial Tucuman SRL
          Tucuman 457

          Isaac Jozpe, Receiver
          J. E. Uriburu 1054, 7, "D"


COMUNICACION GRUPO TRES: Seeks Permission to Reorganize
-------------------------------------------------------
Judge Kolliker Frers of Buenos Aires Court No. 16 is now
analyzing whether to grant Comunicacion Grupo Tres SA approval
for its petition to reorganize. La Nacion recalls that the
Company filed a "Concurso Preventivo" petition following
cessation of debt payments on March 9, 2004. Clerk No. 31, Dr.
Ibarzabal, is assisting the court on the Company's case.

CONTACT:  Comunicacion Grupo Tres S.A.
          Suipacha 1380
          Buenos Aires


EDEMSA: Argentine S&P Reaffirms Bonds' Default Rating
-----------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
reaffirmed the default rating assigned to Empresa Distribuidora
de Electricidad de Mendoza S.A.'s corporate bonds, the country's
securities regulator, Comision Nacional Valores (CNV), said.

The 'raD' rating applies to US$150 million worth of bonds
called, "Programa de emision de Obligaciones Negociables
simples." The bonds are classified under "program" and are set
to mature on April 13, 2005.

The rating, which is based on the Company's finances as of
December 31, 2003, is assigned to financial obligations that are
currently in default, the ratings agency said. The rating is
also used when the obligor has filed for bankruptcy or when
interest or principal payments are not made on the due date,
even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace
period.


FRIO Y CALOR: Court Authorizes Reorganiztion
--------------------------------------------
Judge Herrera of Court No. 3 approved a petition for
reorganization filed by Frio y Calor SA, according to a report
by Argentine daily La Nacion. Listing assets of US$1,703,750.79
and liabilities of US$1,175,716.57, the Company's process is now
entrusted to its receiver, Mr. Ruben Sarafian, who will verify
claims and prepare the necessary reports.

Creditors must present their claims for authentication before
June 16, 2004. The receiver will then prepare the individual
reports on the verification results, and then the general report
after these are processed at court. The deadlines for the
submission of these reports are yet to be disclosed.

Dr. Gutierrez Huertas, Clerk No. 6, assists the court on the
case.

CONTACT:  Frio y Calor SA
          Joaquin V. Gonzalez 646, piso 3, "A"

          Ruben Sarafian, Receiver
          Tucuman 1657, piso 4, "A"


GRINGO: Bankruptcy Process Begins By Court Order
------------------------------------------------
Buenos Aires Court No. 17 declared Gringo S.A. "Quiebra,"
reports Infobae. The declaration signals the Company to proceed
with the bankruptcy process, which will close with the
liquidation of its assets. The court, assisted by Clerk No. 33,
appointed Ms. Maria Cristina Moccia as receiver who will
authenticate proofs of claim until June 9, 2004.

Afterwards, the receiver will prepare the individual reports
based on the results of the authentication and then submit these
reports to court on July 12, 2004. After these results are
processed in court, the receiver will then submit the general
report on August 10, 2004.

CONTACT:  Maria Cristina Moccia, Receiver
          Superi 1423
          Buenos Aires


HURD SUDAMERICA: Court Decree Makes Bankruptcy Official
-------------------------------------------------------
Hurd Sudamerica S.A. entered bankruptcy on orders from Buenos
Aires Court No. 6, according to local news source Infobae.
Working with Clerk No. 11, the court assigned Mr. Norberto
Bonesi as receiver. He is to verify creditors' claims until
April 23, 2004.

Creditors who fail to have their claims validated before the
deadline will be disqualified from receiving any payments to be
made from the liquidation of the Company's assets at the end of
the process.

The individual reports, which are due on June 7, 2004, are to be
prepared upon completion of the verification process. The court
also requires the receiver to prepare a general report and file
it on August, 2004.  This report will contain a summary of the
results in the individual reports.

CONTACT:  Hurd Sudamerica S.A.
          Maipu 1252
          Buenos Aires


KIRIOS: Court Issues Bankruptcy Ruling
--------------------------------------
Kirios S.A. will now enter bankruptcy after Buenos Aires Court
No. 11 declared it "Quiebra," reports Infobae. With assistance
from Clerk No. 22, the court named Mr. Miguel Angel Marceesi as
receiver. He will verify creditors' claims until June 2, 2004.

Following claims verification, the receiver will submit the
individual reports, which were prepared based on the
verification results, to court on July 15, 2004. The general
report is due for submission on September 10, 2004.

The Company's bankruptcy case will close with the liquidation of
its assets to pay its creditors

CONTACT:  Miguel Angel Marceesi, Receiver
          Avellaneda 1135
          Buenos Aires


MENLO: Declared Bankrupt by Court
---------------------------------
Menlo S.A. is now "Quiebra" - meaning bankrupt, says Infobae.
Buenos Aires Court No. 26 decreed the Company's bankruptcy. The
court, assisted by Clerk No. 52, is yet to name a receiver who
will oversee the Company's bankruptcy case. Moreover, the court
is yet to set a timetable for the process.

CONTACT:  Menlo S.A.
          Maipu 872
          Buenos Aires


RANDALL: Court OKs Creditor's Bankruptcy Motion
-----------------------------------------------
Randall SA entered bankruptcy after Judge Ottolenghi of Court
No. 4 approved a bankruptcy motion filed by Cooperativa Dielmar
Ltda., reports La Nacion. The Company's failure to pay
US$22,890.00 in debt prompted the creditor to file the petition.

Working with Dr. Anta, Clerk No. 8, the court assigned Mr. Omar
Lares as receiver for the bankruptcy process. The receiver's
duties include the authentication of the Company's debts and the
preparation of the individual and general reports. Creditors are
required to present their proofs of claims to the receiver
before June 4, 2004.

The Company's assets will be liquidated at the end of the
bankruptcy process to repay creditors. Payments will be based on
the results of the verification process.

CONTACT:  Randall SA
          Heredia 353

          Omar Lares
          Viamonte 749, 7, "6"


SANCOR: Argentine S&P Maintains 'raD' Rating on Bonds
-----------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintained an `raD' rating on corporate bonds issued by Sancor
Coop. Unidas Ltda. 'raD', the National Securities Commission -
Argentina, reports.

The default rating applies to the following bonds:

-- US$300 million worth of "Programa de Obligaciones
Negociables", under `program.' Maturity date is April 23, 2006.

-- US$19 million worth of "Serie 2, bajo el Programa de Ons. por
U$S 300 millones", under "Series and/or class". These bonds
matured on January 27, 2004.

-- US$75.8 million worth of "Serie 3, bajo el Programa de Ons.
por U$S 300 millones", also under "series and/or class". These
bonds matured on January 27, 2004.

The rating assigned was based on the Company's financial status
as of December 31, 2003.



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

SABESP: Capital Expenditures Forecast in '04
--------------------------------------------
Dow Jones reports that Brazilian water company Companhia de
Saneamento Basico do Estado de Sao Paulo S.A. (SBSP3.BR), or
Sabesp has plans to raise its 2004 investment from the BRL825
million the company previously announced to BRL883 million,
Helmut Bossert, Investor Relations superintendent said Tuesday.

"We intend to complete some expansion projects which are already
under way and start some priority projects," Mr. Bossert said.

Controlled by Sao Paulo's state government of Sao Paulo, Sabesp
is the largest water and sewage utility company in the Americas
and, in terms of number of customers, the third-largest in the
world. Around 25 million residents rely on water provided by the
company through a 54,000-kilometer network. Sabesp also offers
sewerage service to 16.8 million residents through a network
stretching 34,000 kilometers.


SABESP: Seeks CEF Financing on New Projects
-------------------------------------------
To finance its new projects, BNamericas reports that Brazilian
water company Companhia de Saneamento Basico do Estado de Sao
Paulo S.A. (SBSP3.BR) or Sabesp has sought the assistance of
federal bank Caixa Economica Federal (CEF) to the tune of BRL740
million (US$258 million), said Sabesp investor relations
director Helmut Bossert Tuesday.

Sabesp, the world's largest water utility in terms of number of
customers, expects the CEF to approve the financing this year,
Mr. Bossert said. He added that the company's BRL540 million
loan agreement with the Japan Bank for International Cooperation
(JBIC) for the utility's BRL1 billon Baixada Santista
metropolitan region environmental recovery program is set to be
signed by both parties by the end of April or early May.

The company posted a BRL833 million net profit last year against
a BRL651 million net loss in 2002, helped by a stronger real and
a 19% rate hike in August. For the period, net sales rose 9.1%
to BRL4.11 billion and operating profit closed at BRL1.17
billion, compared to its 2002 BRL935 million operating loss.
Sabesp has been converting its long-term debt into reais from US
dollars to lower its exposure to currency devaluation.



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

AES GENER: Angles for Price Hike In April With Gas Woes
-------------------------------------------------------
The chief executive officer of Chilean generator AES Gener said
CNE, Chile's energy commission should take into account in its
node price revision for April the increased power generation
costs due to Argentina's gas export restrictions, BNamericas
reports.

AES Gener CEO Felipe Ceron Tuesday said, "We think the price
increases should be in April because there are indications that
gas export restrictions will continue." In what Mr. Ceron called
a "preliminary estimate", AES Gener's operating costs could
increase by some US$10 million this year.

The node price, which is the price distributors pay generators
for power, is revised every six months by the CNE, but new
legislation lowered the ceiling of the price band from 10% to 5%
above the average regulated electricity wholesale price.

Chilean President Ricardo Lagos has said that said prices could
increase 2% as a result of the gas export restrictions but that
the CNE will have to decide whether to incorporate the cost
increase in April or October.

Gas restrictions will increase the costs of thermoelectric
generators as they source other fuels or buy power from the spot
market to meet contracts. The company's TermoAndes plant, which
only supplies Chile's northern grid (SING) although it is in
Argentina, has already cut output to 50MW from 239MW after gas
supplies were reduced last week.

In a statement, AES Gener said it is making up for the
production deficit by increasing coal generation at the Nueva
Tocopilla plant owned by its Norgener subsidiary, and through
spot market purchases. It also said that so far, the company's
Nueva Renca plant in Chile's central SIC grid which uses 1.65
million cubic meters of gas a day transported through the
GasAndes pipeline has been unaffected by the restrictions. But
if gas flows are further reduced, the 379MW capacity plant would
have to shut down for 48 hours to convert to diesel, cutting
output to 280MW from 370MW and increasing costs to US$56/MWh
from US$13.4/MWh at present, the statement said.

Mr. Ceron said AES Gener still intends to push through with
future thermoelectric generation projects in Chile, including
its 394MW natural gas-fired combined cycle Laguna Verde plant
and its 740MW Totihue natural gas-fired project. He added that
Chile "will need these projects sooner or later," and natural
gas will still be available in the future once Argentina
resolves its gas crisis.

These projects, according to Mr. Ceron, are being "permanently
revised" by the company.


ENDESA CHILE: Forecasts Stable Pricing Despite Gas Rationing
------------------------------------------------------------
In statement to the Santiago stock market, Chilean Generator
Endesa (NYSE: EOC) said that under normal hydrological
conditions, it does not expect an increase in generation costs
as a result of the rationing of gas exports from Argentina to
Chile, reports BNamericas.

"Under normal hydrological conditions and with the current gas
restrictions, Endesa and its subsidiaries can maintain a surplus
on the spot market, so its economic results will not be
negatively affected," the statement said.

The statement, however, said that Endesa's financial results
would be affected if there is a combination of a "severe
drought" in Chile and greater restrictions on gas exports from
Argentina, though such a drought is considered unlikely.

The statement also said that Endesa is studying its contracts
with Argentina and considering possible legal action to seek
compensation for possible price increases as a result of the gas
export restrictions.

Endesa has two plants in Chile's central grid (SIC) that depend
on gas supplies from Argentina, Taltal (240MW) and San Isidro
(370MW). San Isidro is equipped to use diesel in the event of
gas supply interruptions but Taltal is not.

Normally, Taltal uses 1.8 million cubic meters a day (mcm/d) of
gas but has been cut in half because in Endesa's 2000 contract
with gas producer YPF, only 900,000cm/d is considered firm
supply and the rest is interruptible. The statement said that in
the event Argentina cuts 100% of Taltal's gas supplies, Endesa's
total generation capacity in Chile would only drop by 7%.

To reinforce the company's capacity for hydroelectric
generation, Endesa is planning to bring its 570MW Ralco
hydroelectric plant online by June or July.



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

AVIANCA: Debt-Restructuring Plan Filing Allowed More Time
---------------------------------------------------------
A New York bankruptcy court on Wednesday extended Colombian
airline Aerovias Nacionales de Colombia S.A., or Avianca, a new
extension on the term to present a debt-restructuring plan
according to U.S. Chapter 11 proceedings and get backing from
its creditors. It will have time until April 30.

Companies that are under Chapter 11 protection must make an
offer to repay their debts to creditors. The exclusivity terms
prevent other parties from presenting alternative plans,
enabling the debtor to keep control of its debt-restructuring
proceeding.

Through Avianca Inc., its U.S. affiliate, Avianca filed for
protection from its creditors on March 21, 2003, after rising
fuel and insurance costs deepened its losses. The Company has
over US$222 million in debts.

Valores Bavaria SA, a holding company, has a 50% stake in
Avianca and the National Federation of Colombian Coffee Growers
owns the other 50%.



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

PACIFICTEL: Expected '04 Revenues To Fall Short Of Costs
--------------------------------------------------------
Quoting local press reports, BNamericas says that the management
team of Ecuador's state telecoms firm Pacifictel expects some
US$330 million in revenues this year, about US$100 million short
of covering its costs.

"Now I have to decide what I pay and what I don't pay this
year," Pacifictel chairman and interim president Alberto Prez-
Llona was quoted as saying. "This has come about because of all
the contracts signed by previous administrations and which were
not included in the budget," he said.

The company has cancelled contracts with three suppliers, Alona,
Oasis and Nedetel, all of which have run into problems. The
largest was with Oasis, which was investing US$100 million to
install equipment and phone lines.


PACIFICTEL: Regulator Orders Intervention Over Service Concerns
---------------------------------------------------------------
For the failure of state telecoms firm Pacifictel to meet
quality of service standards from 2002, Ecuador's telecoms
regulator Suptel said in a statement Tuesday that it has ordered
the intervention of the Guayaquil-based company, says
BNamericas.

Originally, Suptel had already issued the intervention order in
May 2002. However, the regulator suspended the measure upon the
request of the national telecommunications council, Conatel, for
a secondary report from the national telecommunications
department, which was presented in February 2004.

Suptel's decision, based on claims that an average of 30% of
lines installed were not operating in any given month during
2002, has been forwarded to Conatel, which will select a firm to
manage the intervention.


PACIFICTEL: Corruption Probe Shelves Fiber Optic Project
--------------------------------------------------------
The board of directors of Ecuadoran state telecoms firm
Pacifictel has suspended work on a fiber optic link between
Guayaquil and Huaquilllas to investigate corruption allegations
in the company, BNamericas reports. Swamped in recent months by
allegations of corruption, Pacifictel will now focus on
investigating allegations related to the contract awarded by the
company to China's ZTE Corporation.

The ZTE contract was allegedly subcontracted without proper
authorization to Impresicorp, a consortium of Colombian and
Ecuadorian firms. With the subcontract, ZTE's share fell to
US$15.2 million while Impresicorp took US$8.9 million. The
original contract was reported to be worth US$23.5 million



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

AHMSA: Shareholders Approve Administrative Restructuring
--------------------------------------------------------
Mexican steelmaker AHMSA (Altos Hornos de Mxico) has told the
Mexico City stock exchange that its voting shareholders have
given offially approved plans of replacing chief executive
officer Alonso Ancira with former head of steelmaker LTV Corp.
William Bricker, BNamericas reports.

AHMSA characterized Bricker's appointment as "an example of
shareholder intent to create a technical and professional
administration."

The shareholders of Mexico's second-largest steelmaker also
accepted the resignations of Mr. Ancira as executive president
and board president Xavier Autrey Maza. Mr. Ancira was appointed
as the new president of the company while Mr. Maza was named as
its new vice president.

Creditors such as Citibank-Banamex and BBVA-Bancomer have tried
to oust Ancira and Autrey in the past, saying both have no
intention of reaching an agreement on roughly US$1.9 billion in
defaulted payments.

The company said that the meeting attendees, representing 63% of
voting shareholders, also approved AHMSA's contract with
financial intermediary Vector Casa de Bolsa. The Vector
contract, AHMSA said, "reaffirms the company's willingness to
arrive at a definitive solution to its financial situation, by
way of constructive negotiations designed to bring a quick end
to the suspension of payments."



=================================
T R I N I D A D   &   T O B A G O
=================================

BWIA: Delays Expected In LIAT Merger, Financial Trouble Remains
---------------------------------------------------------------
Trade Minister Kenneth Valley said Tuesday that the proposed
merger between Trinidad and Tobago carrier British West Indies
Airways (BWIA) and Antigua-based LIAT, meant to form a regional
airline, is likely to be delayed, reports The Trinidad Guardian.

"The first operational date was supposed to be January 1, 2004,
but because of our own concern with fixing BWIA, that deadline
was not met. The current deadline is July 1. The shareholder
Governments have asked the Government of T&T to assist in
helping LIAT to July when hopefully there would be that
formation" Valley said.

"But I shouldn't say hopefully because I do not really see our
making that deadline at this time. Shortly thereafter if our
consultants believe that is the thing to do we will move towards
the regional airline."

SH&E International Air Transport Consultancy, the international
firm now reviewing BWIA, is expected to present its findings in
the next two months.

The proposal for the formation of a regional airline was brought
up during 15th Inter-sessional meeting of the Caricom Heads of
Government held on March in St. Kitts.



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

PDVSA: Orimulsion Suspension May Cause US$1.4 Billion Loss
----------------------------------------------------------
With state-run oil company Petroleos de Venezuela SA's decision
to suspend investments in the Orimulsion production of its
subsidiary Bitor (Bitumines del Orinoco) as part of its
restructuring, market observers say the suspension could mean an
estimated US$1.4 billion loss for the Venezuelan Treasury, the
El Nacional newspaper reports.

Despite being considered a side business for the PDVSA,
Orimulsion had been generating a US$200 million turnover for
PDVSA. In 2002, the cheap water and bitumen mix generated
profits of US$60 million out of US$200 million in sales from
exports alone.

However, the Venezuelan state oil company has claimed that the
production of Orimulsion bitumen represents a daily loss of US$2
per barrel, worth US$250,000.


                            ***********


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

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