TCRLA_Public/040526.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, May 26, 2004, Vol. 5, Issue 103

                            Headlines

A R G E N T I N A

AIRFE SERVICE: Judge Approves Creditor's Bankruptcy Plea
ALEARSA: Debt Default Causes Bankruptcy
CERAMICA GENERAL: Enters Bankruptcy on Court Orders
GALA ROSA: Defaults on Debt, Seeks Reorganization
GONZALEZ HNOS: Beginning Liquidation

IMPORTADORA CAMFER: Verification Deadline Set
INDUSTRIAS BRAGADO: Faces Liquidation on Court Orders
INDUSTRIAS METALURGICAS: Court Issues Bankruptcy Ruling
IRSA: Noteholders Continue to Exercise Conversion Right
JOCKEY CLUB: Bankruptcy Process Begins By Court Order

MASTELLONE HERMANOS: S&P Keeps Junk Ratings on $225M of Bonds
SERRA HNOS: Gets Court Ok for Reorganization
SIDECO AMERICANA: APE Gets Preliminary Court Approval
THE COTTON GROUP: Court Authorizes Reorganization
TRANSPORTES EL ALBA: Liquidates Assets to Pay Debts

* Argentina May Improve Debt Offer-Report


B R A Z I L

ACESITA: Not Renewing CST Shareholders Deal
AMBEV: Further Definitions Achieved Regarding Interbrew Deal
VARIG: Brazil to Ask for End to TAM-Varig Code-Sharing-Report
VARIG: Inks Joint Venture With Air China


C H I L E

AES GENER: Mulling Several Measures to Combat Gas Shortage
INVERLINK: Former Accountant Ordered Jailed


C O L O M B I A

METRO DE MEDELLIN: Government Sees Debt Solution
METRO DE MEDELLIN: To Offer Concession for Fiber-Optic Network


C O S T A   R I C A

ICE: Grants Public Phone Contract to Celsa-Centrocel


E C U A D O R

PETROECUADOR: Chinese Rig Helps Up Output


T R I N I D A D   &   T O B A G O

CDC: Locks Striking Workers Out


U R U G U A Y

COFAC: Fitch Downgrades L-T FC Rating to 'CCC' from 'CCC+'
PARMALAT ARGENTINA/URUGUAY: Seven Investors Express Interest

     -  -  -  -  -  -  -  -

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

AIRFE SERVICE: Judge Approves Creditor's Bankruptcy Plea
--------------------------------------------------------
Jose Cano Rodriguez successfully sought the liquidation of Airfe
Service S.R.L. after Judge Ferrrario of Buenos Aires Court No. 6
issued a bankruptcy ruling against the Company. La Nacion states
that Mr. Rodriguez filed the involuntary bankruptcy petition
after the transport company failed to pay US$12,409.32 in debts.

Mr. Luis Benedossi will serve as trustee during the duration of
the bankruptcy. He will review creditors proofs of claims until
August 12, 2004. Dr. Sicoli, Clerk No. 11, assists the court on
this case.

CONTACT: Airfe Service S.R.L.
         Iriarte 3375
         Buenos Aires

         Mr. Luis Benedossi, Trustee
         Bernardo de Irigoyen
         Buenos Aires


ALEARSA: Debt Default Causes Bankruptcy
---------------------------------------
Judge Ballerini of Buenos Aires Court No. 24 has ordered the
liquidation of Alearsa S.A. following the Company's failure to
pay its liabilities to Mr. Diego Lombardero.

Infobae relates that the court appointed Mr. Antonio Canada as
trustee for the case. The trustee will review creditors' proofs
of claim until August 9, 2004. Dr. Mata, Clerk No. 47, assists
the court on this case.

CONTACT: Alearsa S.A.
         Maipu 267
         Buenos Aires

         Mr. Antonio Canada, Trustee
         Dr. Luis Belaustequi 4531
         Buenos Aires


CERAMICA GENERAL: Enters Bankruptcy on Court Orders
---------------------------------------------------
Buenos Aires Court No. 2 declared Ceramica General Rodriguez
S.A. bankrupt after the Company defaulted on its debt payments.
The bankruptcy order effectively places the Company's affairs as
well as its assets under the control of court-appointed Trustee,
Mr. Mario Norberto Aragon.

As Trustee, Mr. Aragon is tasked with verifying the authenticity
of claims presented by the Company's creditors. The verification
phase is ongoing until June 12, 2004.

Following claims verification, the trustee will submit the
individual reports based on the forwarded claims for final
approval by the court on September 6, 2004. A general report
will also be submitted on October 19, 2004.

Infobae reports that Clerk No. 3 assists the court on this case,
which will end with the disposal of the company's assets in
favor of its creditors.

CONTACT:  Ceramica General Rodriguez S.A.
          Peron 1642
          Buenos Aires
         
          Mr. Mario Norberto Aragon, Trustee
          Adolfo Alsina 1535
          Buenos Aires


GALA ROSA: Defaults on Debt, Seeks Reorganization
-------------------------------------------------
Gala Rose S.R.L., a supplier of oil and other combustible
materials, lodged a petition with Buenos Aires Court No. 20
seeking for a reorganization after the Company defaulted on its
debt payments since April.

The reorganization petition, once approved by the court, will
prevent the Company's liquidation by allowing it to formulate a
settlement plan with its creditors.

Argentine daily La Nacion reports that Clerk No. 40 assists the
court on this case.

CONTACT: Gala Rose S.R.L.
         Maipu 763
         Buenos Aires


GONZALEZ HNOS: Beginning Liquidation
------------------------------------
Gonzalez Hnos S.R.L. of Buenos Aires will begin liquidating its
assets since the city's Court No. 16 declared the Company
bankrupt. Infobae revealed the bankruptcy process will commence
under the supervision of court-appointed trustee, Mr. Jose
Miras.

The trustee will review claims forwarded by the Company's
creditors until August 6, 2004. After claims verification, Mr.
Miras will submit the individual reports for court approval on
September 21, 2004. The general report will follow on November
4, 2004. Clerk No. 32 assists the court on this case.

CONTACT: Gonzalez Hnos S.R.L.
         Piedras 1841
         Buenos Aires

         Mr. Jose Miras, Trustee
         Paraguay 1307
         Buenos Aires


IMPORTADORA CAMFER: Verification Deadline Set
---------------------------------------------
Infobae reports that Ms. Raquel Poliak, the Trustee overseeing
the liquidation of Importadora Camfer S.A., will be reviewing
creditors' proofs of claim until July 14, 2004. Buenos Aires
Court No. 7 handles this particular case with assistance from
Clerk No. 13.

CONTACT: Ms. Raquel Poliak, Trustee
         Lavalle 1527
         Buenos Aires


INDUSTRIAS BRAGADO: Faces Liquidation on Court Orders
-----------------------------------------------------
Judge Garibotto of Buenos Aires Court No. 2 declared Industrias
Bragado S.R.L. bankrupt, says La Nacion. The ruling comes in
approval of the bankruptcy petition filed by the Company's
creditor, Stawila S.A., for nonpayment of US$2,293 in debt.
Clerk No. 4, Dr. Romero, assists the court on the case, which
will conclude with the liquidation of the mining company's
assets.

The court-appointed trustee for the liquidation, Mr. Daniel
Altman, will examine and authenticate creditors' claims until
July 15, 2004. This is done to determine the nature and amount
of the Company's debts. Creditors must have their claims
authenticated by the trustee before the said date in order to
qualify for the payments that will be made after the Company's
assets are liquidated.

CONTACT:  Industrias Bragado S.R.L.
          Parana 275
          Buenos Aires

          Mr. Daniel Altman, Trustee
          Parana 774
          Buenos Aires


INDUSTRIAS METALURGICAS: Court Issues Bankruptcy Ruling
-------------------------------------------------------
Industrias Metalurgicas Guido SA will undergo bankruptcy after
Judge Ballerini of Buenos Aires Court No. 24 approved the
petition filed by Banco Finansur S.A.

La Nacion states that Ms. Haydee Kravetz will serve as trustee
during the liquidation. She will be accepting creditors' claims
for verification until July 16, 2004. Dr. Medina, Clerk No. 47,
assists the court on this case, which will end with the sale of
the company's assets to repay its debts.

CONTACT: Industrias Metalurgicas Guido S.A.
         Agustin Magaldi 1714
         Buenos Aires

         Ms. Haydee Kravetz, Trustee
         Tucuman 1484
         Buenos Aires
           

IRSA: Noteholders Continue to Exercise Conversion Right
-------------------------------------------------------
By letter dated May 20, 2004, IRSA Inversiones Y
Representaciones Sociedad Anonima reported that Cresud
S.A.C.I.F. y A., its principal shareholder, has exercised its
conversion right on 5,000,000 convertible notes in ordinary
shares with an interest rate of 8% annually with maturity in
2007.

Cresud communicated that "it has finalized the conversion
proceeding of 5.0 million convertible notes (of face value
VS$1.00 each) of IRSA for 9,174,311 ordinary shares, increasing
it participation from 22.4% to 25.3%. Cresud has decided to
convert this amount as part of a long term strategy, in order to
revert the reduction of participation produced by the
conversions and exercises of options occurred during last year".

Hence, the financial indebtedness of the Company shall be
reduced in US$5,000,000 and an increase of 9,174,311 ordinary
shares face value pesos 1 (V$N 1) each was made.

The conversion was performed according to the terms and
conditions established in the prospectus of issuance at the
conversion rate of 1.83486 shares, face value 1 pesos per
Convertible Note of face value US$1.

As a result of that conversion, the amount of shares of the
Company goes from 238,527,766 to 247,702,077. On the other hand,
the amount of registered Convertible Notes is US$87,357,920.

CONTACT:  Alejandro Elsztain -- Director
          Tel: +011-(5411)-4344-4636
          E-mail: finanzas@irsa.com.ar
          Web site: http://www.irsa.com.ar


JOCKEY CLUB: Bankruptcy Process Begins By Court Order
-----------------------------------------------------
Mar del Plata Court No. 2 declared Jockey Club Mar del Plata
"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. 4, appointed Ms. Adriana Mabel
Sereno as trustee. She will authenticate proofs of claim until
July 8, 2004. Afterwards, Ms. Sereno will prepare the individual
reports based on the results of the authentication and then
submit these reports to court on September 3, 2004. After these
results are processed in court, the trustee will then submit the
general report on October 19, 2004.

CONTACT: Jockey Club Mar del Plata
         Salta 2269
         Mar del Plata

         Ms. Adriana Mabel Sereno, Trustee
         Mariani 4780
         Mar del Plata


MASTELLONE HERMANOS: S&P Keeps Junk Ratings on $225M of Bonds
-------------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
is maintaining an `raD' rating on US$225 million worth of
corporate bonds issued by Mastellone Hermanos S.A., says the
Comision Nacion de Valores (CNV), Argentina's securities
regulator.

The action was taken based on the Company's finances as of March
31 this year.

The affected bonds were issued under `Simple Issue' and were
described as "Obligaciones Negociables, autorizadas por AGE de
fecha 28.8.97." These bonds will mature on April 1, 2008.

S&P said that an obligation is rated `raD' when it is in payment
default, or the obligor has filed for bankruptcy. The rating is
used when interest or principal payments are not made on the due
date, even if the applicable grace period has not expired,
unless Standard & Poor's believes that such payments will be
made during such grace period.

The Company, which ceased debt payments since early 2002, is
currently seeking to restructure payment terms on US$104.1
million in commercial bank debt and US$225 million in defaulted
bonds. The Company's debt offer, which was launched March 5,
will expire on May 21.

CONTACT:  Mr. Pascual Mastellone, President
          MASTELLONE HERMANOS S.A.
          Av. Leandro N. Alem 720
          (1001) - Buenos Aires
          Argentina
          Phone: 54 1 318-5000
          Fax: 54 1 313-6822


SERRA HNOS: Gets Court Ok for Reorganization
--------------------------------------------
Serra Hnos S.R.L. will begin reorganization following the
approval of its petition by Buenos Aires Court No. 1. The
opening of the reorganization will allow the Company to
negotiate a settlement with its creditors in order to avoid a
straight liquidation.

Infobae states that Mr. Ruben H. Faure will oversee the
reorganization proceedings as the court-appointed Trustee. He
will verify creditors' claims until July 12, 2004. The validated
claims will be presented in court as individual reports on
September 8, 2004.

The Trustee is also required by the court to submit a general
report essentially auditing the company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. This report will be presented
in court on October 20, 2004.

The Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the company's
creditors for approval, is scheduled on April 20, 2005.

CONTACT: Serra Hnos S.R.L.
         Lidanseo de la Torre 2213
         Buenos Aires

         Mr. Ruben H Faure, Trustee
         Avenida Rivadavia 1227
         Buenos Aires


SIDECO AMERICANA: APE Gets Preliminary Court Approval
-----------------------------------------------------
Argentine holding company Sideco Americana obtained the court's
preliminary approval for the debt restructuring accord reached
with its creditors. The out-of-court agreement, APE, through
which the Company will restructure US$125 million in debt,
should be formally approved by June.

As local bankruptcy legislation rules, Buenos Aires Commercial
Court No. 18, with assistance from Clerk No. 36, ordered to make
the process public through press media and established a 10-day
term for the submission of objections to the APE.

If no objections are made during this term or the court rejects
those that are submitted, the APE will have final approval and
Sideco will start carrying out its repayment plan.

Sideco is offering to repurchase debt for cash at 35% of face
value, a 5-year par guaranteed bond in which the company keeps
the right to repurchase it for 40% of its value during the first
year or 45% in the second year, and a 10-year par bond with a
US$15 million subscription limit.

Ninety-two point nine percent of the creditors chose the cash
option, while the guaranteed bond was selected by 4.9% of
creditors and the other gained just 2.2% of acceptance. Since
the cash option has a limit, the remnant will be prorated
between the other two alternatives.


THE COTTON GROUP: Court Authorizes Reorganization
-------------------------------------------------
Buenos Aires Court No. 8 authorized The Cotton Group S.R.L. to
start its reorganization process. According to Infobae, the
court, assisted by Clerk No. 15, appointed Mr. Norberto Jose
Perrone as Trustee.

Creditors have until July 2, 2004 to submit their proofs of
claim to the trustee, who will verify these claims and submit
them in court as individual reports on August 31, 2004. After
these reports are processed in court, the trustee will then
prepare the general report and submit it on October 13, 2004.

CONTACT: Mr. Norberto Jose Perrone, Trustee
         Constitucion 2894
         Buenos Aires


TRANSPORTES EL ALBA: Liquidates Assets to Pay Debts
---------------------------------------------------
Transportes El Alba S.A.C.I. will now enter bankruptcy after
Buenos Aires Court No. 14 declared it "Quiebra," reports
Infobae. With assistance from Clerk No. 27, the court named Ms.
Silvia Beatriz Cusel as receiver. She will verify creditors'
claims until August 12, 2004.

Following claims verification, the receiver will submit the
individual reports, which were prepared based on the
verification results, to the court on September 24, 2004. The
general report is due for submission on November 8, 2004.

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

CONTACT: Ms. Silvia Beatriz Cusel, Trustee
         Manuel Ricardo Trelles 2350
         Buenos Aires


* Argentina May Improve Debt Offer-Report
-----------------------------------------
Argentina's final offer to restructure US$99.4 billion in
defaulted bonds may yet include the payment of past-due interest
and a cash payment linked to economic growth, Bloomberg reports,
citing local news daily Infobae.

The reported additions would be an improvement over its original
proposal to repay bondholders only US$250 per each US$1,000 in
defaulted bonds. The original offer, which was announced last
year, has become the subject of lawsuits from disgruntled
bondholders, who claim that Argentina is capable of paying more
than it proposed.

The final offer, a draft of which was handed to Argentine
President Nestor Kirchner last week, will be unveiled when it
receives bondholders in Buenos Aires next month.



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

ACESITA: Not Renewing CST Shareholders Deal
-------------------------------------------
In a statement to the Sao Paulo stock exchange, Brazilian
stainless steelmaker Acesita (Bovespa: ACES4) said that it is
not renewing the shareholders accord that defines control of
local flat steelmaker CST, according to BNamericas.

An Acesita spokesperson said that when the accord expires in May
next year, the company "will be able to sell its shares in CST
without having to make an initial offer to other shareholders in
the group of control." Acesita is planning to use the funds from
the sale of its stake in CST to reduce its debt.

Acesita holds 29.6% of CST's voting capital, resulting to 11.4%
of the flat steel maker's total capital. According to one
analyst, Acesita's CST shares are estimated to be worth US$600
million.

In April last year, European steel giant Arcelor and Rio de
Janeiro-based mining company CVRD acquired 14% of Acesita's
stake in CST for US$162 million. The Acesita spokesperson said
that sale has a clause which gives Arcelor and CVRD the option
to purchase Acesita's remaining CST stakes.


AMBEV: Further Definitions Achieved Regarding Interbrew Deal
------------------------------------------------------------
Companhia de Bebidas das Americas - AmBev ("AmBev")
(BOVESPA:AMBV3) (BOVESPA:AMBV4) and (NYSE:ABV) (NYSE:ABVc)
announced Monday that further definitions have been achieved
regarding the proposed combination between AmBev and Interbrew
SA ("Interbrew") disclosed on March 3, 2004 (the "Operation").

Interbrew and Fomento Economico Mexicano SA de CV ("FEMSA")
achieved an agreement in order to unwind their U.S. and Mexican
joint ventures and terminate the existing commercial
arrangements between FEMSA and the parties' U.S. distribution
joint venture.

Labatt Brewing Company Limited ("Labatt"), a wholly owned
subsidiary of Interbrew, will sell to FEMSA its 30% interest in
Femsa Cerveza SA de CV ("Femsa Cerveza"), a subsidiary of FEMSA,
for US$1.245 billion in cash. Concurrently, Labatt's U.S.
subsidiary, Labatt USA L.L.C. ("LUSA") will assign the U.S.
distribution rights for Femsa Cerveza brands to Wisdom Import
Sales Company L.L.C. ("Wisdom"), a wholly owned subsidiary of
Femsa Cerveza, in exchange for the redemption of Wisdom's
indirect 30% interest in LUSA, which shall be transferred to
Interbrew before the closing of the planned Operation.

In addition, FEMSA and its affiliates have agreed to withdraw
their lawsuit filed against Interbrew and certain of its
affiliates on March 12, 2004, in U.S. federal court, which
sought a preliminary injunction of certain aspects of the
Operation, and has committed not to bring any litigation, make
any regulatory filing, or otherwise oppose the combination.

The agreements relating to the Operation contemplated
alternative structures to address the outcome of any
negotiations that might take place between Interbrew and FEMSA
with respect to Labatt's interest in Femsa Cerveza and LUSA,
including the case in which such interests would not be included
in the assets of Labatt at the time of the merge of Labatt into
AmBev.

Accordingly, as provided in the transaction documents and as
contemplated in the existing investment bank appraisals that
were commissioned by AmBev, AmBev will now issue to Interbrew,
in relation to the acquisition of Labatt, approximately 7.9
billion (instead of 9.5 billion) voting shares and approximately
11.4 billion (instead of 13.8 billion) preferred shares.
Moreover, other financial arrangements, including the issuance
of promissory notes, originally contemplated in the transaction
documents in anticipation of the various possible outcomes of
the negotiations with FEMSA regarding Femsa Cerveza and LUSA,
will no longer be applicable.

Given the reduction in the number of shares to be issued by
AmBev, Interbrew now is expected to hold an 83.9% voting
interest in AmBev (instead of 84.9%) and a 54.4% economic
interest (instead of 57.5%), assuming full acceptance of the
mandatory tender offer for all publicly-held AmBev voting shares
that will be launched by Interbrew following the closing.

Commenting on the announcement of the unwind transactions,
AmBev's CEO Carlos Brito said that "We are also pleased with the
outcome of this negotiation and with the withdrawal of the
lawsuit in the United States, which was regarded in some circles
in Brazil as casting doubt on the outcome of the InterbrewAmbev
transaction. Moreover, this settlement in no way changes AmBev's
essential strategy and focus on the markets of the Americas,
including Mexico."

AmBev continues to work towards satisfying the conditions that
must be met in order to consummate the Operation. The first of
the two AmBev shareholders' meetings to be held in connection
with the merger of Labatt into AmBev took place on May 18, 2004.
At that meeting, several matters relating to the merger of
Labatt into AmBev were approved by more than 80% of the voting
shares. Dissenting votes accounted for only 0.64%, the majority
of which, AmBev believes, were based on issues that are no
longer relevant as a result of the transactions announced Monday
by Interbrew and FEMSA. Next steps include the preparation of
the definitive appraisal reports required under Brazilian law,
as well as the convening of the second and final AmBev
shareholders' meeting to approve all aspects of the merger of
Labatt into AmBev.

CONTACTS:  AMBEV
           Investor Relations:
           Pedro Ferraz Aidar
           Tel: 5511-2122-1415
           E-mail: acpaidar@ambev.com.br
                      or
           Fernando Vichi
           Tel: 5511-2122-1414
           E-mail: acfgv@ambev.com.br
                      
           URL: www.ambev-ir.com

  
VARIG: Brazil to Ask for End to TAM-Varig Code-Sharing-Report
-------------------------------------------------------------
The code-sharing between Brazilian airlines Varig and TAM may be
in jeopardy as Brazil's Justice Ministry is set to request the
country's antitrust regulator to put a stop to the agreement,
says Bloomberg, citing a report by local business daily Valor
Economico.

According to the Valor report, the ministry's antitrust division
stated in a 40-page report due for release Monday there were
"strong indications" that a cartel has been created by the
Varig-Tam code-sharing, which allows the airlines to offer their
customers a wider range of destinations without incurring the
cost of operating flights. The paper also suggested that
Brazil's two biggest airlines should be charging lower fares for
their shared routes.


VARIG: Inks Joint Venture With Air China
----------------------------------------
At a ceremony in China Monday, Brazilian carrier Varig SA
(VAGV4.BR) and Air China have signed a deal for a joint venture
setting up a route that will take passengers to Beijing from
Brazil via Europe, reports Dow Jones.

Varig, Brazil's second-largest airline, believes that about
200,000 people will travel the Brazil-China route yearly. The
route is expected to begin by August.

The agreement was signed during the visit of a Brazilian trade
mission that met with top Chinese officials for talks that would
deepen the two nations' commercial ties. At present, China is
Brazil's 3rd largest trade partner after the U.S. and Argentina,
but Brazilian officials hope it will jump to the No. 2 spot this
year.



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

AES GENER: Mulling Several Measures to Combat Gas Shortage
----------------------------------------------------------
An executive of Chilean power generator AES Gener is looking at
several measures that could possibly help the country emerge
from its energy sector woes imposed by restrictions of Argentine
natural gas, reports Business News Americas.

Among the measures that AES CEO Felipe Ceron has enumerated are
coal-fired generation, long-term power purchase agreements
(PPAs) and regulatory changes.  

COAL GENERATION

According to Ceron, AES Gener is planning on a new coal-fired
project and is mulling a number of coastal sites for this new
project.

"We see more possibilities for the generation of energy with
coal. We are analyzing it. While it's more expensive than energy
generation with gas, it's not subject to the same supply
concerns. Coal is the most abundant combustible in the world."

PPAs

The uncertainty over gas availability and its eventual price
makes financing thermoelectric projects more difficult and PPAs
could fill that financing gap.

"The possibility of long term contracts would be interesting for
the development of projects in the medium term in
thermoelectricity at least, and in the long-term for
hydroelectric [projects] too," Ceron said.

REGULATORY CHANGES

"There are many regulated and unregulated clients whose
contracts have expired or will do so in the next two or three
years, and they are going to require supplies...it's something
we are studying," he said.

In the long term, the power usage requirement to qualify as an
unregulated power client could be lowered to give clients more
flexibility in contracting their power supplies, he added.


INVERLINK: Former Accountant Ordered Jailed
-------------------------------------------
A former accountant of collapsed financial services group
Inverlink has been ordered detained by a Chilean judge on
charges stemming from the theft of US$95 million in certificates
of deposit from state industry development agency Corfo,
BNamericas reveals, citing local press reports.

As the former accountant at Inverlink's stock brokerage unit
Inverlink Corredores de Bolsa, Jorge Martinez Nunez is regarded
as one of the "brains" behind the theft, which greatly
contributed to Inverlink's collapse last year. Corfo had said
earlier that the theft, as well as fraud at the country's
central bank, could only have been made possible by the
participation and/or collaboration of Inverlink officials and
agents from the local stock exchange.

Inverlink's subsidiaries operated in the areas of healthcare,
pension fund management, life insurance, and equity trading.



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

METRO DE MEDELLIN: Government Sees Debt Solution
------------------------------------------------
An accord has been signed by Colombia's government, Antioquia
department, Medellin municipality and Metro de Medellin to help
solve the mass transit company's debt problem.

Business News Americas recalls that the metro company owes the
nation US$1.26 billion corresponding to the amount Bogota has
paid the Company's creditors to date. Accordingly, the debt has
been converted into a peso loan at the closing exchange rate on
May 21, 2004 - COP3.46 trillion - at a 5% annual interest rate,
to be repaid in 83 years.

Debt payment will be made via a 10% surcharge on gasoline in the
municipality and a 40% tax on cigarettes and tobacco sales in
the department.


METRO DE MEDELLIN: To Offer Concession for Fiber-Optic Network
--------------------------------------------------------------
With Metro de Medellin using only 35% of its fiber-optic
network's capacity, the Colombian mass transit company has
decided to offer a 10-year concession to operate the remaining
65%, relates Business News Americas, citing a report by local
news source Economia en Red.

According to Maria Restrepo, director of planning at Metro de
Medellin, interested parties are given until May 28 to express
interest or comment on the pre-bidding rules. By June, bidding
rules will be issued ahead of the actual bidding process in the
middle of the month, she said. Winning bidders are required to
pay an up-front fee at the beginning of the concession and a
monthly fee of COP50 million a month.

Metro de Medellin's 32-kilometer fiber-optic network connects
the municipalities of Bello, Medellin, Envigado, Itagui and
Sabaneta and serves 2.8 million people in Valle de Aburra.



===================
C O S T A   R I C A
===================

ICE: Grants Public Phone Contract to Celsa-Centrocel
----------------------------------------------------
A US$9.7 million contract for the installation of 8,000 public
phones has been awarded to the Celsa-Centrocel consortium by
Costa Rican electrical and telecoms agency ICE, relates
BNamericas, citing local daily El Financiero.

The contract, which includes 6,000 voice phones using cards and
coins, and 2,000 phones with e-mail and text messaging services,
was immediately challenged by four other bidders, who argued
that Celsa-Centrocel's phones are below manufacturer standards
for public phones. Function International, Telegestion
International, Urmet Telecommunicaciones and Germany's Siemens
also complained that no technical representatives from each
company were present during the process.

Celsa-Centrocel, which priced its contract US$3.7 million higher
than the lowest bidder, denied the accusations, calling them
"misinformation".



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

PETROECUADOR: Chinese Rig Helps Up Output
-----------------------------------------
Citing "good results" from drilling operations by a rig provided
by Chinese firm Sinopec, Ecuadorian state oil company
Petroecuador said in a statement it has raised its production to
198,200 barrels on May 21, BNamericas reveals.

Petroecuador president Luis Camacho Barrios also credited in the
statement the reconditioning of wells in the Amazon region for
the increased output. "This is a joint effort between the
authorities and Petroecuador workers in the Amazon region to
achieve the objectives the country needs: to increase oil
production and obtain higher income for the sales of
hydrocarbons in international markets, given the high prices,"
he said.

In addition to the Sinopec rig, Petroecuador also confirmed that
a new rig designed to drill 10 wells in the Shushufindi oil
field will be provided by the company Hartrade, and is due to
arrive in the first week of June. Petroecuador had planned to
receive bids on May 17 for two more one-year, US$14 million
integrated drilling services contracts to help the company
attain its production goal of 205,000 barrels a day by December
2004.



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

CDC: Locks Striking Workers Out
-------------------------------
More than 800 workers of Trinidad and Tobago brewer Caribbean
Development Co. (CDC) were locked out Monday as they went on
strike, bringing production in its Champs Fleurs plant to a
halt, The Trinidad Guardian relates.

In a statement, CDC said it locked the workers out for the
protection of its workers and plant. Only contract
administrative workers remained in the compound.

The industrial action stemmed from demands for a wage hike and
monthly pensions. During negotiations, the company had offered
the workers a 12% increase in their wages, but they have turned
down the offer. According to Robert Giuseppi, president general
of the National Union of Government and Federated Workers
(NUGFW), the brewery workers wanted wages comparable with those
in other manufacturing plants like Nestle, Lever Brothers and
WASA.



=============
U R U G U A Y
=============

COFAC: Fitch Downgrades L-T FC Rating to 'CCC' from 'CCC+'
----------------------------------------------------------
Fitch Ratings downgraded Cooperativa Nacional de Ahorro y
Credito's (COFAC) international long-term foreign currency
rating to 'CCC' from 'CCC+'. A Stable Rating Outlook has been
assigned. COFAC's Support Rating has been affirmed at '5'.

The downgrade reflects further deterioration in the bank's
solvency and liquidity indicators since 2002. Efforts made to
increase capital base during 2003, through the issuance of
preferred shares (US$4 million) and subordinated notes (US$1
million), was offset by significant losses and additional
sources of capital are limited. As a result, COFAC was not in
compliance with minimum capital requirements at end-2003, which
will likely persist until end-2004 according to management
forecasts. The assigned ratings also take into account COFAC's
position as the largest credit cooperative in Uruguay with a
deposit market share of 2.7%.

Reported losses as of end-2003 (USD 7 million) were mainly
attributable to significantly lower net interest income since
the crisis and the lack of credit demand given the continued
difficult economic conditions in 2003. Asset quality continued
to deteriorate in 2003, with non-performing loans reaching 39.6%
of total loans, while reserve coverage remained low, further
pressuring already weak capital levels.

The main source of funding continues to be deposits, which
represented 83% of liabilities at end-2003. Although liquidity
is still weak, it improved when compared with the previous year.
Liquid assets represent 24.1% of deposits and short term funds.
During the crisis COFAC required lines from the Uruguayan
Central (BCU), which has since been cancelled. As of end-2003,
COFAC reported total assets and equity of $306.6 million and
$3.6 million, respectively.

CONTACT: FITCH RATINGS
         Buenos Aires Contacts
         Maria Fernanda Lopez, Ana Gavuzzo, Lorna Martin
         Tel: +5411 4327-2444

         New York Contacts
         Peter Shaw +1-212-908-0553
         Linda Hammel +1-212-908-0303

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


PARMALAT ARGENTINA/URUGUAY: Seven Investors Express Interest
------------------------------------------------------------
The term for the submission of bids for Parmalat SpA's Argentine
and Uruguayan units expired last Friday with at least 7
investors expressing interest in the units.

However, it was unveiled that some companies would have found
difficulties. For instance, Chilean investment company Bethia,
which acquired Parmalat Chile, was also interested in the
Argentine subsidiary. Bethia paid US$25 million for the Chilean
unit, but, in exchange, the Italian parent took charge of the
liabilities paying suppliers and banks.

In Argentina, Bethia would have found that the unit was to be
sold with assets and liabilities, without division. And this
would have discouraged them from buying the local unit. They
would have decided to bid for the Uruguayan unit instead.

Although the details of the bidding process have not been
revealed yet, the bidders are said to be private equities
Pegasus Capital, Dolphin Fund and Southern Cross; and food
companies Arla Foods from Denmark, Chile's Calan, Basque Iparlat
and New Zealand's Fonterra.

KPMG will now evaluate all the bids. Law firm Allende & Brea
will deal with the legal issues.


                            ***********


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

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