TCRLA_Public/040602.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, June 2, 2004, Vol. 5, Issue 108

                            Headlines


A R G E N T I N A

AGENCIA DEPORTIVA: Court Issues Bankruptcy Order
AIRFE: Required Reports Schedule Set
ASERNAT: Court Grants Reorganization Motion
AUTOPISTAS DEL SOL: $387M Debentures Get `raB+' S&P Rating
BALASSI E HIJOS: Court Transfers Control to Trustee

EDENOR: Fine Required for Recent Outage
INSTRUMENTAL GMG: Claims Review Deadline Extended
LEACO: Seeks Court's Authorization to Reorganize
LECTORES Y LIBROS: Verification Deadline Approaches
LENS EXPRESS: Bankruptcy Process Begins By Court Order

MERBIW: Court Declares Company Bankrupt
OBRADOR: Bankruptcy Initiated, Liquidation to Follow
PLASTICOS PADKOVA: Ordered to Liquidate Assets
RUTA PUBLICIDAD: Enters Bankruptcy on Court Order
SIETE ASES: Readies Compromise Proposal for Creditors

TELECOM ARGENTINA/AGUAS ARGENTINAS/DISCO: Directors to Testify
* GCAB Kept Out of New Argentine Debt Plan


B R A Z I L

CEMIG: Announces Supervisory Board Resolutions
CEMIG: To Sell $125M Debentures in June
EMBRATEL: Rates Lowered To Attract More Clients
LIGHT SERVICOS: Debt Talks Falter With New Setback
VARIG-TAM: BNDES May Create Company to Avoid Regulatory Concern


V E N E Z U E L A

PDVSA: 2004-2009 Business Plan On Track Despite Political Uproar


     - - - - - - - - - -

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

AGENCIA DEPORTIVA: Court Issues Bankruptcy Order
------------------------------------------------
Agencia Deportiva Argentina S.A. is set to wind-up its
operations after Buenos Aires Court No. 22, with the assistance
of Clerk No. 43, ordered the Company's liquidation. The
bankruptcy order effectively transfers control of the Company's
assets to the court-appointed trustee who will also supervise
the liquidation proceedings.

Infobae reports that the court selected Ms. Alejandra Ethel
Giacomini as the court's trustee. She will be verifying
creditors' proofs of claim until the end of the verification
phase on June 22, 2004.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the Company's accounting
and business records.

The individual reports will be submitted on August 19, 2004
followed by the general report, which is due on September 30,
2004.

CONTACT: Ms. Alejandra Ethel Giacomini, Trustee
         Carabobo 250
         Buenos Aires


AIRFE: Required Reports Schedule Set
------------------------------------
The individual and general reports pertaining to Airfe Service
S.R.L.'s bankruptcy case are due for court submission on
September 24, 2004 and November 8, 2004, respectively, relates
Infobae. The bankruptcy case, which will end with the
liquidation of the Company's assets, is handled by Buenos Aires
Court No. 6.

TCR-LA earlier reported that Mr. Jose Cano Rodriguez filed the
involuntary bankruptcy motion after the company defaulted on a
US$12, 409.32 debt.

Mr. Luis Rolando Benedossi, court-appointed trustee, together
with Clerk No. 11 assists the court on this case.

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

         Mr. Luis Rolando Benedossi, Trustee
         Bernardo de Irigoyen
         Buenos Aires


ASERNAT: Court Grants Reorganization Motion
-------------------------------------------
Asernat S.A., a company operating in Buenos Aires, begins
reorganization proceedings after the city's Court No. 5, with
assistance from Clerk No. 9, granted its petition for "Concurso
Preventivo". During the reorganization, the Company will be able
to negotiate a settlement proposal for its creditors so as to
avoid a straight liquidation.  

According to Argentine news source Infobae, the reorganization
will be conducted under the direction of Ms. Viviana Palapoli,
the court-appointed trustee.

Creditors with claims against Asernat must present proofs of the
Company's indebtedness to Ms. Palapoli before August 6, 2004.
These claims will constitute the individual reports to be
submitted in court on September 20, 2004. The court also
requires the trustee to present an audit of the Company's
accounting and business records through a general report due on
November 2, 2004.

CONTACT:  Asernat S.A.
          Condarco 5164
          Buenos Aires

          Ms. Viviana Palapoli, Trustee
          Avenida Cordoba 859
          Buenos Aires


AUTOPISTAS DEL SOL: $387M Debentures Get `raB+' S&P Rating
----------------------------------------------------------
Credit Ratings agency Standard & Poor's (S&P) rated Argentine
highway concessionaire Autopistas del Sol's (Ausol) US$387
million in debentures raB+. Citing an S&P statement, Business
News Americas reports that the outlook is stable.

S&P assigned the rating based on the belief that Ausol's
financial profile will improve once its non-privileged financial
debt restructuring process has been completed.

Ausol, which is controlled by a private consortium headed by
Sideco Americana S.A. (SDA.YY), narrowed its net loss to ARS12.7
million in 2003 from a net loss of ARS506 million the year
before.


BALASSI E HIJOS: Court Transfers Control to Trustee
---------------------------------------------------
Ms. Ana Calzada Percivale, the court-appointed trustee, assumes
control of Balassi e Hijos S.A. after Buenos Aires Court No. 22
declared the Company bankrupt. Infobae reports that the court
expects all the company's creditors to present their claims to
the trustee for verification before July 5, 2004.

The individual reports based on the verified claims are due for
submission on September 1, 2004 followed by the general report
on October 14, 2004.

The bankruptcy proceedings will end with the disposal of the
Company's assets to repay its obligations. Clerk No. 43 assists
the court on this case.

CONTACT: Ms. Ana Calzada Percivale, Trustee
         Avda San Martin 2805
         Buenos Aires


EDENOR: Fine Required for Recent Outage
---------------------------------------
Buenos Aires electricity distributor Edenor, a unit of
Electricite de France (EdF), will have to calculate how much it
will compensate clients for lost service during a major outage
that started January 30 and lasted until February 7. The move,
says Dow Jones, follows a brief resolution issued by the
national electricity regulator Enre and published last week in
the Official Bulletin.

Accordingly, Edenor will be responsible for computing the amount
of its own fine, which will be paid out to the approximately
75,000 Buenos Aires residents that suffered power loss. Enre
gave no indication as to what the final monetary figure would
be.

CONTACT:  EDENOR S.A.
          Azopardo Building
          Azopardo 1025 (1107) Capital Federal
          Phone: (54-11) 4346-5000
          Fax: (54-11) 4346-5300
          E-mai: to ofitel@edenor.com.ar
          Home Page: http://www.edenor.com.ar


INSTRUMENTAL GMG: Claims Review Deadline Extended
-------------------------------------------------
Buenos Aires Court No. 6, aided by Clerk No. 11, reset the
verification deadline of Instrumental GMG's bankruptcy case to
August 16, 2004, relates Infobae.

After the verification phase is completed, Mr. Miguel A.
Franqueiro, court-appointed trustee, will submit the results in
court as individual reports on September 28, 2004. He will also
provide the court with a general report, which is due on
November 10, 2004.

CONTACT: Mr. Miguel A. Franqueiro, Trustee
         Corrientes 534
         Buenos Aires


LEACO: Seeks Court's Authorization to Reorganize
------------------------------------------------
Leaco S.A., a public contractor in Buenos Aires, filed a
petition for reorganization after the Company failed to pay its
debts since June 25, 2003. The reorganization request, once
granted by the court, will allow the company to negotiate a
settlement proposal with its creditors in order to prevent a
straight liquidation.

Argentine news source La Nacion reports that the request is
pending before Judge Sala of Buenos Aires Court No. 14. Dr.
Aleman, Clerk No. 27, assists the court on this case.                 

CONTACT: Leaco S.A.
         Viamonte 1546
         Buenos Aires  


LECTORES Y LIBROS: Verification Deadline Approaches
---------------------------------------------------
Creditors claims against Lectores Y Libros S.A. are due to be
filed by August 10, 2004, Infobae reports. Creditors must
present proofs of the company's debts to Mr. Norberto Markel,
the court-appointed trustee, before the said date to qualify for
the payments to be made after its assets are liquidated.

Buenos Aires Court No. 6, with assistance from Clerk No. 11, has
scheduled the submission of the individual reports on September
22, 2004. The general report will be presented in court on
November 4, 2004.

CONTACT: Lectores y Libros S.A.
         Alsina 1582
         Buenos Aires

         Mr. Norberto Markel, Trustee
         Tucuman 1657
         Buenos Aires


LENS EXPRESS: Bankruptcy Process Begins By Court Order
------------------------------------------------------
Buenos Aires Court No. 22 declared Lens Express S.A. bankrupt,
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. 43, appointed Ms. Marta Estela
Acuna as trustee. She will authenticate proofs of claim until
July 5, 2004. Afterwards, the trustee will prepare the
individual reports based on the results of the authentication
and then submit these reports to court on September 1, 2004.
After these results are processed in court, the trustee will
then submit the general report on October 13, 2004.

CONTACT:  Ms. Marta Estela Acuna, Trustee
          Combate de los Pozos 129
          Buenos Aires


MERBIW: Court Declares Company Bankrupt
---------------------------------------
Buenos Aires Court No. 6 declared local company Merbiw S.R.L.
bankrupt, reports Infobae. The Company was undergoing
reorganization when the ruling was issued.

The trustee, Ms. Miryam Lewenbaum, will verify claims "por via
incidental", as the court ordered. The receiver will also be
responsible for the individual and general reports.

Clerk No. 11 assists the court on this case.   

CONTACT: Ms. Miryam Lewenbaum, Trustee
         Montevideo 666
         Buenos Aires


OBRADOR: Bankruptcy Initiated, Liquidation to Follow
----------------------------------------------------
Obrador S.R.L. entered bankruptcy on orders from the city's
Court No. 6, reveals Infobae. Working with Clerk No. 11, the
court assigned Mr. Luis Rolando Benedossi as Trustee. He is to
verify creditors' claims until July 15, 2004. Creditors who fail
to have their claims validated before the deadline will be
disqualified from receiving any payments to be made after the
Company's assets are liquidated.

The individual reports, which are due on September 10, 2004, are
to be prepared upon completion of the verification process. The
court also requires Mr. Benedossi to prepare a general report
and file it on October 25, 2004. This report contains a summary
of the results in the individual reports.

CONTACT: Mr. Luis Rolando Benedossi, Trustee
         Bernardo de Irigoyen 330
         Buenos Aires


PLASTICOS PADKOVA: Ordered to Liquidate Assets
----------------------------------------------
Plasticos Padkova S.R.L. is now bankrupt after Buenos Court No.
23 declared it "Quiebra", Infobae reports. The bankruptcy
declaration opens the way for the liquidation of the Company's
assets in order to cover its debts.

The court, however, has not released information regarding
important dates during the reorganization as well as the name of
the court's trustee.

CONTACT:  Plasticos Padkova S.R.L.
          Girardot 152 - C.P. (1427)
          Buenos Aires  
          Phone: 0541-8555773 -5929
          FAX: 0541-8555773


RUTA PUBLICIDAD: Enters Bankruptcy on Court Order
-------------------------------------------------
Judge Garibotto of Buenos Aires Court No. 2 declared Ruta
Publicidad S.A. bankrupt, says La Nacion. The ruling comes in
approval of the bankruptcy petition filed by HSBC Bank of
Argentina for nonpayment of US$16,717.32 in debt. Clerk No. 3,
Dr. Vasallo, assists the court on the case, which will conclude
with the liquidation of the Company's assets.

The court's trustee, Mr. Jorge Feito, will examine and
authenticate creditors' claims until July 14, 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:  Ruta Publicidad S.A.
          Iparraguirre 740
          Buenos Aires

          Mr. Jorge Fieto, Trustee
          Avenida Medrano 537
          Buenos Aires


SIETE ASES: Readies Compromise Proposal for Creditors
-----------------------------------------------------
Siete Ases S.A. will begin drafting a settlement proposal for
its creditors after Buenos Aires Court No. 19 authorized the
Company's reorganization. Ms. Raquel Steinhaus will serve as
trustee during the course of the reorganization, according to
Infobae.

The verification of credits is ongoing until June 22, 2004.
Creditors of the Company must submit proofs of their claims to
the trustee before the said date in order to participate in the
Company's settlement proposal.

After the verification phase, the trustee will submit the claims
as individual reports on August 19, 2004. The submission of the
general report follows on September 30, 2004.  

Clerk No. 38 assists the court on this case.

CONTACT: Ms. Raquel Steinhaus, Trustee
         Paraguay 577
         Buenos Aires


TELECOM ARGENTINA/AGUAS ARGENTINAS/DISCO: Directors to Testify
--------------------------------------------------------------
Directors of Argentine firms Telecom Argentina, Aguas Argentinas
and Disco have been cited by a local judge to testify in a probe
into suspected tax evasion by the companies, a court official
said Monday. Reuters recalls that two years ago, Argentina's tax
agency denounced suspected evasion by the three companies,
accusing the firms of using fake billing to avoid paying income
tax.

Telecom Argentina, one of the country's top two telephone
companies, is majority owned by Telecom Italia Spa and W de
Argentina, an affiliate of Argentinean investment company Los W
group. The telephone company was recently slapped with an
approximate fine of US$360,000 by Argentina's National
Communications Commission (CNC) for failing to provide an
emergency telephone system after a robbery of telephone cables
left a total of 171,000 clients without service.

Embattled waterworks concessionaire Aguas Argentinas is a unit
of French company Suez (SZE). The Company recently signed a
transitional agreement with the Argentine government committing
it to invest ARS242 million this year and requiring its parent
company to suspend a claim against Argentina in the World Bank's
arbitration tribunal.

Supermarket chain Disco, on the other hand, is a unit of the
troubled Dutch retail giant Royal Ahold NV. The unit is on the
process of being sold to Chilean retailer Cencosud.

CONTACT:  TELECOM ARGENTINA S.A.
          Alicia Moreau de Justo 50, 10th Floor
          Capital Federal (1107) Republica Argentina
          Phone: +54 11 4968 4000
          Home Page: http://www.telecom.com.ar
          Contacts:
          Alberto J. Ricciardi, Chief Financial Officer
          Elvira Lazzati, Finance Director
          Pedro Insussarry, Investor Relations Manager
          Phone: (5411) 4968-3626/3627
          Fax: (5411) 4313-5842/3109
          E-mail: inversores@intersrv.telecom.com.ar

          DISCO S.A.
          Larrea 847, Piso 1
          1117 Buenos Aires, Argentina
          Phone: +54-11-4964-8000
          Fax: +54-11-4964-8076
          Home Page: http://www.disco.com.ar


* GCAB Kept Out of New Argentine Debt Plan
------------------------------------------
The head of the Global Committee of Argentine Bondholders (GCAB)
is complaining that the group, Argentina's biggest bondholder,
hasn't been included in finalizing the details of a plan to
restructure some US$100 billion in defaulted debt, reports Dow
Jones Newswires.

Nicola Stock, a GCAB co-chairman, made her comments Monday, as
the government says it will unveil its latest restructuring
proposal this week, preceding scheduled meetings with
bondholders from June 7 and June 16.

"We know nothing about this proposal," said Stock.

"There have been absolutely no negotiations. They never
happened," Stock said, regarding the government's promise to
consult with GCAB before it finalized its offering in mid-June.

Economy Minister Roberto Lavagna said Friday that a new proposal
would be concluded on the weekend or early this week. Although
the plan is understood to contain some improvements on the
government's initial "Dubai proposal," bondholders are concerned
that the changes are being made without their consultation. And
with the government characterizing this as a "final offer," it
isn't clear how its expedited unveiling could comply with a
March promise to the International Monetary Fund to "take into
account proposals received by creditors" through a process of
"constructive negotiations."

Stock said he was particularly concerned that the government
will make a filing to the U.S. Securities and Exchange
Commission without considering the results of next week's
planned meetings. He noted that in an April 27 press release the
government promised to file an 18K registration form to the SEC
in "early June."

"This could be a signal" that the government doesn't intend to
negotiate, Stock said. "And what I have always said is that if a
unilateral proposal comes out, we will fight it and reject it."

GCAB says it represents investors in Europe, the U.S. and Asia
holding more than US$37 billion in defaulted Argentine debt.



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

CEMIG: Announces Supervisory Board Resolutions
----------------------------------------------
Decisions taken by the Meeting of the Supervisory Board on 27
May 2004:

1. Declaration of Ethical Principles and the Code of
Professional Conduct.

2. Contracting of consumer meter reading services through micro-
data readers.

3. Replacement of the company's vehicle fleet.
4. Leasing of a helicopter.

5. Project: Reinforcing the Transmission System - ANEEL
Resolution 547/2003.

6. Signing of contracts for purchase/sale of electricity, use of
the distribution system and connection to the distribution
system.

7. Delegation of authority to sign contracts for purchase/sale
of electricity, use of and connection to the distribution
system, and works to meet new demand.

8. Signing of agreements for the Campos de Luz ("Fields of
Light") Project.

9. Debt Recognition Agreement with Copasa.

10. Issue and placement of nonconvertible debentures, and
structuring of a Securities Distribution Program.

11. Association Agreement between Cemig, Gasmig, Petrobras and
Gaspetro.

12. Acquisition of reclosers and sectionalizers.

13. Extension of the periods of contracts for services and works
of construction and extension, maintenance, refurbishment and
improvement of the electricity system, tree pruning and consumer
connection.

14. Contracting of reception, message delivery and front gate
services.

15. Signing of agreement with Copasa for construction of
additional water supply and wastewater outflow at Berilo, Minas
Gerais.

16. Contracting of services for the water basin preparation and
exploration project at the Irape hydroelectric plant, tenders
having been dispensed with.

17. Project: Aimores Mascarenhas low-voltage line.

18. Voluntary Retirement Program.

19. Refinancing of part of the debt maturing in June 2004.

20. Hedge transactions.

21. Agreement with the Minas Gerais Industrial Development
Institute to assign employees.

22. Agreement with Incra and ITER for assistance in the
distribution project and the Luz para Todos ("Light for All")
program.

23. Financing and Subvention contract with Eletrobras.

24. Authorization for the Vice-Chairman of the Supervisory Board
to call an Extraordinary General Meeting of Stockholders for
decision on proposals by the stockholder State of Minas Gerais
to decide bases for signing of a fourth amendment to the
Contract to Assign Outstanding Credits under the CRC Account and
for a new Dividends Policy for the Company, as decided in the
Ordinary and Extraordinary General Meetings of Stockholders of
Cemig held jointly on 30 April 2004.

CONTACT: CEMIG
         Av.Barbacena, 1200
         Santo Agostinho - CEP 30190-131
         Brasil
         Fax (0XX31)299-4691
         Tel.: (0XX31)349-2111


CEMIG: To Sell $125M Debentures in June
---------------------------------------
Cia. Energetica de Minas Gerais (Cemig), Brazil's biggest
combined power generator and distributor, is one company that
doesn't plan to roll over dollar debt coming due this year,
Bloomberg reports, citing Luiz Fernando Rolla, Cemig's investor
relations manager. Cemig plans to raise BRL400 million (US$125
million) in bonds in June as it lines up funds to refinance as
much as US$300 million in foreign currency debt that comes due
in 2004, he said.

"We're prepared because we plan to sell debentures in June,"
said Rolla in a phone interview from the Company's headquarters
in Belo Horizonte, Brazil. "We won't carry so much exchange rate
risk."


EMBRATEL: Rates Lowered To Attract More Clients
-----------------------------------------------
Embratel Participacoes SA, which was bought by Mexican telecoms
giant Telefonos de Mexico SA (Telmex) for US$400 million a month
ago, is cutting its rates on long-distance calls. According to
Dow Jones Newswires, Embratel is offering customers one minute
free for every two minutes spent on long-distance calls. The
Company didn't say how long the offer would last.

Embratel, Brazil's biggest long-distance carrier, is cutting its
rates in order to help increase its client base in the face of
stiff competition with other fixed-line players such as
Telefonica SA (TEF), Tele Norte Leste Participacoes SA (TNE) and
Brasil Telecom Participacoes SA (BRP).

CONTACT:  Silvia M.R. Pereira, Investor Relations
          Tel: (55 21) 2121-9662
          Fax: (55 21) 2121-6388
          E-mail: silvia.pereira@embratel.com.br
                  invest@embratel.com.br


LIGHT SERVICOS: Debt Talks Falter With New Setback
--------------------------------------------------
After being in default with a group of banks for nearly a year,
Brazilian power distributor Light Servicos de Eletricidade faces
new problems in talks to reschedule US$500 million in short-term
debt, financial daily Valor Economico said Monday.

The report said talks hit new snags last week when Light, which
is controlled by Electricite de France, revised the original
debt-rescheduling proposal it had made in December. According to
the daily, Light's creditors disliked the new proposed
conditions, calling them "very disappointing."

Light declined to comment on the report, and said negotiations
continue without a deadline for a conclusion.

In early December last year, Light told the group of private
banks it wanted to stretch the US$500-million payments through
three years and seven months, starting the first payment at the
end of 2005, as well as paying interest on its liabilities.

A US$170-million loan from Deutsche Bank, which comes due in
2007, was left out of the debt-rescheduling proposal because
it's not a short-term obligation.

At the time, Light said it was optimistic its creditors would
accept the proposal. Citibank is among its biggest creditors, to
which Light owes US$270 million.

Under the original deal, Light was proposing to pay 1% over
Brazil's CDI benchmark rate per year on the local currency debt
and 2% over Libor on its foreign debt. But creditors have been
pushing for a higher rate, according to market observers. Local
press reports said Light has refused to improve the conditions.

The utility did reach a successful agreement with another big
creditor, Brazil's federal electricity holding Centrais
Eletricas Brasileiras, or Eletrobras. Last year Light managed to
convince Eletrobras to accept rescheduling US$80 million in
debt.

The Rio de Janeiro distributor was also working to change the
currency profile of its debt, which totaled BRL4.4 billion
(US$1=BRL3.1) by the end of the first quarter. Out of that
total, about BRL1.3 billion is owed to its controller. At the
end of December, Light's debt was BRL4.2 billion.

Currently, about 75% of Light's total debt is dollar-indexed,
while 25% is denominated in local currency. Light is seeking to
reverse that proportion to 75% local and 25% dollar-linked debt.

As nearly all of Light's dollar-linked debt is hedged against
foreign exchange fluctuations, the company couldn't benefit from
the real's 18.2% gain against the U.S. dollar last year.

Light was hoping Brazil's development bank BNDES would lend it
US$220 million as part of a sector-wide capitalization plan.
With that cash, Light intended to pay US$125 million in short
term debt and use the remaining funds to pay interest.

EDF's Brazilian unit has been working to stretch maturities on
its debt to be eligible for funds in a BRL3.0 billion
capitalization program offered by BNDES. The bank announced last
September it would lend the funds to help improve the finances
of cash-strapped power distributors.

The program is being carried out through the purchase by BNDES
of debentures in the utilities, which must meet certain criteria
before they are eligible for loans.

Companies must make a deal with private creditors in which they
agree to renegotiate at least 30% of the utilities' short-term
debt.

Under the BNDES financial aid plan, new maturities must be at
least three years on average, with the first installment coming
due 12 months after the signing of the financing contract with
the development bank. BNDES will lend the same amount of the
percentage of the utility's short-term debt it manages to
renegotiate, up to 50%.

CONTACT:  LIGHT SERVICOS DE ELETRICIDADE S.A.
          Avenida Marechal Floriano, 168
          20080-002 Rio de Janeiro, Brazil
          Phone: +55-21-2211-2794
          Fax:   +55-21-2211-2993
          Home Page: http://www.lightrio.com.br
          Contact:
          Bo Gosta Kallstrand, Chairman
          Michel Gaillard, President and CEO
          Joel Nicolas, Executive Director, Operation
          Paulo Roberto Ribeiro Pinto, Executive Director,
                                 Investor Relations and CFO


VARIG-TAM: BNDES May Create Company to Avoid Regulatory Concern
---------------------------------------------------------------
The Brazilian development bank BNDES (Banco Nacional de
Desenvolvimento Economico e Social) is analyzing the possibility
of establishing a company that will manage the code share deal
between the air transportation companies Varig and TAM. The move
came after the Secreatria de Acompanhamento Economico (SEAE), a
branch of the finance ministry focusing on competition issues,
submitted a 40-page report to the Brazilian regulator Cade,
recommending that the airlines' code-sharing program be
"forbidden" because it allowed the airlines to form a cartel.

Cade approved the code-sharing last year as an initial step
towards a merger between TAM and debt-saddled Varig, which was
feared to go bankrupt. But early this year, Cade itself
questioned the agreement, saying it was unfair to other
airlines, and even threatened to cancel it. The regulator only
backed off when both airlines said a merger is 'impossible' in
the short term because of a lack of funding, heavy liabilities
and difficulties in reducing debt. Instead, the two airlines
chose to form an association to handle and maintain their code-
sharing agreement already in place.

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

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

              TAM
              Daniel Mandelli Martin, President
              Buenos Aires
              Tel. (54) (11) 4816-0001
              URL: www.tam.com.br




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

PDVSA: 2004-2009 Business Plan On Track Despite Political Uproar
----------------------------------------------------------------
Mr. Felix Rodriguez, vice president of Petroleos de Venezuela
S.A., announced that the state oil company plans to invest US$26
billion in oil and gas exploration and production up to 2009,
relates Business News Americas. The plan is part of a 2004-2009
business plan that calls for US$37 billion in total investments.
Previous information revealed that PDVSA would put up US$27
billion of the investment, with third parties providing the
remaining US$10 billion.

Despite continued political uncertainty in Caracas, where
President Hugo Chavez faces renewed calls for a recall
referendum, PDVSA says its business plan is on track.



                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
Lucilo Junior M. Pinili, Editors.

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 240/629-3300.


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