TCRLA_Public/040618.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

             Friday, June 18, 2004, Vol. 5, Issue 120

                            Headlines

A R G E N T I N A

AUTOPISTAS DEL SOL: Shares Begin Trading on Local Exchange
BANCO BISEL: Prepares for Reorganization
BANCO FRANCES: Regulator OKs BBVA's Delisting
BHN III: Local S&P Reaffirms Debt Ratings
BHN IV: Local S&P Assigns Junk Ratings to Financial Trusts

GAS TRELEW: Court Authorizes Reorganization
GATIC: Gotelli Reveals $25M Planned in Investments
HARROD'S: Settles Case With Banco Mariva
LEASING CONSULTING: Initiates Bankruptcy Proceedings
LIBRERIA Y PAPELERIA: Court Deems Bankruptcy Necessary

LINEAS LEON: Verification Deadline Fixed
LOMA NEGRA: S&P Reaffirms `raBB' Rating on $39.78M of Bonds
MED FAR: Enters Bankruptcy on Court Orders
METROGAS: S&P Reaffirms Junk Rating Assigned to Various Bonds
PARRILLA DON ZOILO: Court Approves Concurso Motion

SKYR S.R.L.: Court Orders Liquidation
SOLIMAT: Court Favors Creditor's Bankruptcy Petition
TGS: $400M in Bonds Flounder at Junk Level
THE FOX GROUP: Enters Involuntary Bankruptcy
TREVI: Proceeds With Court-Ordered Liquidation


B E R M U D A

FOSTER WHEELER: Subsidiary Secures New Contract
LORAL SPACE: Telstar 18 Satellite Sets Sail For Late June Launch


B R A Z I L

ELETROPAULO METROPOLITANA: Chooses Bank of New York as Agent
EMBRATEL: Anatel Likely to Vote on Sale Next Week
TELEMAR: IADB Guarantees $68M Bond Issue
UNIBANCO: Acquires BNL do Brasil
UNIBANCO: Acquisition of BNL Not to Affect Ratings, Says S&P

VARIG: Goodrich Announces Strategic Alliance With VEM


C O L O M B I A

* IADB Grants $20M Loan to Colombia


G U Y A N A

* IADB Approves $37.3M Loan to Guyana


M E X I C O

LUZ Y FUERZA: Allocates $6.9M For This Year's Network Expansion


P E R U

AERO CONTINENTE: May Face Drug-Trafficking Probe in Ecuador


U R U G U A Y

UTE: Signs Accord With Argentina

     -  -  -  -  -  -  -  -

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

AUTOPISTAS DEL SOL: Shares Begin Trading on Local Exchange
----------------------------------------------------------
Shares of Argentine toll concessionaire Autopistas del Sol SA
started trading on the local stock exchange Wednesday following
approval by bourse authorities earlier this week, reports Dow
Jones Newswires.

The trading is part of Ausol's recently completed out-of-court
debt restructuring, known in Spanish as an APE. Of Ausol's
US$490 million debt burden, creditors representing 99.66% signed
onto the deal.

Ausol is offering two swap options. The first is a new bond that
matures in 10 years and has a step-up interest rate starting at
3% and going up to 5%. The second alternative comprises five-
year notes with a fixed 7% interest rate and Class D shares of
the company.

Ausol issued 52.7 million shares for the debt restructuring
offer and these securities were authorized to trade beginning
Wednesday under the symbol AUSO.

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.


BANCO BISEL: Prepares for Reorganization
----------------------------------------
Rosario-based Banco Bisel S.A. proceeds with reorganization
after a local court approved the petition filed by the Company.
This pronouncement authorizes the Banco Bisel to begin drafting
a settlement proposal with its creditors in order to prevent a
straight liquidation.

Further, The reorganization allows the Company to retain control
of its assets subject to certain conditions imposed by Argentine
law and the oversight of the court appointed trustee.

Banco Bisel is scheduled to present a completed settlement plan
during the informative assembly on June 29, 2004.

CONTACT: Banco Bisel S.A.
         Rosario
         Santa Fe


BANCO FRANCES: Regulator OKs BBVA's Delisting
---------------------------------------------
Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) received approval
from Argentine regulators Wednesday to delist from the Buenos
Aires stock market, where shares of its Argentine subsidiary,
BBVA Banco Frances are traded, reports Business News Americas.

There's no other explanation as to why BBVA asked to remove its
stock from the bourse except that the stock has not been
trading.

BBVA announced in 2001 its intention to make a public shares
offer (IPO) for the remaining 32% it did not control of Banco
Frances. In order for BBVA to proceed with the IPO, it had to
list on the stock exchange, and it did so. After the IPO failed,
the bank continued listing on the stock exchange but was not
trading, and that was why it decided to take its papers off the
market, a BBVA source explained.


BHN III: Local S&P Reaffirms Debt Ratings
-----------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
reaffirmed the `raD' rating assigned to various Fideicomiso
Hipotecario BHN III Financial Trusts.

The affected securities are:

- US$14.896 million worth of "Clase A1" financial trusts due on
May 31, 2017

- US$82.09 million worth of "Clase A2" financial trusts coming
due on May 31, 2017

- US$5.06 million worth of "Clase B" financial trusts coming due
on May 31, 2018

Meanwhile, the local S&P also reaffirmed the `raC' rating
assigned to Fideicomiso Hipotecario BHN III's "Certificados de
Participacion" worth US$3.374 million due on May 31, 2018.

An 'raC' rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has been
taken, but payments on the obligation are being continued, said
S&P.


BHN IV: Local S&P Assigns Junk Ratings to Financial Trusts
----------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
assigned junk ratings to various BHN IV financial trusts.

The Comision Nacional de Valores reveals that the local S&P
assigned an `raD' rating to the following financial trust
issues:

- US$24,375,000 worth of "Serie B" financial trusts with
undisclosed maturity date; and

- US$156,000,000 worth of "Serie AV/AF" financial trusts that
expired on April 27, 2000

Moreover, the local Standard & Poor's assigned an `raC' rating
to US$14,625,505 worth of "Certificado de Participacion" with
undisclosed maturity date.


GAS TRELEW: Court Authorizes Reorganization
-------------------------------------------
Gas Trelew S.A. obtained permission from a Province of Chubut
court to proceed with its reorganization. Court records show
that the commercial gas distributor has assets amounting to
US$6,676,789.29 and liabilities of US$6,707,339.86.

La Nacion informs that the accounting firm Estudio RodrĄguez
Martorelli, Demarchi y Asociados has been appointed as trustee.
Creditors have until October 8, 2004 to submit their proofs of
claim to the trustee

The informative assembly, the last stage of a reorganization
process, will be held on June 30, next year.

CONTACT: Gas Trelew S.A.
         Cerrito 146
         Parque Industrial Trelew
         Chubut

         Estudio RodrĄguez Martorelli, Demarchi y Asociados
         Trustee
         Sarmiento 1452
         Chubut


GATIC: Gotelli Reveals $25M Planned in Investments
--------------------------------------------------
Guillermo Gotelli is planning on investing US$25 million in
Argentine troubled textile company Gatic.

Gotelli leads an investment group called Indular Manufacturas,
who signed a contract to rent four of Gatic's paralyzed plants
and would reopen them in July.

Indular has reached an agreement with the workers of three of
these four plants and is negotiating with the rest.

The group has already thought of a name for the new company that
will run the four plants. It has also subscribed agreements with
several international brands for the manufacturing of sports
clothing and shoes.

Union sources pointed Gotelli promised to invest US$25 million
to set up the new company.

Judge Juan Manuel Gutierrez Cabello, who oversees Gatic's
bankruptcy proceedings, has to decide on the approval of the
accord subscribed between workers and Indular.

The rental contract with Gatic involves the payment of a ARS12
million annual fee to the Bakchellian family - owner of the
textile concern -, who will in turn allocate the resources to
cancel the Company's ARS500 million debt.


HARROD'S: Settles Case With Banco Mariva
----------------------------------------
Harrod's, a Buenos Aires-based department store, managed to
avoid a judicial auction after paying ARS36,000 in court costs
related to the lawsuit brought by one of its creditors, Banco
Mariva.

Harrod's had cancelled the ARS145,000 debt last week and the
case has been closed with the payment of the court cost.

Nevertheless, there are still other 70 lawsuits against the
department store, which could lead to further judicial auctions.


LEASING CONSULTING: Initiates Bankruptcy Proceedings
----------------------------------------------------
Leasing Consulting del Plata S.A. of Buenos Aires faces the
liquidation of its assets after a local court issued a
bankruptcy order against the Company.

According to Infobae, the court-appointed trustee, Mr. Miguel
Angel Kupchik, will supervise the bankruptcy proceedings. He
will accept creditors' proofs of claims for verification until
August 12, 2004.

Creditors with unverified claims will not be included in the
payments to be made once the Company's assets are disposed.

CONTACT: Mr. Miguel Angel Kupchik, Trustee
         Adolfo Alsina 1360
         Buenos Aires


LIBRERIA Y PAPELERIA: Court Deems Bankruptcy Necessary
------------------------------------------------------
Libreria y Papeleria A.W. S.R.L., which was undergoing
reorganization, entered bankruptcy on orders from the Buenos
Aires civil and commercial tribunal.

Infobae reports that the court assigned Ms. Daniela Fabiana
Frisone as the company's trustee. She will be supervising the
Company during the course of the reorganization.

The credit verification process will be done "por via
incidental", according the report.

CONTACT: Ms. Daniela Fabiana Frisone, Trustee
         Sarmiento 1371
         Buenos Aires


LINEAS LEON: Verification Deadline Fixed
----------------------------------------
The verification of creditors' claims for the Lineas Leon S.A.
insolvency case is set to end on August 3, 2004, states
Argentine news source Infobae.

Ms. Eva Malvina Gorsd, the court-appointed trustee tasked with
examining the claims, will submit the validation results as
individual reports on September 15, 2004. She will also provide
the court with a general report of the case on October 28, 2004.

On April 7 next year, the Company's creditors will vote on the
settlement proposal prepared by the Company.

CONTACT: Lineas Leon S.A.
         Avda Corrientes 2565
         Buenos Aires

         Ms. Eva Malvina Gorsd, Trustee
         Paraguay 1225
         Buenos Aires


LOMA NEGRA: S&P Reaffirms `raBB' Rating on $39.78M of Bonds
-----------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
reaffirmed its `raBB' rating on US$39,778,828 of corporate bonds
issued by Loma Negra Cia. Industrial Argentina. The rating was
based on the Company's finances as of Feb. 28, 2004.

The CNV described the affected bonds as "Obligaciones
Negociables Serie 6". The issue will mature on September 30,
2013.

An obligation rated `raBB' denotes somewhat weak protection
parameters relative to other Argentine obligations, according to
S&P. The obligor's capacity to meet its financial commitments
upon the obligation is somewhat weak because of major ongoing
uncertainties or exposure to adverse business, financial or
economic conditions.


MED FAR: Enters Bankruptcy on Court Orders
------------------------------------------
Med Far S.A. will enter bankruptcy protection after a Buenos
Aires court ordered the Company's liquidation. The bankruptcy
order effectively transfers control of the Company's assets to
the court-appointed trustee who will supervise the liquidation
proceedings.

Infobae reports that the court selected Ms. Juana Fany Gutemberg
as trustee. She will be verifying creditors' proofs of claim
until the end of the verification phase on August 24, 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 October 5, 2004 followed by the general report, which is due
on October 17, 2004.

CONTACT: Ms. Juana Fany Gutemberg, Trustee
         Avenida Callao 449
         Buenos Aires


METROGAS: S&P Reaffirms Junk Rating Assigned to Various Bonds
-------------------------------------------------------------
The Argentine arm of Standard & Poor's International Ratings,
Ltd. reaffirms the `raD' rating assigned to various corporate
bonds issued by natural gas distributor Metrogas SA, the CVN
reveals on its official Web site.

The action affects the following bonds:

- US$130 million worth of bonds described as " Serie C por U$S
130.000.000 dentro del Programa Global de U$S 600 millones," and
which matured on May 7, 2004;

- EUR110 million worth of bonds described as "Serie B por euros
110 millones" and which matured on Sep. 27, 2002;

- US$100 million worth of bonds described as "Serie A por U$S
100.000.000 dentro del Programa Global de U$S 600 millones" and
which matured on April 1, 2003; and

- US$600 million worth of bonds described as "obligaciones
negociables simples" with undisclosed maturity date.

The rating action is based on Metrogas' financial status as of
March 31, 2003.

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

Spain's Repsol-YPF SA (REP) and the U.K.'s BG Group PLC (BRG)
control 70% of Metrogas.

CONTACT:  METROGAS, S.A.
          Gregorio Araoz de Lamadrid 1360
          Buenos Aires
          Argentina
          CPA C 1267
          Phone: +54 11 4309 1010
          Fax:  +54 11 4309 1025
          Home Page; http://www.metrogas.com.ar
          Contact:
          William Harvey Alvarez, President


PARRILLA DON ZOILO: Court Approves Concurso Motion
-------------------------------------------------
The Buenos Aires Commercial and Civil Tribunal approved a
petition for reorganization filed by troubled restaurant
Parrilla Don Zoilo S.A., according to a report by Argentine
daily La Nacion.

Under insolvency protection, the Company will be supervised by
its trustee, Mr. Alfredo Rodriguez. He will verify claims until
August 19, 2004. After verifying the claims, the trustee will
then submit the individual and general reports to court. Dates
for submission of these reports have not been released.

The informative assembly is scheduled on May 19, 2005. This is
one of the last parts of the reorganization process.

CONTACT: Parrilla Don Zoilo S.A.
         Honorio Pueyrredon 1412
         Buenos Aires

         Mr. Alfredo Rodriguez, Trustee
         M.T. de Alvear 1775
         Buenos Aires


SKYR S.R.L.: Court Orders Liquidation
-------------------------------------
Skyr S.R.L. prepares to wind-up its operations following the
bankruptcy pronouncement issued by the Buenos Aires civil and
commercial tribunal. The declaration consequently prohibits the
Company from administering its assets, control of which will be
transferred to a court-appointed trustee.

Infobae reports that Mr. Roberto di Martino will serve as
trustee during the liquidation process. He will be reviewing
creditors' proofs of claims until August 4, 2004. The verified
claims will be the basis for the individual reports to be
presented for court approval on September 15, 2004. Afterwards,
the trustee will also submit a general report on October 27,
2004.

CONTACT: Mr. Roberto de Martino, Trustee
         Avenida Callao 449
         Buenos Aires


SOLIMAT: Court Favors Creditor's Bankruptcy Petition
----------------------------------------------------
Mr. Rufino Carrizo successfully petitioned for the bankruptcy of
Solimat S.R.L. after Judge Taillade of Buenos Aires Court No. 20
declared the Company "Quiebra," reports La Nacion.

As such, Solimat will now start the bankruptcy process with Mr.
Roberto Leibovicius as trustee. Creditors of the Company must
submit proofs of their claim to the trustee before September 6,
2004 for authentication. Failure to do so will mean a
disqualification from the payments that will be made after the
Company's assets are liquidated.

Mr. Carrizo asked for the Company's bankruptcy after the latter
failed to pay debts amounting to US$29,441.25.

Dr. Perillo, Clerk No. 40, assists the court on the case, which
will culminate in the liquidation of all of its assets.

CONTACT: Solimat S.R.L.
         Avenida Chiclana 4180
         Buenos Aires

         Mr. Roberto Leibovicius, Trustee
         Tucuman 1585
         Buenos Aires


TGS: $400M in Bonds Flounder at Junk Level
------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains an `raD' rating on corporate bonds issued by
Transportadora de Gas del Sur S.A. (TGS), says the CNV.

The bonds affected are:

- US$300 million worth of bonds described as "Programa Global de
2000" with undisclosed maturity date;

- US$500 million worth of bonds described as "Programa Global de
1999" with undisclosed maturity date; and

- US$100 million worth of bonds described as "Obligaciones
Negociables emitidas bajo el Programa Global de TĄtulos de Corot
y Mediano Plazo por USD 500 Mio, vencido en diciembre de 1998."
This issue expired in December 2, 2002.

The rating action is based on the Company's financial status as
of March 31, 2004.


THE FOX GROUP: Enters Involuntary Bankruptcy
--------------------------------------------
Judge Villanueva of Buenos Aires Court No. 23 approved the
involuntary bankruptcy petition filed by La Caja Aseguradora de
Riesgos de Seguros ART S.A. against The Fox Group S.A., reports
daily La Nacion. The petition was prompted by the Company's
US$936.80 debt default.

The court-appointed trustee, Ms. Mirta Calfun de Bendersky will
verify creditors' proofs of claim until August 23, 2004.
Verifications are done to ascertain the nature and amount of the
Company's debts. The trustee will also prepare the individual
and general reports on the case.

Clerk No. 45, Dr. Timpanelli, assists the court on the case.

CONTACT: The Fox Group S.A.
         Viamonte 1181
         Buenos Aires

         Ms. Mirta Calfun de Bendersky, Trustee
         Humahuaca 4156
         Buenos Aires


TREVI: Proceeds With Court-Ordered Liquidation
----------------------------------------------
Buenos Aires-based Trevi S.A.I.C. y F. was declared bankrupt by
the city's commercial and civil tribunal, reports Infobae. Under
bankruptcy protection, a court-appointed trustee will assume
control of the Company up to the final phase of the bankruptcy
process, the liquidation of its assets. Proceeds from the
liquidation will be used to repay the Company's debts.

CONTACT: Trevi S.A.I.C. y F.
         Jose Gervasio de Artigas 5137
         Buenos Aires



=============
B E R M U D A
=============

FOSTER WHEELER: Subsidiary Secures New Contract
-----------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWLRF) announced Wednesday that its
subsidiary Foster Wheeler International Corporation has been
awarded an engineering, onshore procurement, project and
construction management (EPCm) services contract for a world-
scale purified terephthalic acid (PTA) plant to be built in
Thailand by Indorama Petrochem Ltd. The terms of the contract
were not disclosed.

The PTA plant will be built for Indorama at the Asia Industrial
Park close to Map Ta Phut in Thailand. The plant will process
paraxylene and acetic acid to give a minimum production rate of
640,000 metric tonnes per annum of PTA, which will be used for
the production of various polyester products.

The process front-end engineering package (FEEP) has been
developed for Indorama Petrochem Ltd. by INVISTA Inc., the
process licensor, from their INVISTA (UK) Limited technology
group located at Wilton, Teesside, in the UK.

Steve Davies, managing director, sales, marketing and strategic
planning, Foster Wheeler International Corporation, said: "We
are delighted to be involved in this major project which will be
an important addition to the petrochemicals industry in
Thailand. This contract award will build on Foster Wheeler's
impressive track record in Thailand and will give us the
opportunity to develop a successful relationship with Indorama.
It also marks another success in our relationship with INVISTA
as a preferred contractor and combines our experience in PTA
with our historic and continuous strength in Thailand."

The booking was included in Foster Wheeler's first-quarter
results.

Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and management,
research and plant operation services. Foster Wheeler serves the
refining, upstream oil and gas, LNG and gas-to-liquids,
petrochemical, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries. The corporation is based in Hamilton,
Bermuda, and its operational headquarters are in Clinton, New
Jersey, USA.

CONTACT: Media Contact
         Ms. Maureen Bingert
         908-730-4444

         Other Inquiries:
         908-730-4000

Web site: http://www.fwc.com


LORAL SPACE: Telstar 18 Satellite Sets Sail For Late June Launch
----------------------------------------------------------------
Loral Space & Communications announced Wednesday that the
Telstar 18 satellite has set sail aboard Sea Launch's Odyssey
Launch Platform, bound for its equatorial launch site in the
Pacific Ocean. Lift-off aboard a Sea Launch Zenit 3SL rocket is
scheduled for June 28, 2004.

"When it enters service in August, the Telstar 18 satellite will
add substantial capacity in Asia, one of Loral's most successful
FSS markets," said Terry Hart, president, Loral Skynet. "Telstar
18 will join the already in-orbit Telstar 10 in serving Asia,
offering cable, broadcast and SkyReach IP service connectivity
stretching from Europe, through Asia and Australia, then on to
the U.S. via Hawaii."

Built by Space Systems/Loral (SS/L) and operated by Loral Skynet
-- both subsidiaries of Loral Space & Communications -- Telstar
18 will be located at 138 degrees East longitude and carry a
total of 54 active transponders, sixteen high-power Ku-band
transponders and thirty-eight C-band transponders.

In consideration for funding a portion of the satellite
project's cost, APT Satellite Company Limited, Hong Kong, will
initially acquire use of 68.5 percent of Telstar 18's capacity
for Apstar V services. The number of transponders used by APT
will be reduced over time, ultimately to 54 percent of the
satellite's capacity. For more information on APT, visit
www.apstar.com.

In addition to transmitting cable programming and direct-to-home
broadcasting services, Telstar 18 will host Skynet's SkyReach
two-way IP-based end-to-end networking solution. SkyReach(SM),
which is already available and in use by several customers
throughout the Americas, allows organizations to create an
instant infrastructure using a VSAT network, connecting offices
within a city or around the globe.

Telstar 18 is a version of SS/L's space-proven 1300 satellite
platform, which has an excellent record of reliable operation.
The geostationary 1300 has a designed service life of 13 years
and maintains station-keeping and orbital stability by using
bipropellant propulsion and momentum-bias systems. In all, SS/L
satellites have amassed more than 1,000 years of on-orbit
service.

Loral's other Asian satellite, Telstar 10/Apstar IIR, is
operating at 76.5 degrees East longitude and is more than 80
percent utilized. Telstar 10 provides service for data
applications throughout the region and also hosts one of the
largest video communities in Asia.

A pioneer in the satellite industry, Loral Skynet continues to
deliver the superior service quality and range of satellite
solutions that have made it an industry leader for more than 40
years. Through the broad coverage of the Telstar satellite
fleet, and in combination with its established hybrid VSAT/fiber
global network infrastructure, Skynet is a source for all
broadcast, data network, Internet access, IP and systems
integration needs. Headquartered in Bedminster, New Jersey,
Loral Skynet is dedicated to providing secure, high-quality
connectivity and communications. For more information, visit
www.loralskynet.com.

Space Systems/Loral is a premier designer, manufacturer, and
integrator of powerful satellites and satellite systems. SS/L
also provides a range of related services that include mission
control operations and procurement of launch services. Based in
Palo Alto, Calif., the company has an international base of
commercial and government customers whose applications include
broadband digital communications, direct-to-home broadcast,
defense communications, environmental monitoring, and air
traffic control. SS/L is ISO 9001:2000 certified. For more
information, visit www.ssloral.com.

Loral Skynet and Space Systems/Loral are both subsidiaries of
Loral Space & Communications (OTCBB: LRLSQ). For more
information, visit Loral's web site at www.loral.com.

CONTACT: John McCarthy
         (212) 697-1105



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

ELETROPAULO METROPOLITANA: Chooses Bank of New York as Agent
------------------------------------------------------------
The Bank of New York, a global leader in securities servicing,
has been appointed by Eletropaulo Metropolitana Eletricidade de
Sao Paulo S/A (Eletropaulo) as post-restructuring administrative
agent for its new US$236,965,306.98 Dollar Loans. As the
administrative agent, the Bank will determine and calculate
interest on a quarterly basis, as well as make principal
payments to investors.

The transaction, which encompasses four tranches of U.S. Dollar
Loans, results from Eletropaulo's restructuring effort of its
existing debt. The transaction involves 30 domestic and
international creditors, making it one of the largest
restructurings to take place in Brazil to date.

Steven Hodgetts, managing director of global trust services at
The Bank of New York, said, "This appointment further affirms
the Bank's leading position as a restructuring trustee in Latin
America and around the world. Issuers and advisors increasingly
look to The Bank of New York as a neutral and conflict-free
corporate trust agent that can reliably and efficiently provide
the range of services required to support their complex
restructuring efforts."

Eletropaulo Metropolitana Eletricidade de Sao Paulo S/A is an
energy distributor in Latin America, primarily in Brazil. It
distributes electricity to approximately 24 cities in the
Greater Sao Paulo area, supplying an estimated 16 million
consumers. It is a subsidiary of AES Corporation.

The Bank of New York is a leading provider of corporate trust
and agency services. The Bank and its subsidiaries and
affiliates administer a portfolio of more than 90,000 trustee
and agency appointments, representing more than $1 trillion in
outstanding securities for more than 30,000 clients around the
world. The Bank is a recognized leader for trust services in
several debt products, including corporate and municipal debt,
mortgage-backed and asset-backed securities, derivative security
services and international debt offerings.

The Bank of New York Company, Inc. (NYSE: BK) plays an integral
role in the infrastructure of the capital markets, servicing
securities in more than 100 markets worldwide. The Company
provides quality solutions through leading technology for global
financial institutions, asset managers, governments, non-profit
organizations, corporations, and individuals. Its principal
subsidiary, The Bank of New York, founded in 1784, is the oldest
bank in the United States and has a distinguished history of
serving clients around the world through its five primary
businesses: Securities Servicing and Global Payment Services,
Private Client Services and Asset Management, Corporate Banking,
Global Market Services, and Retail Banking. Additional
information on the Company is available at www.bankofny.com.

This announcement is not an offer to sell or a solicitation of
an offer to buy any securities. The offering is made only by
means of the prospectus.

CONTACT:  The Bank of New York Company, Inc., New York
          Kevin Heine, 212-635-1569


EMBRATEL: Anatel Likely to Vote on Sale Next Week
-------------------------------------------------
Brazil's telecommunications regulator Anatel expects to vote as
early as next week on the US$400 million purchase of Embratel
Participacoes SA, Brazil's largest phone company, by Telefonos
de Mexico SA (Telmex), reports Bloomberg.

Jose Leite Pereira Filho, a board member of the regulator,
expected Anatel to examine terms of the sale on Wednesday.

Embratel is the premium telecommunications provider in Brazil
and offers and ample variety of telecom services -local and long
distance telephony, advanced voice, high-speed data
transmission, Internet, satellite data communications, and
corporate networks. The Company is a leader in the country for
data services and Internet, and is highly qualified to be an
all-distance network carrier in Latin America.

Telmex is controlled by Mexican billionaire Carlos Slim.

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


TELEMAR: IADB Guarantees $68M Bond Issue
----------------------------------------
The Inter-American Development Bank announced the approval on
June 16, 2004 of up to $68 million partial credit guarantee for
a bond issue by the private Brazilian telecommunications company
Telemar Norte Leste S.A. ("Telemar"). The total bond issue will
be the equivalent of $170 million, denominated in local
currency, while the BankBoston de Brasil will be the placement
agent.

The guarantee is designed to strengthen local capital markets by
creating new investment opportunities for institutional
investors. The bonds will have a longer tenor than those
presently available on the Brazilian market.

Telemar is to dedicate the new resources obtained by the issue
for the expansion of its management systems and the
modernization of its telecommunications network, enhancing the
quality of the system, increasing productivity and achieving
greater competitiveness in the areas of Internet and data
services.

The project will reduce the amount of time to install new lines
and will resolve issues of network congestion. It will offer
users a new service with access to Asymmetric Digital
Subscribers Lines (ADSL) and reduce the number of requests for
repairs.

Telemar is a subsidiary of Tele Norte Leste Participacoes S.A. -
one of the private companies formed after the restructuring and
privatization of the state telecommunications company - which
operates fixed lines in Northern Brazil, serving a region
comprising 93 million inhabitants. The service area constitutes
64 percent of the country's territory and 40 percent of its
gross domestic product.

CONTACT:  TNE - INVESTOR RELATIONS GLOBAL CONSULTING GROUP
          Roberto Terziani
          (terziani@telemar.com.br)
          55 21 3131 1208

          Kevin Kirkeby
          (kkirkeby@hfgcg.com)

          Carlos Lacerda
          (carlosl@telemar.com.br)
          55 21 3131 1314
          Fax: 55 21 3131 1155
               1 646 284 9494
          Tel: 1-646-284-9416;

Website: www.telemar.com.br/ir


UNIBANCO: Acquires BNL do Brasil
--------------------------------
Unibanco - Uniao de Bancos Brasileiros S.A. ("Unibanco") and
Unibanco Holdings ("Unibanco Holdings"), as established in CVM
Instruction 358/02, announce the acquisition, of the total
capital of Banco BNL do Brasil ("BNL Brasil"), from Banca
Nazionale del Lavoro S.p.A. ("BNL"). BNL will receive
1,000,000,000 of Units (one billion of Units) from Unibanco and
Unibanco Holdings. Thus, after the conclusion of the
transaction, BNL will own, directly and indirectly, 1.43% of
Unibanco's capital.

BNL Brasil stockholders' equity to be incorporated by Unibanco
was evaluated in BRL178.5 million. BNL Brasil owns a credit
portfolio of BRL698.5 million further to a credit card and a
consumer finance operation that includes some 107 thousand
clients and 96 thousand cards issued.

The transaction also includes the creation of an Italian Desk at
Unibanco, which will allow BNL and Unibanco to offer business
opportunities and services to Italian companies in Brazil. BNL
will second to Unibanco the Head of the Italian Desk.

The transaction is subject to the approval of the relevant
regulatory authorities.

CONTACT:  Unibanco Investor Relations Area
          Unibanco - Uniao de Bancos Brasileiros S.A.
          Av. Eusebio Matoso, 891
          15th floor - Sao Paulo, SP 05423-901 - Brazil
          Tel.: (55 11) 3097-1313
          Fax: (55 11) 3813-6182 / 3097-4830
          E-mail: investor.relations@unibanco.com
          Web site: http://www.ir.unibanco.com


UNIBANCO: Acquisition of BNL Not to Affect Ratings, Says S&P
------------------------------------------------------------
Standard & Poor's Ratings Services said Wednesday that the
acquisition by Unibanco-Uniao de Bancos Brasileiros S.A. (UBB;
foreign currency, B+/Positive/B) of Banca Nazionale del Lavoro
SpA's (BNL) Brazilian operations will not affect its ratings or
outlooks on UBB. The acquisition, still conditional on approval
by the Central Bank of Brazil, will reinforce UBB's middle-
market and corporate operations by adding to the bank a credit
portfolio of approximately Brazilian reais (BrR) 700 million. It
also reinforces the bank's position as the third-largest private
bank in the Brazilian ranking. BNL Italy will receive 1 billion
of UBB's Units for the transaction-equivalent to 1.4% of UBB's
capital. The estimated price of the overall transaction is
BrR121 million (units' price as of June 15, 2004)-lower than
BNL's Brazilian subsidiary equity of around BrR180 million. The
deal does not affect UBB's liquidity or capitalization.

ANALYSTS:  Claudio Gallina, Sao Paulo (55) 11-5501-8938
           Daniel Araujo, Sao Paulo (55) 11-5501-8939


VARIG: Goodrich Announces Strategic Alliance With VEM
-----------------------------------------------------
Goodrich Corporation (NYSE: GR) has entered into a strategic
alliance with VEM -- Varig Engineering Maintenance -- for
aircraft wheels and brakes service.  This agreement, which
covers all civil aircraft, is a first for Goodrich's Aircraft
Wheels and Brakes division.  It establishes the VEM workshop as
an authorized Goodrich Wheels & Brakes Service Center.  The
alliance positions both Goodrich and VEM in South America in a
leading role for repair and overhaul of wheels and brakes.  With
the completion of this strategic alliance, Goodrich will have
access to VEM's wheel and brake service center and VEM will
receive training, repair and overhaul support and technical
assistance for all Goodrich wheel and brake products.

According to Goodrich's Ernie D'Amico, Vice President Wheel and
Brakes Services, "We are proud of our history with VEM and of
their commitment to Goodrich as demonstrated by this alliance.
This agreement with VEM will enhance both companies' abilities
to continue to offer exceptional quality overhaul service to the
numerous airlines operating in the region."

"Partnerships are our main strategy to increase the array of
services that we can provide. We are always looking for creative
alliances, where VEM and special partners will join forces and
provide a plus to the customers. In this case, by joining
efforts with Goodrich we will be able to provide services with
VEM known quality and support of one of the biggest and most
important wheels and brakes manufactures. We are particularly
proud to be Goodrich's first authorized repair center in the
world," stated Luis Alberto Correa, VEM's Marketing & Sales Vice
President.

Goodrich has been a world leader in the design, development, and
manufacture of commercial, military, regional, and business
aircraft wheels and brakes for more than 50 years. It has
created innovative braking systems for over 200 types of
aircraft during this half century and has many more
technological improvements in development.

Goodrich Corporation, a Fortune 500 company, is a leading global
supplier of systems and services to the aerospace and defense
industry.  If there's an aircraft in the sky -- we're on it.
Goodrich technology is involved in making aircraft fly ...
helping them land ... and keeping them safe.   Serving a global
customer base with significant worldwide manufacturing and
service facilities, Goodrich is one of the largest aerospace
companies in the world.

Web site: http://www.goodrich.com

VEM is the leader of the Latin American MRO sector and is ranked
among the world's top 10 MROs. It has almost eight decades
expertise on Boeing, Fokker and Embraer aircraft and is
currently undergoing Airbus certification. The company is known
worldwide for the superior quality of the major maintenance
services delivered to its clients and has nearly 10,000
components on its capability list. It also serves the military
and corporate aviation segments and is certified for the Legacy
(Embraer), Gulfstream and Piaggio.

Web site: http://www.varigvem.com



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

* IADB Grants $20M Loan to Colombia
-----------------------------------
The Inter-American Development Bank announced Wednesday the
approval of a $20 million loan to Colombia to strengthen and
consolidate the national environmental system (SINA).

Resources from the loan will co-finance environmental
investments in priority areas established by the government:
conservation, restoration and sustainable management of forest
ecosystems in watersheds; comprehensive solid waste management;
and cleaner protection.

Environmental institutions in the national environmental system
will be strengthened through investments in training and
information systems. New instruments and mechanisms will become
operational in specialized agencies to improve their
effectiveness in carrying out environmental policies while
encouraging the affected population to participate in the
process of conservation and increased ecological awareness.

Commenting on the loan, the executive director for Colombia,
Luis Guillermo Echeverri, noted that the operation reflects the
commitment of the national government to carry out an effective
environmental policy.

"The program will complement other projects finance by the World
Bank, and it represents an effective coordination among
multilateral financial organizations to support the ongoing
effort of the Colombian government to protect and recover the
environment," he added.

The program of reforestation that began in the first phase of
the national environmental program (SINA I) will be continued,
and plans for managing water-producing watersheds, wetlands,
mangroves and moors will become operational.

In the medium term the program, among other objectives, will
improve the capacity of sub-national institutions on waste
management and strengthen Colombia's strategy on cleaner
production. The program will be coordinated with environmental
assistance programs to Colombia, notably those financed by the
World Bank and The Netherlands government. The program reflects
the IDB strategy of assigning a priority to natural resources
management within Colombia's overall program of promoting
economic development. The Ministry of the Environment* will be
in charge of carrying out the program.

The financing follows up on an IDB loan of $60.4 million
approved for Colombia in 1993 that helped create the National
Environmental System and make it operational.

The current IDB loan is for a 25-year term, with a four-year
grace period, at a variable interest rate. Local counterpart
funds total $8.6 million.

CONTACT: Staff Contacts
         Mr. Esteban Molfino
         Chief, Funding Section
         estebanm@iadb.org
         Tel.: +1-202-623-2369

         Ms. Laura Fan
         lauraf@iadb.org
         Tel.: +1-202-623-3772



===========
G U Y A N A
===========

* IADB Approves $37.3M Loan to Guyana
-------------------------------------
Road from Moleson Creek to New Amsterdam will be rehabilitated
The Inter-American Development Bank announced Wednesday the
approval of a $37.3 million low interest loan to Guyana to
rehabilitate the road system connecting Moleson Creek and New
Amsterdam, strengthen the Ministry of Public Works and
Communications and undertake technical studies for additional
improvements in surface transportation in urban and rural areas.

The rehabilitation of 86 kilometers of road by the project will
complete improvement of the eastern Atlantic shore road system
that connects the capital of Georgetown to the major population
centers on the Atlantic coast and provides the only land
transport integration link with Suriname.

The program will lower transportation costs, reduce accident
rates, improve access to agricultural production and facilitate
regional integration of Guyana and Suriname within the framework
of the Regional Infrastructure Integration in South America
(IIRSA).

Resources from the loan will also finance the continuation of an
ongoing program to strengthen the institutional capacity of the
Ministry of Public Works and Communications (MPW&C)* through its
Central Transport Planning Unit. The ministry will become better
equipped to plan, evaluate and set priorities for transportation
policies and investments. The program will also support the
ongoing implementation of the action plan of the Work Services
Group, a specialized unit responsible for road system
management, project execution, supervision and reporting of road
and bridge investment and maintenance works.

Technical studies under the program include a feasibility study
and environmental impact assessment for a new bridge across the
Demerara River, an urban transportation study for Georgetown,
and a series of preparatory studies of investments to improve
the rural transportation system. Participation of local
communities in the financing and maintenance of an improved
rural transportation system will be a priority.

The program builds on previous IDB lending programs for surface
transportation in Guyana, which totaled about $100 million
between 1992 and 2001, and it reflects the Bank's strategy to
promote sustainable growth and competitiveness through
investments in critical infrastructure.

Earlier this year the Bank approved two other loans to Guyana,
$28 million to strengthen fiscal management of public finances
and $24 million to improve health service delivery.

The loans have a 40-year term, with a 10-year grace period, at
an annual interest rate of 1 percent during the grace period and
2 percent thereafter.

CONTACT: Staff Contacts
         Mr. Esteban Molfino
         Chief, Funding Section
         estebanm@iadb.org
         Tel.: +1-202-623-2369

         Ms. Laura Fan
         lauraf@iadb.org
         Tel.: +1-202-623-3772



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

LUZ Y FUERZA: Allocates $6.9M For This Year's Network Expansion
---------------------------------------------------------------
Mexico City power distributor Luz y Fuerza del Centro (LFC) will
spend MXN78 million (US$6.9mn) for this year's network
expansion, which will focus on increasing underground cable
network, reports Business News Americas.

Currently, 85% or 56,000km of the LFC network is overhead, while
the remaining 9,600km are underground.

The Comision Federal de Electricidad (CFE) has been urging LFC
to improve its finances to ensure its solvency in the long term.

In May, CFE general manager Alfredo Elias Ayub was quoted by the
local press as saying, "Luz y Fuerza should be more
conscientious of the fact that its situation is not sustainable
long term, and that it has to establish a productive and
training program to have productive figures equal to those of
the CFE." At that time, he also revealed that the government
would help LyFC out with its debt, setting aside MXN17 billion
for the purpose.



=======
P E R U
=======

AERO CONTINENTE: May Face Drug-Trafficking Probe in Ecuador
-----------------------------------------------------------
Mr. Fernando Zevallos and his airline, Aero Continente, faces
another setback after Ecuadorian anti-drug authorities disclosed
plans to launch an investigation into possible drug-trafficking
activities during the embattled airline's service in Guayaquil
and Quito.

Guayaquil's anti-drug police chief Carlos Merizalde told AP
online that his agency is coordinating with the Attorney
General's office to open a preliminary investigation into Aero
Continente's possible drug links. Mr. Merizalde adds that the
inquiry was prompted by the reopening of a drug trafficking case
where Mr. Zevallos and several others face charges for the 1995
seizure of 3 tons of cocaine in Peru.

The Peruvian businessman has been the target of numerous
investigations concerning his supposed involvement in the Latin
American drug trade. Most recently, the U.S. Treasury Department
froze his American assets along with those belonging to Aero
Continente airlines after he landed on a U.S. list of drug
kingpins.

Aero Continente has suspended flights to Ecuador and closed its
offices in Quito and Guayaquil since the blacklist.



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

UTE: Signs Accord With Argentina
--------------------------------
Uruguay's state power company UTE struck an accord with the
Argentine government Tuesday (June 15) in a move that would help
the country combat an expected energy crunch this winter.

Business News Americas reports that the agreement allows UTE to
import 200MW from Argentina for 30 days. Imports could start up
as early as June 18. UTE will pay US$8 million/month for the
power and will also be responsible for buying the fuel that
Argentine generators will use to generate the electricity.

In return, Uruguay has agreed not to go ahead with legal action
against Argentine generators for violating contracts by cutting
power exports in March.

The agreement with Argentina will result in cheaper power for
UTE than the cost of operating its La Tablada and Batlle
thermoelectric plants, but it will keep those plants running
anyway to meet domestic demand during this southern hemisphere
winter.

UTE expects to begin negotiations with the Argentine authorities
in the next few days for a more long-term solution to Uruguay's
energy needs.





                            ***********


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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
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.


* * * End of Transmission * * *