TCRLA_Public/040706.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

             Tuesday, July 6, 2004, Vol. 5, Issue 132

                            Headlines


A R G E N T I N A

BANDO DE GALICIA: Positive Restructuring Prompts Moody's Upgrade
BANCO HIPOTECARIO: Ratings Upgraded on Successful Restructuring
COMBU GAS: Prepares for Reorganization
CURTIDURIA FUENTES: Report Filing Schedule Set
DISTRISER S.R.L.: Seeks Court Approval for Reorganization

ENREFA: Debt Payments Halted, Set To Reorganize
EUROLIM: Court Orders Liquidation
FERVE: Seeks Reorganization Approval from Court
GAVELE S.A.: Seeks to Reorganize
GIAC GAS: Debt Default Prompts Reorganization Plea

HENRI BLANC: Bankruptcy Initiated by Court Order
HUEGAS S.A.: Applies for Insolvency Protection
METROGAS: Extends Solicitation of Consents to Restructure Debt
METROPOLITANO SA: Court Stops Governmental Takeover Plan
MILLICOM INTERNATIONAL: SCP to Conclude Acquisition Soon

MUTUAL DE AYUDA: Court Appoints Trustee for Reorganization
NORVEGA S.A.: Petitions Court for Reorganization Relief
PARMALAT ARGENTINA: Upcoming Sale Attracts Six Bidders
PIONERA S.A.: Court Declares Company Bankrupt
PLASTICOS PADKOVA: Liquidates Assets to Pay Debts

POLIESTIL S.A.: Court OKs Creditor's Bankruptcy Petition
PRODUCTORES HORTICOLAS: Court Issues Liquidation Ruling
RAF-KAZ: Reorganization Deteriorates To Liquidation
SERVICIOS SAN JORGE: Receives Court Bankruptcy Pronouncement
SERVI TRA: Files Petition to Reorganize

SIERRAS DEL CAUREL: Enters Bankruptcy by Court Orders
TELECOM PERSONAL: Launches $599 Debt Offer
VENDING PLUS: Claims Verification Deadline Fixed
WIRTH S.A.: Court Favors Creditor's Bankruptcy Petition
* Argentina Advances in Debt Restructuring Efforts


B R A Z I L

ELETROPAULO METROPOLITANA: Aneel Authorizes 17.9% Rate Hike
GTECH BRAZIL: S&P Revises GTECH Holdings Outlook To Stable


C O L O M B I A

AVIANCA: Strikes New Debt Accord With Unsecured Creditors


E C U A D O R

PACIFICTEL: Shrugs off La Union's Complaint
PETROECUADOR: Plans to Float Shares in International Exchanges


M E X I C O

GRUPO MEXICO: Asarco, Workers Fail to Reach New Labor Contract
GRUPO SIMEC: Notifies SEC of Late Filing, Financial Info Pending
MEXICANA DE AVIACION: Predicts Swing to Positive This Year
* WB Board Approves $330M Worth of Loans to Mexico


P E R U

AERO CONTINENTE: U.S. Agents Called to Testify in Zevallos Trial


     - - - - - - - - - -


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

BANDO DE GALICIA: Positive Restructuring Prompts Moody's Upgrade
----------------------------------------------------------------
Moody's Investors Service upgraded Argentine bank Banco de
Galicia's long term foreign currency bond rating to Caa1, from
Ca, and then will subsequently withdraw the rating. The upgrade
follows the bank's successful restructuring of its foreign
currency debt with external creditors and the bank's improved
financial profile as a result of the restructuring.

In the meantime, Moody's affirmed its global scale ratings for
Banco Galicia, including the E financial strength rating (BFSR)
and long and short term foreign currency deposit ratings of Caa2
and Not Prime, respectively. The E BFSR reflects the bank's weak
intrinsic performance and volatile operating environment.

Banco de Galicia y Buenos Aires SA (GALI.BA), the main unit of
Argentine financial services company Grupo Galicia
Financiero(GGAL), registered a loss of ARS100.92 million in the
first quarter of 2004.

CONTACTS: BANCO DE GALICIA Y BUENOS AIRES
          Tte Gral Juan D Peron 407
          Buenos Aires
          Argentina
          C1038AAI
          Phone: +54 11 6329 0000
          Fax: +54 11 6329 6100

          or

          Mr. Pedro Richards
         +54 11434 343-7528
   
          Web Site: http://www.bancogalicia.com.ar


BANCO HIPOTECARIO: Ratings Upgraded on Successful Restructuring
---------------------------------------------------------------
Argentine bank Banco Hipotecario had its long term foreign
currency bond rating upgraded to Caa1 from Ca by international
ratings agency Moody's. The move came after the bank
successfully restructured its foreign currency debt with
external creditors and the bank's improved financial profile as
a result of the restructuring. The agency said it will now
withdraw the rating due to the agency's policies.

Meanwhile, Moody's affirmed its global scale ratings for Banco
Hipotecario, including the E financial strength rating (BFSR)
and long and short term foreign currency deposit ratings of Caa2
and Not Prime, respectively. The E BFSR reflects the bank's weak
intrinsic performance and volatile operating environment.

Banco Hipotecario is Argentina's largest mortgage lender and it
is also one of the country's largest banks.


COMBU GAS: Prepares for Reorganization
--------------------------------------
The civil and commercial tribunal of La Plata issued a
resolution opening the reorganization of Combu Gas S.A. This
pronouncement authorizes the Company to begin drafting a
settlement proposal with its creditors in order to avoid
liquidation.

The reorganization further allows Combu Gas to retain control of
its assets subject to certain conditions imposed by Argentine
law and the oversight of the court appointed trustee.

Ms. Susana Mabel Costa will serve as trustee during the course
of the reorganization. She will be validating creditors' proofs
of claims until August 12, 2004.

The Company will present the completed settlement proposal to
its creditors during the informative assembly scheduled on May
17, 2005.

CONTACT: Combu Gas S.A.
         Calle 120 Esquina 526
         La Plata

         Ms. Susana Mabel Costa, Trustee
         Calle 43 Nro. 1535
         La Plata


CURTIDURIA FUENTES: Report Filing Schedule Set
----------------------------------------------
Mr. Baldomero Oscar Gonzalez Herrera, the trustee assigned to
supervise the liquidation of Curtiduria Fuentes S.R.L., will
submit the validated individual claims for court approval on
September 21, 2004, reports Infobae. These reports explain the
basis for the accepted and rejected claims. In addition, the
trustee will also submit a general report on November 3, 2004.

CONTACT: Mr. Baldomero Oscar Gonzalez Herrera, Trustee
         Avd de Mayo 1260
         Buenos Aires


DISTRISER S.R.L.: Seeks Court Approval for Reorganization
---------------------------------------------------------
Distriser S.R.L. of Buenos Aires has requested for
reorganization after failing to pay its liabilities, reports
Infobae. The reorganization petition, once approved by the
court, will allow the company to negotiate a settlement with its
creditors in order to avoid a straight liquidation.

CONTACT: Distriser S.R.L.
         Hipolito Yrigoyen 1116
         Buenos Aires


ENREFA: Debt Payments Halted, Set To Reorganize
-----------------------------------------------
The civil and commercial tribunal of Buenos Aires is currently
reviewing the merits of a petition to reorganize submitted by
Enrefa S.A.I.C. Infobe recalls that the company filed the
petition following cessation of debt payments. Once the
reorganization is approved, the court will appoint a trustee to
supervise the insolvency proceedings.

CONTACT: Enrefa S.A.I.C.
         Avda General Mosconi 3383
         Buenos Aires


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

Infobae reports that the court appointed Mr. Orlando Omar Vegega
as trustee. He will be reviewing creditors' proofs of claims
until September 7, 2004. The verified claims will serve as basis
for the individual reports to be presented for court approval on
October 20, 2004. Afterwards, the trustee will also submit a
general report on December 1, 2004.

CONTACT: Mr. Orlando Omar Vegega, Trustee
         Aguirre 666
         Buenos Aires


FERVE: Seeks Reorganization Approval from Court
-----------------------------------------------
Ferve S.R.L. of Buenos Aires has submitted a reorganization plea
to the Buenos Aires civil and commercial tribunal, says Infobae.
The request for insolvency protection comes after the Company
defaulted on its debt payments.

The reorganization petition, if granted by the court, will allow
Ferve to negotiate a settlement with its creditors in order to
avoid a straight liquidation.

CONTACT: Ferve S.R.L.
         Jose Cubas 4074
         Buenos Aires


GAVELE S.A.: Seeks to Reorganize
--------------------------------
Buenos-Aires based company Gavele S.A. filed for insolvency
protection after defaulting on its debt payments. Under
insolvency, the company will be able to propose a settlement
plan to its creditors in order to avoid liquidation.

CONTACT: Gavele S.A.
         Jose P Varela 3846
         Buenos Aires


GIAC GAS: Debt Default Prompts Reorganization Plea
--------------------------------------------------
The Buenos Aires civil and commercial tribunal is now analyzing
whether to grant Giac Gas S.A. approval for its petition to
reorganize. Infobae recalls that the company filed a "Concurso
Preventivo" petition following cessation of debt payments.

CONTACT: Giac Gas S.A.
         Tucuman 1516
         Buenos Aires


HENRI BLANC: Bankruptcy Initiated by Court Order
------------------------------------------------
Henri Blanc S.A. will enter bankruptcy protection after a local
court in Mar del Plata ordered the company's liquidation. The
bankruptcy order effectively transfers control of the company's
assets to Mr. Alberto Jose Iturralde, the court-appointed
trustee, who will supervise the liquidation proceedings.

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. Infobae reveals that the individual
reports will be submitted on August 20, 2004 followed by the
general report, which is due on October 1, 2004.

CONTACT: Henri Blanc S.A.
         Santa Fe 1362
         Mar del Plata

         Mr. Alberto Jose Iturralde, Trustee
         25 de Mayo 2980
         Mar del Plata


HUEGAS S.A.: Applies for Insolvency Protection
----------------------------------------------
Huegas S.A. is awaiting the decision of the Buenos Aires civil
and commercial tribunal regarding its request for insolvency
protection. The opening of the Company's reorganization will
serve to suspend or stay activity against the debtor by
interested parties.

CONTACT: Huegas S.A.
         Rivadadavia 8348
         Buenos Aires


METROGAS: Extends Solicitation of Consents to Restructure Debt
--------------------------------------------------------------
Metrogas S.A. said it is further extending its solicitation from
holders of its 9-7/8% Series A Notes due 2003, its 7.375% Series
B Notes due 2002 and its Floating Rate Series C Notes due 2004
and other unsecured debt to July 16, 2004.

In a release issued Friday, the Argentine natural gas
distributor said holders of the Company's existing bank debt are
committed to execute an out-of-court organization agreement
(APE) until 5 p.m. EDT on July 16, unless further extended by
the Company. The solicitation remains subject to all terms and
conditions described in the Company's Nov. 7 solicitation
statement, except debt holders can be released from their
obligation on the new expiration date.

As of 5:00 p.m., July 1, 2004, powers of attorney and support
agreements had been received with respect to approximately
$109.6 million principal amount of existing debt. A company
spokeswoman said the Company has total debt of $430 million.

The Information Agent for the APE Solicitation outside Argentina
is GBR Information Services and its telephone number is (212)
644-1772.  The Information Agent within Argentina is JP Morgan
Chase Bank Buenos Aires Branch and its telephone number is 5411-
4348-3475/4325-8046.

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


METROPOLITANO SA: Court Stops Governmental Takeover Plan
--------------------------------------------------------
An Argentine court issued an injunction to stop the government
from taking over rail operator Metropolitano SA, according to a
La Nacion report. The government decided to revoke Metropolitano
concession for failing to provide adequate security and service
on the San Martin line, which runs from downtown Buenos Aires to
the northern outskirts. But Buenos Aires city judge Claudia
Rodriguez Vidal ordered the government to stop all procedures to
take over the Company pending a hearing to be held this week to
review the Company's argument contesting cancellation of the
contract.

Disappointed with the court's decision, the government said the
judge should have heard the government's case for revoking the
concession before issuing the injunction. The government said it
would appeal the ruling.


MILLICOM INTERNATIONAL: SCP to Conclude Acquisition Soon
--------------------------------------------------------
An executive of Millicom International Cellular expects
Argentine investment group Sociedad Comercial del Plata (SCP) to
wrap its US$2 million purchase of 65% of the Argentine telecoms
operator Millicom within one month, reports Business News
Americas.

Millicom marketing manager Ignacio Nores said the deal is
subject to regulatory approvals and if completed would give SCP
100% control of the local operations. There would be a brand
name change fairly soon, Mr. Nores added.

Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16
cellular operations and licenses in 15 countries. The Group's
cellular operations have a combined population under license of
approximately 387 million people.

CONTACT: Millicom International Cellular S.A.
          75 Route de Longwy
          L-8080 Bertrange
          Luxembourg

          Tel: +352 27 759 101
          Fax: +352 27 759 359

          Web Site: www.millicom.com


MUTUAL DE AYUDA: Court Appoints Trustee for Reorganization
----------------------------------------------------------
Mutual de Ayuda entre Bomberos Voluntarios, Asociados y
Afiliados a Cajas de Prevision Social, based in Zarate-Campana,
is ready to start its reorganization after the city's civil and
commercial tribunal appointed accounting firm Estudio Abella,
Fernandez Martinez y Asociados to supervise the proceedings as
trustee.

An Infobae report states that the firm will verify creditors
claims until October 4, 2004. Afterwards, it will present these
claims as individual reports for final review by the court on
November 17, 2004. The firm will also provide the court with a
general report pertaining to the reorganization on February 1,
2005.

The informative assembly, the final stage of the reorganization,
is scheduled on September 5, 2005.

CONTACT: Estudio Abella, Fernandez Martinez y Asociados
         Trustee
         Avda Mitre 940
         Zarate-Campana


NORVEGA S.A.: Petitions Court for Reorganization Relief
-------------------------------------------------------
Morvega S.A. of Buenos Aires has requested for reorganization
after failing to pay its liabilities, states Infobae. The
reorganization petition, once approved by the court, will allow
the company to negotiate a settlement with its creditors in
order to avoid a straight liquidation.

CONTACT: Norvega S.A.
         Avenida General Mosconi 3383
         Buenos Aires


PARMALAT ARGENTINA: Upcoming Sale Attracts Six Bidders
------------------------------------------------------
Six groups have emerged as potential bidders for the Argentine
unit of the insolvent Italian dairy giant Parmalat, reports Dow
Jones Newswires. The interested groups are Canadian dairy giant
Saputo Inc., Coinvest, American Invest Group, Dolphin Fund and
Pegasus. The U.K.'s HSBC Holdings (HBC) is also interested but
as a minority shareholder, while its partner remains unknown.

Parmalat SpA opened the bidding for its Argentine and Uruguayan
operations in early May and the deadline for bids to be
submitted to the Milan office of auditing firm KPMG (KPM.XX),
who is managing the sale, was May 21. According to a source, the
Italian parent aims to lock in the sale of its Argentine unit
before August 1.

Parmalat Argentina has remained unfazed by the crisis that has
rocked its Italian parent. The unit's 2003 revenue was ARS190
million ($1=ARS2.955).


PIONERA S.A.: Court Declares Company Bankrupt
---------------------------------------------
Judge Gutierrez Cabello of Buenos Aires Court No. 7 declared
local company Pionera S.A. bankrupt, relates Argentine daily La
Nacion. The court approved the bankruptcy petition filed by Mr.
Pablo Fraguio, to whom the Company failed to pay debts amounting
to US$7,290.

The Company will undergo the bankruptcy process with Mr. Miguel
Angel Lostau as its trustee. Creditors are required to present
their proofs of claims to the trustee for verification before
September 9, 2004.

Clerk No. 14, Dr. Giardinieri, assists the court on the case.

CONTACT: Pionera S.A.
         Avenida de Mayo 1370
         Buenos Aires
   
         Mr. Miguel Angel Lostau, Trustee
         Viamonte 993
         Buenos Aires


PLASTICOS PADKOVA: Liquidates Assets to Pay Debts
-------------------------------------------------
Buenos Aires based Plasticos Padkova S.R.L. will begin
liquidating its assets following the pronouncement of the city's
civil and commercial tribunal that the company is bankrupt,
reports Infobae. The bankruptcy ruling places the company under
the supervision of court-appointed trustee, Mr. Aldo Ruben
Maggiolo. The trustee will verify creditors' proofs of claims
until July 16, 2004. Afterwards, the validated claims will be
presented in court as individual reports on September 13, 2004.

Mr. Maggiolo will also submit a general report, containing a
summary of the company's financial status as well as relevant
events pertaining to the bankruptcy, on October 26, 2004.

The bankruptcy process will end with the disposal of company
assets in favor of its creditors.

CONTACT: Mr. Aldo Ruben Maggiolo, Trustee
         Paraguay 610
         Buenos Aires


POLIESTIL S.A.: Court OKs Creditor's Bankruptcy Petition
--------------------------------------------------------
Poliestil S.A. entered bankruptcy after Judge di Noto of Buenos
Aires Court No. 15 approved a bankruptcy motion filed by Mr.
Gaston Martinez, reports La Nacion. The Company's failure to pay
US$5,218.75 in debt prompted the creditor to file the petition.

Working with Dr. Tevez, the city's Clerk No. 29, the court
assigned Mr. Roberto Hermida as trustee for the bankruptcy
process. The trustee's duties include the authentication of the
Company's debts and the preparation of the individual and
general reports. Creditors are required to present their proofs
of claims to the trustee before September 16, 2004.

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

CONTACT: Poliestil S.A.
         Constitucion 2647
         Buenos Aires

         Mr. Roberto Hermida, Trustee
         Tucuman 1668
         Buenos Aires


PRODUCTORES HORTICOLAS: Court Issues Liquidation Ruling
-------------------------------------------------------
The civil and commercial tribunal of Bahia Blanca ordered the
liquidation of Productores Horticolas Asoc. S.R.L. after the
company defaulted on its obligations, Infobae reveals. The
liquidation pronouncement will effectively place the company's
affairs as well as its assets under the control of Mr. Carlos A.
Gurovich, the court-appointed trustee. Mr. Gurovich will verify
creditors' proofs of claims until August 23, 2004.

CONTACT: Productores Horticolas Asoc. S.R.L.
         Hipolito Yrigoyen 1226 Coronel Suarez
         Bahia Blanca

         Mr. Carlos A Gurovich, Trustee
         Moreno 317
         Bahia Blanca


RAF-KAZ: Reorganization Deteriorates To Liquidation
---------------------------------------------------
The reorganization of Raf-Kaz S.R.L. has progressed into
bankruptcy. Argentine news source Infobae relates that the
Buenos Aires civil and commercial tribunal issued the "Quiebra
Decretada" ruling. The report adds that the court assigned Mr.
Oscar Chapiro as trustee, who will verify creditors' proofs of
claim until August 13, 2004.

The court also ordered the trustee to prepare individual reports
after the verification process is completed, and have them ready
by September 28, 2004. A general report on the bankruptcy
process is expected on November 10, 2004.

Creditors of the company will validate the completed settlement
proposal during the informative assembly on May 31, 2004.

CONTACT: Mr. Oscar Chapiro, Trustee
         Scalabrini Ortiz 151
         Buenos Aires


SERVICIOS SAN JORGE: Receives Court Bankruptcy Pronouncement
------------------------------------------------------------
Seguridad y Servicios San Jorge S.A. is set to begin liquidation
proceedings after a local court in Buenos Aires issued a
bankruptcy ruling against the company, Infobae relates.

The bankruptcy order places the company under the direction of a
court-appointed trustee who will oversee the liquidation of the
company's assets.

CONTACT: Seguridad y Servicios San Jorge S.A.
         Constitucion 2769
         Buenos Aires


SERVI TRA: Files Petition to Reorganize
---------------------------------------
Servi Tra S.A., a company operating in Buenos Aires filed a
"Concurso Preventivo" motion, reports Argentine daily Infobae.
The Company is seeking to reorganize its finances following
cessation of debt payments. Upon approval of the reorganization
request, the Company will be given time to create a settlement
plan for its creditors.

CONTACT: Servi Tra S.A.
         Avenida Cordoba 659
         Beunos Aires


SIERRAS DEL CAUREL: Enters Bankruptcy by Court Orders
-----------------------------------------------------
A local court in Buenos Aires declared Sierras del Caurel S.A.
bankrupt after the company defaulted on its debt payments, says
Infobae. The order effectively places the company's affairs as
well as its assets under the control of court-appointed trustee,
Mr. Juan Carlos Sosa.

As trustee, Mr. Sosa is tasked with verifying the authenticity
of claims presented by the company's creditors. The verification
phase is ongoing until August 31, 2004.

Following claims verification, the trustee will submit the
individual reports based on the forwarded claims for final
approval by the court on October 12, 2004. A general report will
also be submitted on November 23, 2004.

CONTACT: Mr. Juan Carlos Sosa
         Viamonte 783
         Buenos Aires


TELECOM PERSONAL: Launches $599 Debt Offer
------------------------------------------
Argentine cellular phone company Telecom Personal commenced
Friday an out-of-court proposal to restructure US$599 million in
debt, reports Dow Jones Newswires. The proposal, known in
Spanish as APE, will run until July 30.

Telecom Personal is offering three alternatives. The first
option allows bondholders to swap old debts for a cash payment
and new bonds coming due in 2008, 2014 and 2017, with no nominal
haircut. The second choice is a cash payment and a 2009 bond
with a nominal haircut of about 13%. The final option is a cash
payment worth between 65% and 75% and set through a Dutch
auction.

In an APE, agreement from creditors representing two-thirds of
the debt allows a company to submit the proposal for legal
approval, which then makes the terms binding on all creditors.

Telecom Personal is a unit of Telecom Argentina (TEO), a fixed-
line carrier, which launched its own for US$2.63 billion in debt
on June 22. That proposal expires July 21. Both restructurings
are not dependent on one another.


VENDING PLUS: Claims Verification Deadline Fixed
------------------------------------------------
The verification of claims for the Vending Plus S.A. bankruptcy
will end on September 10, 2004 according to Argentine news
source Infobae. Creditors with claims against the bankrupt
company must present proof of the liabilities to Ms. Lea Beatriz
Aljanati, the court-appointed trustee, before the said deadline.

CONTACT: Vending Plus S.A.
         Quesada 2448
         Buenos Aires

         Ms. Lea Beatriz Aljanati, Trustee
         Avda Honorio Pueyrredon 1576
         Buenos Aires


WIRTH S.A.: Court Favors Creditor's Bankruptcy Petition
-------------------------------------------------------
A.G.A. S.A. successfully sought for the liquidation of Wirth
S.A. after Judge Gutierrez Cabello declared the company
bankrupt, reports La Nacion. The creditor sought for the
Company's bankruptcy after the latter failed to pay debts
amounting to US$9,488.87.

As such, the Company will now begin the bankruptcy process with
Mr. Jorge Alvarez as trustee. Creditors of the Company must
submit their proofs of claim to the trustee before August 23,
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.

Dr. Giardinieri, Clerk No. 7, assists the court on the case.

CONTACT: Wirth S.A.
         Parana 567
         Buenos Aires

         Mr. Jorge Alvarez, Trustee
         Bartolome Mitre 1738
         Buenos Aires


* Argentina Advances in Debt Restructuring Efforts
--------------------------------------------------
Argentina made progress in its efforts to get regulatory
approval in the U.S. for a debt exchange to restructure some
US$100 billion in defaulted debt. According to a Dow Jones
Newswires report, the ailing government has filed a shelf
registration statement with the U.S. Securities and Exchange
Commission. All that is now needed for the exchange to take
place, according to a senior Ministry official, is for the SEC
and other foreign regulators to approve the planned offering.

The Ministry anticipates receiving their responses "some time in
July and August" and that this would mean the offering would go
to market in September, the official said, adding that the
government's proposal, as outlined in an earlier 18-K/A
statement filed with the SEC on June 10, was the "final
offering."

Meanwhile, the International Monetary Fund hopes to make
significant progress in talks with Argentina to complete an
economic review of its debt-ridden economy, IMF Managing
Director Rodrigo Rato said on Friday.
  
Argentina is struggling to agree a deal with creditors to
restructure nearly US$100 billion in defaulted debt. Bondholders
hit by the largest sovereign default in history have been unpaid
since Argentina's economic crisis in late 2001.

The IMF is due to resume discussions to complete an economic
review on Argentina this week. Approval of the review, the third
in the country's three-year, US$13-billion program with the IMF,
would free loans for US$735 million.



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

ELETROPAULO METROPOLITANA: Aneel Authorizes 17.9% Rate Hike
-----------------------------------------------------------
Brazil's biggest power distributor Eletropaulo Metropolitana SA
(ELPL4 BS) received approval from the electricity regulator to
increase rates by 17.9%, says Bloomberg.

On its Web site, the regulator Aneel said the utility, a unit of
U.S. energy firm AES Corp (AES.N), would have been entitled to
an 18.6% increase had Cia. Energetica de Sao Paulo (CESP),
Eletropaulo's supplier, not delayed payments of certain
maintenance and fuel fees to the government.

Both AES and the unit have restructured their debts since and
analysts say Eletropaulo has good prospects.

CONTACT:  ELETROPAULO METROPOLITANA
          Avenida Alfredo Egidio de Souza Aranha 100-B,
          13 andar 04726-270 San Paulo
          Brazil
          Phone: +55-11-548-9461, +55 11 5696 3595
          Fax: +55-11-546-1933
          URL: http://www.eletropaulo.com.br
          Contacts:
          Luiz D. Travesso, Chairman and President
          Orestes Gonzalves Jr., VP Finance/Investor Relations


GTECH BRAZIL: S&P Revises GTECH Holdings Outlook To Stable
----------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
on-line lottery systems operator GTECH Holdings Corp. to stable
from positive. At the same time, Standard & Poor's affirmed its
'BBB' corporate credit rating and senior unsecured debt ratings
on the West Greenwich, R.I.-based company. Total debt was
approximately $460 million at May 29, 2004.

The outlook revision reflects Standard & Poor's assessment that
given the previously-announced legal action, and subsequent
injunction that is currently being initiated against the
company's subsidiary in Brazil, it would be unlikely that
ratings would be raised until such a time that further clarity
on the matter is obtained. This assessment comes despite the
company's consolidated operating performance remaining solid,
resulting in credit measures that are good for the rating.

In Brazil, a civil action has been initiated against GTECH
Brazil by the Public Ministry in the Federal Court of Brasilia.
The civil action contends that GTECH was overpaid for the
services provided to Caixa Economica Federal (Caixa), its
lottery customer in Brazil, associated with its lottery
contracts that covered the period beginning in 1997 through the
present. The suit seeks to invalidate the company's current
contract and to impose penalties equal to the sum of all amounts
paid to GTECH since the beginning of 1997 to present. These
costs are estimated to be in excess of $600 million. Given that
GTECH Brazil does not have adequate in-country assets to satisfy
the potential claim should the plaintiff prevail in this suit, a
procedural injunction was recently issued ordering that 30% of
payments due to GTECH from Caixa will be withheld and deposited
in an account maintained by the court.

In addition, the court ordered that all assets of GTECH Brazil
be frozen so as to prevent their transfer or disposition. "If
GTECH had to pay the proposed amount today, the ratings may be
negatively affected," said Standard & Poor's credit analyst
Michael Scerbo. However, the company does not agree with the
action and intends to defend its position. "Any future judgments
against GTECH are not factored into the ratings at this time."

CONTACT: Michael Scerbo, New York (1) 212-438-7858



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

AVIANCA: Strikes New Debt Accord With Unsecured Creditors
---------------------------------------------------------
Heavily indebted Colombian airline Avianca reached a new
agreement to pay its unsecured creditors at least US$55 million
under a plan to exit bankruptcy, reports Bloomberg. According to
Brian P. Hall, the Company's bankruptcy lawyer, Avianca will
likely file a final version of the plan by July 16. The lynchpin
of the plan will be the sale of 75% of Avianca's equity to
OceanAir Linhas Aereas for US$44.5 million.

"This is an agreement that has the support of the shareholders,
the unsecured creditors committee, the debtor and OceanAir,"
Michael Kessler, a lawyer representing Avianca's shareholders
said.

The committee supports the OceanAir investment, said Richard
Miller, the lawyer representing the unsecured creditors.

Unsecured creditors will be paid in nine installments, beginning
with a US$10 million payment on the effective date of the plan,
Mr. Kessler said. The effective date will be on or before Dec.
15, provided the U.S. Bankruptcy Court in New York approves the
plan.

Unsecured creditors will also receive 15% of reorganized
Avianca's earnings before interest, tax, depreciation, and
amortization in 2009 and 2010, according to Mr. Kessler.

Founded in 1919, Avianca says it is the world's second-oldest
airline after Dutch carrier KLM. It is also Colombia's biggest
commercial carrier with 290 flights a day and service to 17
destinations abroad.

After years of losses, the Company posted a first-quarter profit
of about US$18 million, compared with losses of nearly US$25
million a year earlier.



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

PACIFICTEL: Shrugs off La Union's Complaint
-------------------------------------------
Ecuadorian state telephone company Pacifictel does not plan to
alter its insurance contract with Rocafuerte-SulAmerica despite
a complaint by its former insurer La Union, according to
Pacifictel press director Fernando Naranjo. Rocafuerte-
SulAmerica recently became Pacifictel's insurer, replacing La
Union, whose contract was cancelled because of a controversy
over its coverage terms. The decision to choose Rocafuerte-
SulAmerica, however, led La Union to issue a complaint to
Pacifictel's board.

But according to Naranjo, La Union was under a restriction of
the insurance regulator until the end of July, preventing it
from offering fire insurance coverage. This along with other
factors led Pacifictel to award the contract to Rocafuerte-
SulAmerica, as their offer was the most suitable for the telecom
company, the press director added.

The new contract will save Pacifictel around US$1.7 million in
comparison with the contract held with La Union.


PETROECUADOR: Plans to Float Shares in International Exchanges
--------------------------------------------------------------
Ecuadorian authorities plan to revitalize state-oil company
Petroecuador by taking measures parallel to those of Petroleo
Brasileiro (Petrobras)beginning with the floating of some of the
Company's shares on local and international stock exchanges,
says Dow Jones Newswires.

"Petrobras is a very strong company in the region and has an
important international presence; in the past it has had similar
problems as Petroecuador but it managed to put in place a model
of efficient management, which is the route that Petroecuador
should take," commented Ecuador's Energy Minister Eduardo Lopez
in the report.

Along these lines, the administration intends to commission
special audits by August aimed at identifying the Company's
problems and finding optimum solutions to increase its
productivity.

Mr. Lopez expressed that the government will complement these
changes with reforms in the special law governing Petroecuador.
Further, the administration will advocate changes in Ecuador's
Fuel Law that will provide judicial security for companies
entering into joint ventures with Petroecuador for production at
state-owned oil fields.



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

GRUPO MEXICO: Asarco, Workers Fail to Reach New Labor Contract
--------------------------------------------------------------
Grupo Mexico's Phoenix, Arizona-based mining unit Asarco and
more than 800 unionized workers are yet to come up with a new
labor agreement, according to a negotiator Friday. The labor
contracts between the Mexican mining giant and the United
Steelworkers of America, Operating Engineers Union Local 428,
Teamsters Local Union 104 and the International Brotherhood of
Electrical Workers expired at midnight Wednesday. The two sides
attempted to negotiate Wednesday night but failed to resolve
work issues.

"They're trying to get us to accept big concessions. We don't
think they're justified," Terry Bonds, chairman of the
bargaining committee representing Asarco workers, said in
referrence to Asarco's proposal to cut wages by US$0.20 to
US$5.00 per hour, lower pension benefits substantially and raise
employee contributions for health insurance.

"We're looking for long-term viability, to compete in the global
market when costs in the U.S. are always higher," defended Juan
Rebolledo, vice president of international affairs for Grupo
Mexico SA (GMEXICO.MX).

Mexico City-based Grupo Mexico bought Asarco in 1999 for US$2.2
billion. Asarco's operations posted a net loss of US$120.7
million in 2003. The mines are currently being stripped, which
is a slow and capital-intensive process.

CONTACT:  GRUPO MEXICO S.A. DE C.V.
          Avenida Baja California 200,
          Colonia Roma Sur
          06760 Mexico, D.F., Mexico
          Phone: +52-55-5264-7775
          Fax: +52-55-5264-7769
          Home Page: http://www.gmexico.com
          Contacts:
          Germ n Larrea Mota-Velasco, Chairman and CEO
          Xavier Garca de Quevedo Topete, President and COO
          Alfredo Casar Perez, COO, Ferrocarril Mexicano
          Daniel Chavez Carren, COO, Industrial Minera Mexico
          Daniel Tellechea Salido, VP and Administration and
                                         Finance President


GRUPO SIMEC: Notifies SEC of Late Filing, Financial Info Pending
----------------------------------------------------------------
The Company is unable to file the Form 20-F for the year ended
December 31, 2003 by June 30, 2004 without undue effort and
expense because it has been unable to timely gather all
financial information necessary to prepare a reconciliation of
its net income and shareholders' equity to U.S. Generally
Accepted Accounting Principles.

CONTACT: Grupo Simec
         Calzada Lazaro Cardenas 601
         Guadalajara
         Mexico 44910

         USA
         Phone: 52-3-678-59-11


MEXICANA DE AVIACION: Predicts Swing to Positive This Year
----------------------------------------------------------
Mexicana de Aviacion SA, Mexico's second largest airline,
expects to return to profitability this year following an
improvement in sales and an aggressive cost-reduction program,
Dow Jones Newswires reports, citing an airline executive.

According to Mexicana's Chief Executive Officer Emilio Romano,
rising business travel and tourism is boosting Mexicana's
revenue while the Company has cut fuel and maintenance costs by
upgrading its fleet.

Mexicana de Aviacion and its main competitor, AeroMexico, are
both owned by state-controlled holding company Cintra SA
(CINTRA.MX). The government took over the airlines following
Mexico's 1994 debt crisis.

Cintra posted net losses of MXN2.13 billion ($1=MXN11.45) in
2003 and MXN1.73 billion in 2002.

CONTACT:  CINTRA S.A. de C.V.
          Av Xola 535 piso 16 col. del Valle
          Mexico DF
          Tel. (5)448 - 8000
          E-mail: infocintra@cintra.com.mx


* WB Board Approves $330M Worth of Loans to Mexico
--------------------------------------------------
The World Bank Board of Executive Directors approved Thursday,
July 1, 2004, two loans for a total of $330 million for Mexico
to expand access to justice services in the states and support
basic education for poor and vulnerable groups.

The first loan, for $30 million, will finance the State Judicial
Modernization Supporting Access to Justice Project, which will
support judicial reform efforts in states including
Aguascalientes, Guanajuato, Jalisco and Puebla, through the
credit program for state judicial modernization of the Banco
Nacional de Obras y Servicios Publicos, S.N.C. (BANOBRAS).  
State courts currently handle about 80 percent of all judicial
cases in Mexico.

"Judicial reform is one of the most important economic reforms
in Mexico," said Isabel Guerrero, World Bank Director for Mexico
and Colombia. "A judicial system that provides timely, efficient
and accessible services to a diverse society and that can meet
changing economic needs is a prerequisite for improving
governance, promoting economic development and foreign
investment, and curbing corruption and violence."

The new loan will support:

- Access to justice for all. This includes women, young people,
and indigenous groups;

- Strengthening institutional capabilities, organizational
culture, and knowledge of judicial services;

- Improving the efficiency and effectiveness of judicial
services;

- Increasing judicial transparency.

"This project will directly benefit users of state courts and
increase access to justice for socially and economically
vulnerable groups," said Waleed Haider Malik, World Bank task
manager for the project. "It will help strengthen state justice
systems."

The fixed-spread specific investment loan in US dollars is
repayable in 15 years, with a five-year grace period.  The total
project cost is $37.5 million, including expected financing from
BANOBRAS and others of $7.5 million.

Basic Education Development Program

The second loan approved today was for $300 million to support
Mexico's Basic Education Development Program.  The program
supports education for disadvantaged groups, such as children
living in rural or marginal urban areas, and handicapped,
migrant and indigenous children.

The loan will support the third and final phase of the Basic
Education Development Program, which the World Bank has been
supporting since its inception in 1991.  The first two phases of
this program achieved improvements in education for around 6
million children (20 percent of whom are indigenous) in 31
states; strengthened management of the education system; and
enhanced the states' institutional capacity to deliver education
services.

During the first two phases, completion rates of indigenous
primary schools rose to 82 percent (from 64 percent in 1995);
completion rates of non-indigenous primary schools rose to 86
percent (from 82 percent in 1995); enrollment in telesecundaria
(secondary education delivered via satellite to remote
communities) increased by 48 percent, with more than 800,000
students enrolled; and school autonomy increased by 24 percent.

"Raising the level and quality of schooling is a priority for
Mexico," said Harry Anthony Patrinos, World Bank task manager
for the project. "By increasing schooling opportunities for
children in the poorest, most educationally disadvantaged
communities, this project will assist the Government of Mexico's
efforts to reduce poverty and inequality."

The third phase of the program, supported by the $300 million
loan, has the following objectives:

- To expand quality improvements in preschool, primary and lower
secondary education;

- To continue strengthening the institutional capacity of the
states to plan, program and evaluate the delivery of basic
education services.

The fixed-spread adaptable program loan in US dollars is
repayable in 15 years, with a five-year grace period. The total
project cost is $500 million, including expected financing from
the Government of Mexico of $200 million.

CONTACTS: Mexico
          Ms. Gabriela Aguilar
         (5255) 54-80-4252
          Gaguilar2@worldbank.org

          Washington
          Ms. Alejandra Viveros
         (202) 473-4306
          Aviveros@worldbank.org

          Web Site: www.worldbank.org



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

AERO CONTINENTE: U.S. Agents Called to Testify in Zevallos Trial
----------------------------------------------------------------
Three U.S. Drug Enforcement Administration agents have been
asked to appear before Lima's First Penal Court to testify in a
drug trafficking trial involving Mr. Fernando Zevallos, the
founder of Peru's largest carrier, Aero Continente.

Associated Press identified Mr. David Klein, Mr. Jeffrey Newland
and Mr. Paul Hackett as the U.S. agents who will be asked to
provide evidence implicating Mr. Zevallos in a 1995 cocaine bust
in northern Peru. The agents will also answer questions
concerning the businessman's ties with Colombian and Mexican
drug kingpins as well as clarify allegations that Mr. Zevallos
founded Aero Continente from drug earnings.   

Prosecutors believe Mr. Zevallos hid US$43.5 million worth of
drug money in Aero Continente transactions between 1992 and
1995. The prosecutors say that the money went into the purchase
of 12 jets for the airline.   

Mr. Zevallo's drug links has hurt Aero Continente. The United
States government has frozen the airline's American assets after
Mr. Zevallo's inclusion in a list of international drug
traffickers. However, after more than 30 DEA investigations, the
Peruvian businessman denies all drug trafficking charges.


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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Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
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Copyright 2004.  All rights reserved.  ISSN 1529-2746.

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