TCRLA_Public/040707.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

             Wednesday, July 7, 2004, Vol. 5, Issue 133

                            Headlines

A R G E N T I N A

EMPRENDIMIENTOS GASTRONOMICOS: Enters Bankruptcy Protection
ESTABLECIMIENTOS OPTICOS: Trustee Ends Claims Verification Phase
GAS ARGENTINO: Fitch Maintains `D(arg)' Rating on $130M of Bonds
GPCOM: Trustee to Present General Report Today
IRSA: $250M of Corporate Bonds Rated `B(arg)' by Fitch

MENDOZA BUSATIL: Judge Approves Bankruptcy
LUIS SAENZ: Claims Validation Closes Today
MARIMART: Trustee to Wrap-Up Claims Verification Today
METROVIAS: Fitch Assigns Category 4 Ratings to Ordinary Shares
SIDECO AMERICANA: Debenture Ratings Remain in Default

TMC: Court Set to Review Creditors Claims
TURBINE POWER: Bonds Remain at Junk Level
  

B E R M U D A

SEA CONTAINERS: Settles Dispute With U.K. Strategic Rail


B O L I V I A

COEUR D'ALENE: Names Two New Senior Execs to Lead Major Projects
NON-METALLIC MINERALS: Mulls Suit Against Bolivia


B R A Z I L

PARMALAT BRAZIL: Will Receive Bankruptcy Decision This Week


C O L O M B I A

EMCALI: To Receive Financial Aid From Government


C O S T A   R I C A

ICE: Slashes Geo Budget on Aresep's Refusal to Hike Rates


D O M I N I C A N   R E P U B L I C

BANCO MERCANTIL: Audit Uncovers Big Financial Gap
* Bear Stearns Cuts DR's Rating Ahead of July 23 Bond Payment


M E X I C O

EMPRESAS ICA: Signs Memorandum of Understanding With Itinere
GRUPO TMM: Divestment of TFM Stake a Solution to Debt Problems


P E R U

AERO CONTINENTE: Certain It Will Secure New Insurance


V E N E Z U E L A

PDVSA: 30% of Investment Going to Social Development Projects

     -  -  -  -  -  -  -  -  

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

EMPRENDIMIENTOS GASTRONOMICOS: Enters Bankruptcy Protection
-----------------------------------------------------------
Judge Dieuzeide of Buenos Aires Court No. 1 declared
Emprendimientos Gastronomicos S.A. bankrupt, reports La Nacion.

The ruling comes in approval of the bankruptcy petition filed by
the Company's creditor, Mr. Sergio Engel, for nonpayment of
US$5,215.50 in debt. Clerk No. 1, Dr. Fernandez Garello, assists
the court on the case, which will conclude with the liquidation
of the Company's assets.

The trustee, Mr. Otto Munch, will examine and authenticate
creditors' claims until September 10, 2004. This is done to
determine the nature and amount of the Company's debts.
Creditors must have their claims authenticated by the trustee
before the said date in order to qualify for the payments that
will be made after the Company's assets are liquidated.

CONTACT: Emprendimientos Gastronomicos S.A.
         Avenida Udaondo 1446
         Buenos Aires

         Mr. Otto Munch, Trustee
         Maipu 509
         Buenos Aires


ESTABLECIMIENTOS OPTICOS: Trustee Ends Claims Verification Phase
----------------------------------------------------------------
Ms. Elba Bengoechea, the trustee assigned to supervise the
liquidation of Establecimientos Opticos Constelacion
S.A.I.C.I.F., will close the verification of creditors' claims
today.

After claims verification, Ms. Bengoechea will submit these
claims to the Buenos Aires Court No. 18 on September 3, 2004.
She is also obliged by the court to submit a general report on
the case on October 18, 2002

CONTACT: Ms. Elba Bengoechea, Trustee
         Jose Evaristo Uriburu 1010
         Buenos Aires


GAS ARGENTINO: Fitch Maintains `D(arg)' Rating on $130M of Bonds
----------------------------------------------------------------
Gas Argentino S.A.'s US$130 Million bond issue remains in
default. According to CNV, Fitch Argentina Calificadora de
Riesgo S.A. gave the bonds a `D(arg)' rating based on the
Company's financial status as of March 31, 2004.

The CNV described the bonds, which matured on June 30 2000, as
"Obligaciones negociables simples por U$S 130.000.000."

Fitch said that the given rating is assigned to bonds that are
in payment default or whose obligor is seeking bankruptcy
protection.

CONTACT: Gas Argentino S.A.
         Ruta 16 - km. 23,7
        (3505) - Puerto Tirol


GPCOM: Trustee to Present General Report Today
--------------------------------------------
Mr. Mauricio Federico Nudelman, the court-appointed trustee
supervising the GpCom S.R.L. bankruptcy, is scheduled to submit
a general report on the case, today, at the Buenos Aires civil
and commercial tribunal. The general report contains a summary
of significant event related to the company's bankruptcy as well
as an audit of its financial records.

CONTACT:  Gpcom S.R.L.
          Tucuman 927
          Buenos Aires

          Mr. Mauricio Federico Nudelman, Trustee
          Lavalle 2024
          Buenos Aires


IRSA: $250M of Corporate Bonds Rated `B(arg)' by Fitch
------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains the
`B(arg)' rating assigned to US$250 million of corporate bonds
issued by Argentine company IRSA Inversiones Representaciones
S.A., relates CNV, the country's securities regulator.

The rating, based on the Company's finances as of March 31,
2004, applies to bonds labeled "Programa Global de Obligaciones
Negociables". The maturity date of the bond issue is
undisclosed.

Fitch describes The `B(arg)' rating as highly speculative.
Issues with this rating pose significant credit risk.

IRSA is Argentina's largest real estate company. Its diversified
interests include the acquisition of residential and commercial
properties, land development and the operation of luxury hotels.

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


MENDOZA BUSATIL: Judge Approves Bankruptcy
------------------------------------------
Mendoza Bursatil S.A. was declared bankrupt after Judge Ferrario
of Buenos Aires Court No. 6 endorsed the liquidation petition
filed by Alfamac S.A. Argentine daily La Nacion reports that the
said creditor has claims totaling US$31,535 against the troubled
stock management company.

The court assigned Mr. Norberto Markel to supervise the
liquidation process as trustee. He will validate creditors'
proofs of claims until October 4, 2004.

Dr. Mendez Sarmiento, Clerk No. 12, assists the court on this
case.

CONTACT: Mendoza Bursatil S.A.
         Maipu 267
         Buenos Aires

         Mr. Norberto Markel, Trustee
         Tucuman 1657
         Buenos Aires


LUIS SAENZ: Claims Validation Closes Today
------------------------------------------
Creditors who fail to present proof of Luis Saenz Pena 739
S.A.'s indebtedness by today will not be able to qualify for
payments to be made from the proceeds of the Company's
liquidation. Claims for verification must be coursed through,
Ms. Lydia Elsa Albite, the court appointed trustee.

Buenos Aires Court No. 1, assisted by Clerk No. 1, has
jurisdiction over this case.

CONTACT: Ms. Lydia Elsa Albite, Trustee
         Tacuari 119
         Buenos Aires


MARIMART: Trustee to Wrap-Up Claims Verification Today
------------------------------------------------------
Creditors with outstanding claims against bankrupt Argentine
company Marimart S.A. must have presented proofs of the
Company's indebtedness to the trustee, Mr. Fabian Marcelo
Zandperl, by today in order to qualify for the payments that
will be made after the Company's assets are liquidated.

Marimart's bankruptcy case is under the jurisdiction of Buenos
Aires Court No. 3. Clerk No. 3 assists the court on this case.

CONTACT:  Marimart S.A.
          Avda. Francisco Beiro 3410/14
          Buenos Aires

          Mr. Fabian Marcelo Zandperl, Receiver
          Av Cordoba 3515
          Buenos Aires


METROVIAS: Fitch Assigns Category 4 Ratings to Ordinary Shares
--------------------------------------------------------------
Argentine public transport company Metrovias obtained a Category
4 classification of its ordinary shares from credit ratings
agency Fitch, reports Business News Americas.

Metrovias holds an exclusive concession to transport passengers
in Buenos Aires until 2017. But according to Fitch, the
uncertainty associated with the redefinition of its contract is
affecting the Company.

Metrovias, a division of local infrastructure and services
company Clisa, reported an ARS8.05 million (US$2.85m) net loss
in the first quarter of the year, wider than the ARS4.28 million
net loss it reported for the same period last year. Operating
losses widened to ARS6.89 million in the period from ARS1.73
million in 1Q03.


SIDECO AMERICANA: Debenture Ratings Remain in Default
-----------------------------------------------------
About US$200 million in debentures issued by Argentine public
services and infrastructure holding Sideco Americana remain on
default level, says credit rating agency Fitch.

Business News Americas reports that Fitch is maintaining its D
(arg) rating on the Company's credit rating reflecting Sideco's
inability to honor its debentures. At the moment, the holding is
waiting on an out-of-court settlement with creditors to
establish a new debenture payment timetable.

Creditors of the Company include Banco Ciudad of Buenos Aires,
Banco Provincia de Buenos Aires, Banco Rio de la Plata S.A.,
Banco Nacion Argentina, Banca Nazionale de Lavoro S.A., Banco de
Galica y Buenos Aires, IFC International Finance Corporation,
Pistrelli, Henry Martin y Asociados, MBA Banco de Inversiones
S.A., Klein and Franco S.C., Strat S.A., Latin American
Consulting Group, Chadbourne & Park, Fernando Carlos Munoz de
Toro, Escribana Cinque, Bolsa de Comercio de Buenos Aires,
Claudio A. Achino, Gustavo Casir, Munoz de Toro and Munoz de
Toro S.R.L., Fabian Eduardo de Aiello y Miguel Alfredo Moore.

Sideco's interests include engineering and construction firm
Iecsa, which operates in Argentina, Brazil and Chile;
environmental services (waste management) through Qualix in
Brazil; and highway concessions in Argentina (Autopistas del
Sol, Servicios Viales and Puentes de Litoral) and Brazil
(Rodovias das Colonias and Rodovia das Cataratas).


TMC: Court Set to Review Creditors Claims
-----------------------------------------
Buenos Aires Court No. 20 expects to receive the claims filed
against TMC S.A. today. Mr. Roberto Alfredo Mazzarella, the
trustee supervising the Company's ongoing liquidation, prepared
this report from creditors proofs of claims submitted during the
verification period.

CONTACT:  Mr. Roberto Alfredo Mazzarella, Receiver
          Laprida 1411
          Buenos Aires


TURBINE POWER: Bonds Remain at Junk Level
-----------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. retains a `D(arg)'
rating on US$20 million worth of corporate bonds issued by
Turbine Power Co. S.A.

The Comision Nacional de Valores (CNV) described the bonds,
which matured on November 30, 2002, as "obligaciones negociables
garantizadas".

The action was taken based on the Company's financial standing
as of March 31, 2004. Fitch assigns a `D' rating to issues that
are currently in default or whose obligor has filed for
bankruptcy. Such obligations have the lowest recovery potential.

CONTACT: Turbine Power Co. S.A.
         Reconquista 656 (C1103ABN)
         Buenos Aires
         Tel: 4315-3272/3273
         Fax: 4312-7707
         E-mail: tpc@tpc.com.ar

  

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

SEA CONTAINERS: Settles Dispute With U.K. Strategic Rail
--------------------------------------------------------
Sea Containers Ltd. (NYSE: SCRA; SCRB) a passenger and freight
transport operator, marine container lessor and leisure industry
investor, announced that its GNER railway subsidiary has signed
agreements with the U.K. Strategic Rail Authority (SRA) to
settle the SRA's claim for participation in the settlement
between GNER and Network Rail for damages arising out of the
Hatfield rail disaster in October 2000 and its aftermath.
Network Rail had earlier paid GNER 238 million pounds sterling
to cover losses. The SRA felt that GNER should contribute to it
25 million pounds of this settlement but the contractual
obligation to do so was unclear and could only have been
resolved by arbitration.

Ultimately, GNER agreed to pay 17 million pounds to the SRA out
of the Network Rail settlement, which was fully provided in the
company's 2003 financial statements. Additionally, 8 million
pounds will be paid to the SRA in monthly installments in the
period April 2005 to April 2006. In return for the additional 8
million pounds the Strategic Rail Authority has agreed to
release immediately 42 million pounds (US$76 million) of
security posted by GNER as a requirement of its franchise
agreement, to remove the SRA's right to require GNER to increase
its share capital and to indemnify GNER for the difference
between the new compensation regime stipulated by the U.K. Rail
Regulator to take effect from April 1, 2004 and the original
compensation regime in force when the franchise agreement came
into effect in 1996. The new regime is less favorable to GNER
than the original one. The compensation regimes relate to
payments made by Network Rail, the infrastructure provider, to
GNER for infrastructure failings, and bonus payments from GNER
to Network Rail when infrastructure performance exceeds defined
targets.

Mr. James B. Sherwood, President, said that GNER had agreed to
the settlement primarily because it is seeking to renew its
franchise and is bidding for two additional new franchises,
Integrated Kent and Greater Western, and it was not appropriate
to remain in dispute with the SRA during this process.

He indicated that the results of the U.K. Government's railway
review now in progress are expected during July and timing of
the bid for the renewed franchise could depend on the
government's decisions arising out of that review. It has been
widely rumored that the government will abolish the SRA and give
more powers to Network Rail but the franchise system will remain
intact.

Mr. Sherwood also announced that Ian C. Durant, 45, has been
appointed Vice President and Deputy Chief Financial Officer with
effect from June 1, 2004. Mr. Durant is a Chartered Accountant
and has held senior financial positions in the Jardine Matheson
Group in Hong Kong, including Finance Director of Hong Kong Land
Holdings and Group Finance Director of Dairy Farm International.
He is a U.K. citizen and most recently was Group Finance
Director of Thistle Hotels plc in Britain. Mr. Durant will
understudy Daniel J O'Sullivan, the company's Chief Financial
Officer who will retire at the end of 2004.

Mr. Sherwood said, "Ian Durant's international and public
company experience has prepared him well for the diverse
worldwide operations of Sea Containers and we are pleased to
welcome him to the company."

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



=============
B O L I V I A
=============

COEUR D'ALENE: Names Two New Senior Execs to Lead Major Projects
----------------------------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE), the world's largest
primary silver producer and a growing gold producer, announced
Monday the appointment of two senior executives to lead the
development and construction of its two major advanced mining
projects, San Bartolome in Bolivia and Kensington in Alaska,
which are expected to add significantly to Coeur's gold and
silver production by 2006.

Raymond Threlkeld was named President South American Operations
for Coeur to manage the company's on-going silver/gold
operations in Chile and Argentina as well as the development of
its San Bartolome project in Bolivia. In addition, Alan L.
Wilder rejoins Coeur as Senior Vice President of Project
Development, responsible for the construction of San Bartolome
and the Kensington Gold Project in Juneau, Alaska. The two
executives have over a combined 63 years experience in the
development and/or construction of mining projects worldwide.

Mr. Threlkeld was most recently Regional Vice President
Chile/Argentina, Barrick Gold Corporation in charge of the
development of the Veladero and Pascua Lama gold/silver
deposits. Prior to assuming the regional role, Mr. Threlkeld was
Vice President, Project Development with the responsibility of
developing the Cowal, Australia, Alto Chicama, Peru and
Veladero, Argentina gold deposits. Mr. Threlkeld also was
responsible for the development and operation of the Pierina
Gold Mine, in Peru and Bulyanhulu Gold Mine in Tanzania.

Mr. Wilder has over 33 years of project development experience
completing key projects for companies including Bechtel
Corporation, Newmont Gold Corporation, Cyprus Amax, and
BHPBilliton. The last two years Al worked as an independent
consultant with several clients including Glamis Gold, where he
managed EPCM activities for the El Sauzal Project in Central
Mexico. Al worked with Coeur from 1986 - 1988 at Coeur's
flagship operation, the Rochester mine in Lovelock, Nevada and
subsequently in the Corporate Office from 1990 to 1997 as Vice
President - Project Development.

Dennis E. Wheeler, Coeur's Chairman and CEO stated, "We are very
pleased to have these two experienced mining professionals
joining Coeur as we ramp up for our next phase of growth. With
his return to Coeur, Al will play a vital role in seeing both
projects through to the finish line. Ray's expertise in both
operational optimization and project development will add
additional strength to Coeur's growing Chile and Argentinean
presence, while preparing for the construction of the San
Bartolome. With his extensive track record, I have no doubt that
Ray will provide the leadership we need to optimize the
potential of our new generation of mines in South America," Mr.
Wheeler added.

Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia. In 2004, Coeur expects to produce
133,000 ounces of gold and 14.5 million ounces of silver. The
company also has an active exploration program on its large land
positions at operations in Idaho, Chile and Argentina, and early
stage exploration concessions in Tanzania.

CONTACT:  Heather Turner, Manager Public, Community &
Governmental
          Relations, 208-769-8155
          Web site: http://www.coeur.com


NON-METALLIC MINERALS: Mulls Suit Against Bolivia
-------------------------------------------------
Non-Metallic Minerals plans to press charges against the
Bolivian government for canceling the Company's mining rights at
the Salar de Uyuni salt flats on June 23.  

Mr. Isaac Frenkel, the Company's director, said in a Business
News Americas report that the Bolivian government's action was
discriminatory. He contends that the mining concession was
revoked because the Company is Chilean.

Non Metallic Minerals, a subsidiary of Chile's Quiborax, was
mining ulexite at Salar de Uyuni before Bolivia's mining and
hydrocarbons ministry took the concessions away.  



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

PARMALAT BRAZIL: Will Receive Bankruptcy Decision This Week
-----------------------------------------------------------
The Sao Paulo Court will decide this week on the bankruptcy
petition filed by Parmalat Alimentos and its holding company,
Parmalat Participacoes. Parmalat's lawyers have argued that a
favorable court decision would allow the ailing companies to
take advantage of the 60 percent production recovery it had made
to strengthen operations.       

Valor Economico reports that Parmalat Brazil requested for
bankruptcy protection on January 28. The Company's financial
statements released in February showed assets worth BRL2.5
billion over BRL6.2 billion liabilities. At the end of 2003,
Parmalat Brazil had a net worth of BRL452.8 million not
including BRL243.5 million in inter-company receivables.

Upon receipt of the court's decision, the Company will have to
settle 40 percent of its debt in the first 12 months while the
remaining 60 percent will be settled in the next 12 months.  



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

EMCALI: To Receive Financial Aid From Government
------------------------------------------------
The Colombian government, headed by President Alvaro Uribe,
pledged to provide financial assistance to Emcali by
transferring COP700 billion (US$261 million) to the multi-
utility company, reports Business News Americas.

The President pledged to give the needed support "with the
condition that the company becomes sustainable."

In May, creditors of the multi-utility accepted a rescue plan
that helped Emcali fend off bankruptcy. The agreement guarantees
investment of COP2.8 trillion over the next 15 years and reduces
the Company's COP1.03 trillion debt burden by COP360 billion.

Emcali will continue to be a state municipal company, but it
will have a social capitalization fund that is to start before
the end of the year, says the report.



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

ICE: Slashes Geo Budget on Aresep's Refusal to Hike Rates
---------------------------------------------------------
Costa Rican electrical and telecoms agency ICE cut its budget
for the exploration of geothermal energy sources by 21.6% this
year to CRC410 million (US$937,142) compared to 2003, La Nacion
reports, citing VP Carlos Manuel Obregon.

According to Mr. Obregon, the move was taken after public
service regulator Aresep refused to allow ICE to increase
electricity tariffs by the amount it had requested. ICE sought
for a 12% hike but Aresep authorized only 6%.

"There is a certain amount of money that is generated by
electricity tariffs and this needs to cover operation,
maintenance and development of the national grid system. When
these funds are scarce, you have to prioritize," the newspaper
quoted Mr. Obregon as saying.



===================================
D O M I N I C A N   R E P U B L I C
===================================

BANCO MERCANTIL: Audit Uncovers Big Financial Gap
-------------------------------------------------
It was a big blow to the Republic Bank of Trinidad and Tobago
when a forensic audit carried out at its newly acquired Banco
Mercantil, a Dominican Republic bank, turned up a previously
undisclosed financial "hole" amounting to RD$2.4 billion ($300
million).

According to a Dominican Republic newspaper El Nacional, the
RD$2.4 billion was used by a Mercantil subsidiary called
Servivent Corporation, which used property mortgages and chattel
mortgages to gain access to resources from Mercantil.

This new amount would increase the total sum of missing funds at
Mercantil to RD$8.9 billion.

During the most recent meeting of the Monetary Board, Republic
Bank officials said that if the government does not assume this
additional debt, they will have to consider leaving the country.

But the Monetary Board was not willing to take on this burden as
it would enlarge the quasi-fiscal debt and endanger the
possibility of reaching an agreement with the IMF.

Nonetheless, the Dominican Central Bank denied that a
discrepancy exists.

Apolinar Veloz, a manager at the CB, said that no such "hole"
has been discovered in the Banco Mercantil.

The official said that reports of the file presented to the
Monetary Board were "erroneous" and the story carried in El
Nacional was an incorrect interpretation of the facts.


* Bear Stearns Cuts DR's Rating Ahead of July 23 Bond Payment
-------------------------------------------------------------
Bear Stearns lowered the bond rating for the Dominican Republic
to "low performance," DR1 Daily News reports.

Considering the country's inability to renew the agreements with
the IMF, Bears Stearns is doubting whether the country will be
able to meet a July 23 due date for the US$27-million payment on
the 2013 bonds. Bear Stearns sees this amount of money "as a
large amount within the context of the actual local situation."

The risk analyst acknowledges that the government has said it
will pay, but Bear Stearns thinks "that once again they will use
the grace period, and that it will be the decision of the
President-elect Leonel Fernandez to honor the payment or not."



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

EMPRESAS ICA: Signs Memorandum of Understanding With Itinere
------------------------------------------------------------
Empresas ICA Sociedad Controladora (NYSE and BMV: ICA), the
largest engineering, procurement, and construction company in
Mexico, announced the signing of a memorandum of intent on May
13th with the Spanish company Itinere de Infraestructuras
S.A.U., which is part of Grupo Sacyr Vallehermoso, to analyze
joint participation in highway concession projects that will be
developed in Mexico.

The highway concessions will be analyzed case by case. ICA will
seek the participation of other investors who will provide long
term capital for the projects, while directly participating in
the projects primarily as the contractor. Itinere would
participate by contributing its broad experience as
concessionaire and developer of concessioned highway projects.

Luis Zarate, ICA's Vice President in charge of business
development, said, "The agreement with Itinere is a promising
new avenue for ICA to participate in the new concessioned
highway program. ICA can contribute our expertise in
construction, in finding long term capital providers, and
transaction structuring, while not making a major financial
commitment. Itinere will contribute their demonstrated expertise
in developing and operating concessioned highways."

The Ministry of Communications and Transport (SCT) announced
last year a new program for developing concessioned highways, in
order to develop the next stage of Mexico's highway network and
eliminate bottlenecks. The SCT expects to award up to nine
concessions for 795 km of highways over the next three years.

Among the concessioned highway projects that ICA and Itinere
will analyze are San Blas-Escuinapa, Morelia-Salamanca,
Monterrey-Saltillo, and the Northern Bypass around Mexico City.

Founded in 1947, ICA has completed construction and engineering
projects in 21 countries. ICA's principal business units include
Civil Construction, and Industrial Construction. Through its
subsidiaries, ICA also develops housing, manages airports, and
operates tunnels, highways, and municipal services under
government concession contracts and/or partial sale of long term
contract rights.

CONTACT: Empresas ICA
         Col. Escandon Del Migual Hidalgo
         Mexico City
         11800
         Mexico
         Phone: 525-272-9991
         inversionistas@ica.com.mx

         Web Site: www.ica.com.mx


GRUPO TMM: Divestment of TFM Stake a Solution to Debt Problems
--------------------------------------------------------------
Divesting 41% of its interest in the railways transportation
subsidiary TFM could solve Grupo TMM's debt woes. TFM, which
accounts for 70% of the Company's revenues, is co-owned by
Kansas City Southern (KCS) and TMM.  

However, El Economista reports that TMM's shareholders have
previously blocked an attempt by the Company to sell its stake
on TFM to KCS for US$412 million plus Nafta Rail stocks.

TMM recently launched a US$377-million debt exchange offer. The
Company offered holders of outstanding bonds due 2003 and 2006
to exchange them for new senior bonds due in August 2007. In a
statement, TMM revealed that holders of about 72% percent of the
outstanding bonds have agreed to exchange them.

TMM said bondholders that agree to the exchange before July 16
will receive a sweetener of US$21.1 million in new bonds on a
pro rata basis. The already-expired May 2003 bonds with a value
of $177 million have a coupon of 9.5 percent. The $200 million
2006 bonds have a coupon of 10.25 percent.

TMM said it will require tenders for at least 98 percent of the
outstanding principal amount of the 2003 notes and at least 95
percent of the 2006 notes to move on with the exchange. If the
minimum tender conditions are not met, creditors have agreed for
the Company to seek for bankruptcy protection under U.S. Chapter
11 or Mexican law.

CONTACT: Grupo TMM
         Investor Relations
         Mr. Brad Skinner
         011-525-55-629-8725
         brad.skinner@tmm.com.mx

         Dresner Corporate Services
         General Investors, Analysts and Media
         Ms. Kristine Walczak
         312-726-3600
         kwalczak@dresnerco.com

         Proa/StructurA
         Media Relations
         Mr. Marco Provencio
         011-525-55-629-8708
         011-525-55-442- 4948
         mp@proa.structura.com.mx

         Web Site: www.tmm.com.mx



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

AERO CONTINENTE: Certain It Will Secure New Insurance
-----------------------------------------------------
The current insurance policy of Aero Continente, Peru's biggest
airline, will expire on July 10, reports Airwise.

The airline, whose assets are being embargoed under a United
States ban after its founder was placed by Washington on its
list of foreign drugs "kingpins" last month, needs to get a new
one in order to carry on with its operations.

But despite its problems involving its founder, Mr. Fernando
Zevallos, the airline is confident that it will get a new
insurance.

"We have another two insurance companies," spokesman German
Arata said. He said he did not know if they were Peruvian or
foreign.



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

PDVSA: 30% of Investment Going to Social Development Projects
-------------------------------------------------------------
About 30% of Venezuela's state oil company PDVSA's US$5-billion
investment for this year will go to social and infrastructure
projects, reports Business News Americas.

Mines and energy minister Rafael Ramirez revealed that US$500
million will go to infrastructure, US$600 million to agriculture
and US$600 million to health and education projects for
Venezuela's poor.

Ramirez also revealed that 50% of all surplus income from oil
sales is being channeled into a special fund set up by President
Hugo Chavez to finance strategic development projects, which
include hydroelectric programs, a sugar mill and a state
airline.

Political opponents have bluntly criticized the creation of such
fund, saying it is a populist measure aimed solely at convincing
people to vote in Chavez's favor at the August 15 referendum,
which will decide whether his term ends before 2007.

Meanwhile, analysts have expressed concern that the use of oil
revenues for social spending could affect PDVSA's ability to
maintain and expand its oil production capacity.

But Ramirez rejected such criticisms.

"Oil income must finance development, the fate of the country is
the fate of PDVSA," the minister told local press.



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