TCRLA_Public/040715.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

             Thursday, July 15, 2004, Vol. 5, Issue 139

                            Headlines

A R G E N T I N A

AUTOMUNDO: Individual Reports Due Tomorrow
COPIAS DEL ALTO: Trustee Finalizes Individual Reports
DARRIAN S.A.: Asks Court for Reorganization
DEASTI HERMANOS: Trustee Completes Claims Verification
DIQUE LUJAN: Debt Payments Halted, Set To Reorganize

EL PORVENIR: Individual Reports Due Tomorrow
IMALOG S.A.: Creditor Wins Bankruptcy Motion
KEF SRL: Court Declares Company Bankrupt
LA PASKANA: Trustee Prepares General Report
MASTELLONE HERMANOS: Moves to Prevent Milk Prices From Falling

NOW FAST: Court OKs Creditor's Bankruptcy Call
ROLON: Judge Approves Bankruptcy
SIAGRO: Verification Deadline Approaches
SUAT S.R.L.: Files For Bankruptcy Protection


B E R M U D A

FOSTER WHEELER: Signs New Shell Contract
LORAL: Mends Telstar 18 Launch Glitch


B R A Z I L

NET SERVICOS: UBS Recommends "Reduce" on Shares
TAM: To Float New Shares To Raise Capital
TELEMAR: Cuts Net Debt by BRL1,033 Mln in 2Q04


C H I L E

CARNES DARC: Sells Assets to Lo Valledor


H A I T I

* Haiti Needs $1.3B Financing


M E X I C O

AHMSA: Arrest of Former Chairman Won't Affect Operations
ALESTRA: To Expand Web Services to Ten More Cities
ALFA: To Focus on Main Businesses, Restructure Ailing Divisions
GRUPO MEXICO: Insists Strike is Illegal
VITRO: Likely to Place $150M, 10-Yr Bonds This Week


P E R U

AERO CONTINENTE: Flight Routes Granted to Other Airlines


V E N E Z U E L A

PDVSA: Preliminary Results of Tender Offer, Consent Solicitation

     -  -  -  -  -  -  -  -


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

AUTOMUNDO: Individual Reports Due Tomorrow
------------------------------------------
Buenos Aires' Court No. 14 expects to receive individual reports
from the Automundo S.A. bankruptcy on July 16, 2004. Ms. Susana
Graciela Marino, the court-appointed trustee, will prepare these
reports from claims submitted by the Company's creditors during
the verification period. The submission of the general report
will follow on September 13, 2004.

CONTACT: Ms. Susana Graciela Marino, Trustee
         Uruguay 560
         Buenos Aires


COPIAS DEL ALTO: Trustee Finalizes Individual Reports
-----------------------------------------------------
Individual reports pertaining to the bankruptcy case of Copias
del Alto S.R.L. is due for court submission tomorrow, July 16,
2004. Trustee Luis Ricardo Bonifatti will prepare these reports,
which are culled from proofs of claims submitted by the
Company's creditors.

The general report, to be prepared after the individual reports
are processed in court, will be submitted on September 13, 2004.

Buenos Aires Court No. 26, assisted by Clerk No. 52, has
jurisdiction over this case.

CONTACT:  Copias del Alto S.R.L.
          Av Coronel Diaz 2092
          Buenos Aires

          Luis Ricardo Bonifatti, Receiver
          Av Corrientes 123
          Buenos Aires


DARRIAN S.A.: Asks Court for Reorganization
-------------------------------------------
Darrian S.A., a publicities firm operating in Buenos Aires, has
requested for reorganization after defaulting on a July 7 debt
payment.

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.

The case is pending before Judge Di Noto of the city's Court No.
15. Dr. Tevez, Clerk of Court No. 29, assists on this case.

CONTACT: Darrian S.A.
         Chacabuco 90
         Buenos Aires


DEASTI HERMANOS: Trustee Completes Claims Verification
------------------------------------------------------
All claims against bankrupt Argentine company Deasti Hermanos
S.A. must be forwarded to the trustee, Ms. Susana Marino. Before
July 16, 2004. Ms. Marino will undertake the verification of all
submitted claims in order to determine the nature and amount of
the Company's debts.

Creditors must have their claims authenticated by the specified
date in order to qualify for the payments that will be made
after the Company's assets are liquidated.

Judge Sala of Buenos Aires Court No. 14, assisted by Clerk No.
28 Dr. Sarmiento Laspiur, will decide the outcome of this case.

CONTACT:  Deasti Hermanos SA
          San Nicolas 3632
          Buenos Aires

          Ms. Susana Marino, Trustee
          Uruguay 560
          Buenos Aires


DIQUE LUJAN: Debt Payments Halted, Set To Reorganize
----------------------------------------------------
Buenos Aires Court No. 26, assisted by Clerk No. 51, is
currently reviewing the merits of a reorganization petition
filed by Dique Lujan S.A.C.I.F.A.

El Pais reports that the textile company filed the petition
after halting debt payments since June 2004. Dique Lujan
reported debts totaling US$196,423.64

Reorganization will allow the textile company to avoid
bankruptcy by negotiating a settlement with its creditors.

CONTACT: Dique Lujan S.A.C.I.F.A.
         Bernardo de Irigoyen 190
         Buenos Aires


EL PORVENIR: Individual Reports Due Tomorrow
--------------------------------------------
Mr. Jorge Arias, the trustee overseeing the reorganization of El
Porvenir S.A., is set to submit individual reports on the case
tomorrow, July 16, 2004. After these reports are processed in
court, the trustee will prepare a general report and submit it
in court on September 14, 2004.

The Company will present a completed settlement plan to its
creditors during the informative assembly on February 22, 2005.

Buenos Aires Court No. 19, with the assistance of Clerk No. 38,
has jurisdiction over this case.

CONTACT: El Porvenir S.A.
         Av Callao 1046
         Buenos Aires

         Mr. Jorge Arias, Trustee
         Av Rivadavia 1227
         Buenos Aires


IMALOG S.A.: Creditor Wins Bankruptcy Motion
--------------------------------------------
Sociedad Anonima Organizacion Coordinadora Argentina
successfully sought for the bankruptcy of Imalog S.A. after
Judge Ferrario of Buenos Aries Court No. 6 issued a liquidation
order against the Company based on its US$62,358.33 debt
default.

As such, the Company will now enter the bankruptcy process under
the supervision of Ms. Sandra Dallo, the court-appointed
trustee. Creditors are requested to submit proofs of their
claims to the trustee before October 11, 2004.

Dr. Mendez Sarmiento, Clerk No. 12, assists the court on the
case, which will culminate in the liquidation of all of its
assets.

CONTACT: Imalog S.A.
         Zanartu 858
         Buenos Aires

         Ms. Sandra Dallo, Trustee
         Tucuman 1711
         Buenos Aires


KEF SRL: Court Declares Company Bankrupt
----------------------------------------
Judge Ottolenghi of Buenos Aires Court No. 4 declared local
company Kef S.R.L. bankrupt, relates La Nacion. The order was
issued upon the request of Mr. Julio Martinez who has claims
totaling US$52,064.40 against the troubled toy importer.

The Company will undergo the bankruptcy process under the
direction of Mr. Oscar Arias, the court-appointed trustee.
Creditors are required to present their proofs of claims to the
trustee before September 21, 2004. Failure to submit proof by
the said date will mean disqualification from the payments that
will be made after the Company's assets are liquidated.

Dr. Anta, Clerk No. 8, assists the court on the case.

CONTACT: Kef S.R.L.
         Juarez 2090
         Buenos Aires

         Mr. Oscar Arias, Trustee
         Carlos Pellegrini 1063
         Buenos Aires


LA PASKANA: Trustee Prepares General Report
-------------------------------------------
The court-appointed trustee for the La Paskana S.R.L.
bankruptcy, Mr. Eduardo Miguel Echaide, will submit a general
report on the case tomorrow, July 16, 2004. The general report
contains an audit of the companies accounting and business
records. It also details relevant events in the Company's
bankruptcy.

The bankruptcy case is filed under Court No. 4 of the Buenos
Aires Civil and Commercial Tribunal.

CONTACT:  Mr. Eduardo Miguel Echaide, Trustee
          Sanchez de Loria 155
          Buenos Aires


MASTELLONE HERMANOS: Moves to Prevent Milk Prices From Falling
--------------------------------------------------------------
Argentine dairy company Mastellone Hermanos, owner of the La
Serenisima brand, is looking to increase milk exports in order
to avoid a possible drop in prices, reports El Cronista.

As part of the measure, the Company plans to open its General
Rodriguez plant to milk suppliers that do not usually supply the
Company and will offer them milk dehydration process services
(part of the process of producing powdered milk).

According to government and market forecasts, milk production in
the country will increase by 20% in the last quarter of 2004. If
the additional production is marketed in the domestic market,
milk prices will fall and so will retail prices of processed
dairy products.

In order to avoid this possibility, Mastellone Hermanos is
encouraging milk producers to supply its General Rodriguez
plant, which is currently operating at 50% of its installed
capacity.

Mastellone Hermanos posted ARS28 million in losses at the back
of ARS292 million in turnover in the first quarter of 2004. The
dairy company ended 2003 with losses of ARS185.6 mil.

Mastellone Hermanos is seeking to restructure US$329.1 million
in debt.

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


NOW FAST: Court OKs Creditor's Bankruptcy Call
----------------------------------------------
Now Fast S.R.L. entered bankruptcy after Judge Gutierrez Cabello
approved the petition filed by Banco Rio del Plata S.A., reports
La Nacion. The Company's failure to pay a US$18,239.80 debt
prompted the liquidation request.

Working with Dr. O'Reilly, the city's Clerk No. 13, the court
assigned Ms. Jose Planas 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 November 8, 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: Now Fast S.R.L.
         Paraguay 2488
         Buenos Aires

         Mr. Jose Planas, Trustee
         Paraguay 631
         Buenos Aires


ROLON: Judge Approves Bankruptcy
--------------------------------
Rolon 1000 S.R.L. was declared bankrupt after Judge Dieuzeide of
Court No. 1 endorsed the liquidation petition filed by Banque
Nationale de Paris. La Nacion reports that the bank has claims
totaling US$5,5795.05 against Rolon.

The court assigned Mr. Barj Lajbisz to supervise the liquidation
process as trustee. He will validate creditors' proofs of claims
until September 16, 2004.

Dr. Galli, Clerk No. 2, assists the court on this case.

CONTACT: Rolon 1000 S.R.L.
         Espartaco 853
         Buenos Aires

         Mr. Barj Lajbisz, Trustee
         Paraguay 2630
         Buenos Aires


SIAGRO: Verification Deadline Approaches
----------------------------------------
Creditors of bankrupt Siagro S.R.L. are required to present
proofs of their claims to the trustee, Mr. Gustavo Manay, before
the verification period ends tomorrow, July 16, 2004.

Failure to comply with the verification deadline will mean
disqualification from the payments to be made once the Company's
assets are liquidated.

Judge Bavastro of Buenos Aires Court No. 17 facilitates this
case with Dr. Trebino Figuero, Clerk No. 33.

CONTACT:  Siagro SRL
          Avenida Diaz Velez 4192
          Buenos Aires

          Mr. Gustavo Manay, Trustee
          Montevideo 666, piso 10, "1006"
          Buenos Aires


SUAT S.R.L.: Files For Bankruptcy Protection
--------------------------------------------
Suat S.R.L., a security agency based in Buenos Aires, is seeking
approval to undergo bankruptcy following cessation of debt
payments since October 31, 2002.

Local daily La Nacion reports that the Company's case is pending
before Court No. 5, under Judge Vasallos. Dr. Perez Casado,
Clerk No. 9, assists the court on this case.

CONTACT: Suat S.R.L.
         Teniente General J. D. Peron 1711
         Buenos Aires



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

FOSTER WHEELER: Signs New Shell Contract
----------------------------------------
Foster Wheeler Ltd. (OTCBB:FWLRF) announced Tuesday its
subsidiary Foster Wheeler Energy Limited has been awarded a new
Alliance contract by Shell UK Oil Products Limited for the
provision of basic design, engineering, procurement and
construction management services at Shell's Stanlow
manufacturing complex, UK. The contract will run for a minimum
period of three years with options to extend for up to a further
four years. The booking values will be recorded as individual
work orders are received.

Foster Wheeler has been Shell's Alliance partner at Stanlow for
the past seven years. During this time it has developed and
established an excellent working relationship with the Shell
team and has carried out most of the assignments on a fully
integrated basis.

The company has undertaken over 900,000 hours on 500 separate
pieces of work for Shell at Stanlow during this period, ranging
in value from a few hundred dollars for discrete specialist
services to projects in excess of 36 million for the
engineering, procurement and construction management of a new
process unit with connections to the existing plant.

The contract was won against strong competition and its award
demonstrates Foster Wheeler's commitment to set new standards in
its support of Shell. Foster Wheeler and Shell will look to
raise to new levels of excellence the quality, timeliness and
cost-effectiveness of the services provided under the Alliance.

"We are pleased to continue our Alliance relationship with
Shell, which shows our ability to deliver successful results for
large and small projects alike," said Keith Batchelor, project
sponsor and director, engineering operations, Foster Wheeler
Energy Limited. "We are aiming for even higher performance
standards and plan to build on the collective strengths of our
two organizations and the successes which our integrated team
has achieved to date. We are committed to supporting Shell's
business activities and helping Shell to meet its objectives."

Foster Wheeler has a site-based team, fully supported by its
specialists and supplementary resources from its Reading
operations center and other UK branch offices. This local
service delivery, the significant on-call resources available
and Foster Wheeler's track record for safe, successful project
execution provide a winning combination which offers the
flexibility and performance that Shell requires of its Alliance
partner.

Mark Ravenscroft, manager, projects & construction, Shell UK
Limited, commented, "I look forward to continuing our successful
working relationship with Foster Wheeler and to jointly
developing the Alliance to deliver yet further improvements in
the implementation of excellent projects."

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,
petrochemicals, 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: Foster Wheeler
         Ms. Anne Chong
         +44 (0)118-913-2106

         Web Site: www.fwc.com


LORAL: Mends Telstar 18 Launch Glitch
-------------------------------------
Loral Space & Communications announced Friday that Telstar 18,
launched June 28, 2004 aboard a Sea Launch Zenit-3SL rocket, has
successfully reached its in-orbit testing position at 142
degrees East longitude.

During the satellite's launch, the Zenit rocket's upper stage
shut down 54 seconds early and released the satellite into a low
orbit. After the launch, engineers at Space Systems/Loral (SS/L)
raised the spacecraft to its correct orbit using a series of
carefully planned satellite maneuvers and thruster burns.

All systems on the satellite are performing nominally and in-
orbit testing has begun. The satellite, which was able to use
its significant stationkeeping fuel margin for the unplanned
orbit raising activities, has enough on-board fuel remaining
that will allow it to exceed its specified 13-year life.

"Telstar 18's ability to reach orbit, even with a launch vehicle
anomaly, showcases the robustness of SS/L's 1300 platform. Using
its reserve margin, the satellite was able to correct for the
launch shortfall and ensure the mission's success. SS/L's 1300
platform has a demonstrated record of exceeding our customers'
requirements even in anomalous conditions," said Patrick DeWitt,
President, Space Systems/Loral.

Telstar 18, which will be operated by Loral Skynet, ultimately
will be located at 138 degrees East longitude where it will
offer a wide variety of video and telecommunications services
across Asia. The satellite carries a total of 54 active
transponders, 16 high-power Ku-band transponders and 38 C-band
transponders. In-orbit testing of the spacecraft will continue
until its service start in August.

In addition to transmitting innovative new applications, cable
programming and direct-to-home broadcasting services, Telstar 18
is scheduled to begin hosting Skynet's SkyReach(SM) in 2005.
SkyReach is Skynet's two-way IP-based networking solution.
SkyReach, 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.

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.

Telstar 18 is a version of SS/L's space-proven 1300 satellite
platform, which has an excellent record of reliable operation.
The geostationary Telstar 18 satellite has a specified service
life of 13 years and maintains stationkeeping and orbital
stability by using bipropellant propulsion and momentum-bias
systems. In all, SS/L satellites have amassed more than 1,100
years of on-orbit service.

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, in combination with its 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 the Loral Skynet web
site at 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, California, 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.

Loral Skynet and Space Systems/Loral are both subsidiaries of
Loral Space & Communications (OTCBB: LRLSQ).

CONTACT: Mr. John McCarthy
        (212) 338-5345

         Web Site: www.loral.com



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

NET SERVICOS: UBS Recommends "Reduce" on Shares
------------------------------------------------
Investment bank UBS initiated coverage of shares in Brazilian
pay-television company Net Servicos de Comunicacao SA (NETC)
with a "reduce" recommendation, reports Dow Jones.

UBS didn't set a price target, saying that the Company's debt
restructuring efforts are "highly complex."

"But based on admittedly conservative assumptions, we believe
investors should reduce holdings," the bank said in a research
note.

Mexican fixed-line giant Telefonos de Mexico SA (Telmex) agreed
in June to acquire 30% - 60% of Net's outstanding shares from
Brazilian media group Globo Comunicacoes e Participacoes SA for
US$250 million - US$370 million.

However, the final purchase price is subject to modification,
depending on the outcome of Net's restructuring of BRL1.395
billion ($1=BRL3.042) in defaulted debt.

"After the capitalization is concluded and with Telmex on board,
we believe the prospects for Net improve significantly," the
report said.

CONTACT:  NET SERVICOS DE COMUNICACAO S.A.
          Marcio Minoru or Rodrigo Alves, 55 11 5186-2811
          E-mail: ri@netservicos.com.br


TAM: To Float New Shares To Raise Capital
-----------------------------------------
Brazilian airline TAM Linhas Aereas SA plans to raise capital by
issuing new shares on the local Bovespa stock exchange, Dow
Jones Newswires reports.

The airline is yet to decide on the timeframe or value of the
deal. But according to Dow Jones, under a 2002 shareholders'
agreement, TAM can issue a minimum US$50 million in new shares
by the end of this year.

At present, only 0.5% of TAM's stock trades on the Brazilian
market, says the report. The Rolim family holds 73% of TAM's
total capital, while the remaining 27% are in the hands of
investment funds.

The airline didn't say where the proceeds of the operation would
go but over the past few months, company executives have said
TAM would need between US$100 million and US$200 million to
improve its finances.

CONTACT:  TAM - Linhas Aereas
          Av. Jurandir, 856
          Jd. Aeroporto - Sao Paulo - SP
          Zip code: 04072-000
          PABX: (011) 5582-8811
          Web site: http://www.tam.com.br


TELEMAR: Cuts Net Debt by BRL1,033 Mln in 2Q04
----------------------------------------------
Tele Norte Leste Participacoes S.A. (NYSE:TNE) disclosed
preliminary consolidated unaudited information for the 2nd
quarter of 2004 and comparable figures for the previous quarter
and the same quarter of 2003.

The Company continues to deliver solid year over year operating
performance, in particular the growth in its customer base
across all operations and continued market share gains, chiefly
in the long-distance, data and wireless segments.

As a result, net debt was decreased by R$1,033 million, to
finish the quarter at R$7,355 million. Along with the disclosure
of Telemar's quarterly earnings report on July 29, 2004, the
Company will communicate a revised estimate for debt for the end
of 2004, as well as more detailed information on the quarterly
results.

The main event for the 2nd quarter was significant growth
(15.5%) in Oi's customer base, which represented net additions
of 685 thousand new customers, supporting the company's
expectation for achieving 6.5 million clients by year's end.

The increased customer base resulted in an increase of R$102.0
million in "Cost of Goods Sold" (handsets and accessories) when
compared with the previews quarter, bringing the EBITDA margin
down in 2Q04.

Additionally, an increase in provisions (for labor and civil
claims in particular), of R$69.3 million compared to 1Q04 also
contributed to the decrease in margins. These higher provisions
reflect the increase in judicial claims, mostly labor suits,
driven by layoffs upon the end of PAM (Program for the Early
Achievement of Targets) in 2001.

                         Preliminary Results - 2Q04

                                                 % Change
Financial (BRL Mln) 2Q03   1Q04   2Q04  2Q04/1Q04 2o.Q04/2o.Q03

Gross Revenue      4,570   5,145  5,315       3.3%        16.3%
Net Revenue        3,343   3,689  3,798       3.0%        13.6%
EBITDA             1,470   1,680  1,544      -8.1%         5.0%
EBITDA Margin (%)  44.0%    45.6% 40.7%

Income after
Taxes & Profit
Sharing           -165.5   220.4    78.3      -64.5%

Total Debt        11,394  12,005   12,200       1.6%        7.1%
Cash               1,875   3,617    4,845      34.0%      158.4%

Net Debt           9,519   8,388    7,355     -12.3%      -22.7%

Capex                295     197      337      71.1%       14.2%

                                                  % Change
Operational         jun/03 mar/04 jun/04 jun04/mar04 jun04/jun03

TMAR
Lines in Service -

LIS (thousand)        14,901 15,123 15,199    0.5%         2.0%
Oi -Subscribers (in K) 2,236  4,408  5,093   15.5%       127.8%

ADSL -
Velox Subscribers
  (in K)                84.7   284.5  344.6   21.1%       307.0%

CONTACT: Mr. Kevin Kirkeby
         Global Consulting
         kkirkeby@hfgcg.com
         Tel: 1 646.284.9416

         TNE - INVESTOR RELATIONS
         invest@telemar.com.br

         Web Site: www.telemar.com.br


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

CARNES DARC: Sells Assets to Lo Valledor
----------------------------------------
Carnes Darc, the Chilean beef processing company, concluded its
liquidation yesterday with the sale of its assets to former
rival Lo Valledor.

El Mercurio reports that the asset sale, which will include the
Company's slaughter and processing facilities, is expected to
fetch CLP3,000 million. These assets have an estimated value of
CLP4,000 million.



=========
H A I T I
=========

* Haiti Needs $1.3B Financing
-----------------------------
The interim Government of Haiti, the European Commission, the
Inter-American Development Bank, the United Nations and the
World Bank released on Tuesday an assessment of Haiti's social,
economic and political needs over the next two years determining
that total financing requirements top $1.3 billion. Given
existing financing of some $440 million, the assessment calls
for $924 million to be raised to fill the financing gap.

The needs assessment, entitled the Interim Cooperation Framework
(ICF), outlines the interim Government's program for the next
two years and will form the basis for discussions and pledging
at the forthcoming International Donors Conference on Haiti to
be held at the World Bank in Washington on July 19 and 20, 2004.

From restoring electricity services to feeding disadvantaged
children and getting them back to school, the Interim
Cooperation Framework covers priorities in twenty sectors and
four cross-cutting themes. Led by the interim government, in
coordination with the European Commission, the Inter-American
Development Bank, the United Nations and the World Bank, the ICF
exercise involved over 200 national and international experts
from 26 bilateral and multilateral donors, UN agencies, civil
society and the private sector. The findings and recommendations
of the ICF were discussed at several workshops convened by the
interim Government of Haiti with the participation of political
parties, civil society organizations and local authorities at
both the national and the regional level - in Port-au-Prince,
Les Cayes, Gonaives and Cap Haitien. In preparation for the
international donors conference next week, Government officials
and donors met on June 15 to review the preliminary results of
the assessment.

The interim Government's priorities as outlined in the Interim
Cooperation Framework revolve around four strategic areas:

1. Strengthening political governance and promoting national
dialogue;
2. Strengthening economic governance and institutional
development;
3. Promoting economic recovery; and
4. Improving access to basic services.

Quick impact programs identified by the ICF to meet the
country's priority needs over the next two months include the
creation of 44,000 jobs, the collection and disposal of 50
percent of garbage in urban areas, the upgrading of 500 slum
dwellings in Port-au-Prince, and the doubling of electricity
services to 12 hours per day in Port au-Prince. These programs
are aimed at restoring stability and improving the quality of
life following the months of violence that earlier this year
closed businesses, prevented children from going to school, shut
off power and water services, and left piles of garbage in the
streets.

Over the next two years, in the social sector alone, the ICF
outlines programs to improve nutrition for over 440,000 poor
children, immunize 80 percent of children under age one against
diphtheria-tetanus-pertussis (DPT3), and rehabilitate 1,500
schools.

During the next year, while implementing the programs of the
Interim Cooperation Framework in partnership with the
international community and non-governmental organizations, the
interim Government plans to resume the preparation of a Poverty
Reduction Strategy (PRSP) through a participatory process
involving all sectors of Haitian society. The draft PRSP will be
presented to the new government resulting from the 2005
elections.

Financing Needs:

With an estimated per capita income of $361 in 2003, Haiti is
the poorest country in the Western Hemisphere. Half of the urban
population has no access to safe water, the incidence of
HIV/AIDS is estimated at 5 percent, and the average Haitian can
expect to live only 53 years. The effects of a three-year
economic embargo in the early 1990s, followed by years of
political upheaval, conflict and insecurity have hindered
sustainable economic and social progress and contributed to
increased violence.

Against this backdrop, the Interim Cooperation Framework has
paid particular attention to the importance of putting in place
the conditions for free, credible and transparent elections;
restoring law and order; ensuring quick and visible improvements
in basic services for the Haitian people; building long-term
institutional and human capacity; and strengthening economic
governance to ensure sustainable, accountable and transparent
development. Particular attention has also been paid to issues
of institutional strengthening, absorptive capacity, donor
coordination, and the close monitoring of the ICF implementation
and results - all issues which have undermined aid efforts in
the past.

The Interim Cooperation Framework estimates the overall needs
for the two year-period (July 2004-September 2006) for programs
in the 20 priority sectors to be US$1.37 billion.  Not all of
the identified needs require new financing, however. Already in
2004, about $440 million is available from donors' and the
government's own resources - a signal of the interim
Government's commitment to the program. At the July 19 and 20
conference, donors will be looking to raise the additional $924
million needed to fill the financing gap for the two-year
program.

CONTACT: The World Bank Media Contact
         Ms. Lee Morrison
        (202)-458-8741
         Lmorrison1@worldbank.org

         Web Site: web.worldbank.org



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

AHMSA: Arrest of Former Chairman Won't Affect Operations
--------------------------------------------------------
Mexican steel maker Altos Hornos de Mexico SA (AHMSA.MX) said
that Monday's arrests of former chairman Xavier Autrey Maza in
Spain along with his advisor Juan Carlos Carredano won't affect
its operations, or its ongoing debt restructuring negotiations.

"This situation does not affect the normal course of company
operations, including the debt restructuring process that Vector
Casa de Bolsa is overseeing," Business News Americas quoted the
Company as saying.

Monclova, Mexico-based Ahmsa, one of the country's biggest steel
producers, defaulted on US$1.8 billion in debt in 1999. The
Company later reached a restructuring agreement with creditors,
but reneged on the deal in an effort to secure better terms.

Mexico's finance and public credit ministry (SHCP) had issued
arrest warrants for Autrey and former Ahmsa CEO Alonso Ancira,
accusing the two of tax evasion. Ahmsa charged that the
government was using the tax accusations to pressure the Company
and favor its creditors.

Among Ahmsa's principal bank creditors are Citigroup Inc.'s
Mexican unit Banamex, Bank of America Corp., and Spanish-owned
BBVA-Bancomer.

Ahmsa obtained a suspension of payments under old bankruptcy
laws that favored debtors over creditors in cases of default,
and which have since been changed.

CONTACT:  AHMSA
          Prolongacion B. Juarez s/n,
          Monclova , Coahuila 25770
          Mexico
          http://www.AHMSA.com
          Phone: +52 86 33 81 72
          Fax: +52 86 33 65 66
          Contacts:
          Alonso Ancira Elizondo, CEO, Vice Chairman, Pres/CEO
          Jorge Ancira Elizondo, Chief Financial Officer
          Manuel Ancira Elizondo, Chief Operating Officer


ALESTRA: To Expand Web Services to Ten More Cities
--------------------------------------------------
Alestra, which provides long-distance services in Mexico, seeks
to gain a stronger foothold in the Web services market, reports
Business News Americas.

Alestra already offers web services in the cities of
Guadalajara, Mexico City and Monterrey through its Total
Multiservice Links, which consists of data, voice, and dedicated
internet access for small and medium-sized enterprises (SMEs).

According to the report, the Company plans to expand the
services to ten additional cities, bringing the coverage to 13
cities with the biggest potential for SME clients. The Mexican
business information system (SIEM) estimates such markets have
21,953 SMEs, the highest concentration of such firms in the
country.

The service enables customers to make unlimited local calls for
a fixed monthly charge and includes a certain number of minutes
for national long-distance calls depending on the number of
lines contracted, says the report. Internet access is bundled
within the package.


ALFA: To Focus on Main Businesses, Restructure Ailing Divisions
---------------------------------------------------------------
Analysts see Mexican industrial group Alfa SA focusing on its
key business this year (Sigma, Alpek and Nemak) while it
restructures its more problematic divisions, particularly
Hylsamex, the second largest steel company in Mexico, reports El
Universal.

Year 2003 was a rough year for Hylsamex but thanks to buoyant
steel prices, the Company's financial performance was better
than expected by the market.

Despite this, the financial situation of the unit is complicated
due to high leverage and volatile results. Hylsamex's net debt
was reported at US$962 million at the end of the first quarter.

Standard & Poor's (S&P) expects the unit to prepay US$100
million in debt with free cash flow, as well as paying US$34
million that will be due.

Alfa has US$370 million in debt, consisting of two Eurobonds
(one for US$139 million expiring in 2007 and the other for
US$161 million maturing in 2010), and stock certificates in
investment units (UDIs) equivalent to US$70 million and expiring
in six years.

The other two problematic divisions of Alfa are Sidor, a
Venezuelan iron and steel company, and Alestra.

Alestra has approximately US$400 million of debt, composed of
US$304 million senior notes due 2010, US$37 million 12.125%
senior notes due 2006, US$46 million 12.625% senior notes due
2009 and US$13 million of other debt. All of the debt is dollar
denominated and unsecured.


GRUPO MEXICO: Insists Strike is Illegal
---------------------------------------
Mexican copper mining giant Grupo Mexico SA is confident that
the strike at La Caridad mining complex in northwestern Mexico
will be lifted soon.

Workers went on strike Monday seeking profit-related bonuses,
overtime pay and improved safety measures, according to Mexico's
National Mining, Metallurgical and Similar Workers Union in a
statement.

But Grupo Mexico, the world's third largest copper producer,
expects labor authorities to declare the walkout illegal, and
that the strike will be lifted soon.

Juan Rebolledo, Grupo Mexico vice president for international
relations, said Tuesday the Company had offered to meet the
workers' demands.

"We wanted to avoid a strike, but the union went ahead," he
said.

But the union indicated that the Company didn't say how or when
the demands would be met that's why they went ahead with the
strike.

CONTACT:  Mr. German Larrea Mota Velasco
          Chairman & CEO
          GRUPO MEXICO
          Av. Baja California No. 200
          Colonia Roma Sur
          06760 Mexico, D.F.
          Tel. Conm. 52 (55) 5080-0050


VITRO: Likely to Place $150M, 10-Yr Bonds This Week
---------------------------------------------------
Dow Jones expects the glass containers division of Mexico's
Vitro SA (VITRO.MX) to place US$150 million in 10-year secured
notes later this week, in a deal that's been assigned a B+
credit rating by Standard & Poor's.

The division, Vitro Envases Norteamerica S.A. de C.V. ("VENA"),
intends to use the proceeds of the issuance to repay
indebtedness.

The notes will be issued by VENA and guaranteed by VENA's
principal Mexican subsidiaries and Vitro Packaging, VENA's
trading company in the United States. The Notes will be secured
by first priority liens on most of VENA's and its subsidiaries'
assets. The collateral may be shared with other creditors of
VENA and its subsidiaries.

CONTACTS: Media Mexico D.F.:
          Eduardo Cruz
          Vitro, S. A. de C.V.
         +52 (55) 5089-6904
          ecruz@vitro.com

          Web Site: www.vitro.com



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

AERO CONTINENTE: Flight Routes Granted to Other Airlines
--------------------------------------------------------
Aero Continente SA, Peru's largest airline, remained paralyzed
Tuesday, prompting the Ministry of Transportation and
Communications to grant its routes to other carriers.

Bloomberg reports that the ministry granted six routes to Lan
Chile SA's Lan Peru unit, two to Taca International Airlines and
four to state-owned TANS Peru.

Smaller airlines will assume Aero Continente's remaining 11
daily flights, the ministry said in an e-mailed statement.

The ministry pulled Aero Continente's operating license after it
failed to secure a new insurance policy.

The government had said it would offer a temporary government-
sponsored insurance policy, permitting the airline to continue
flying. An emergency presidential decree published Saturday in
Peru's official gazette, El Peruano, said the Finance Ministry
would act as a financial guarantor for AeroContinente. But that
fell apart when the government said the airline failed to
provide needed documentation.

Aero Continente, which had about 65% of the Peruvian market, ran
into problems when the U.S. government last month placed its
founder, Fernando Zevallos, on its list of overseas drug
kingpins. The U.S. also prohibited U.S. businesses from having
any contacts with the airline, meaning the airline's insurance
company, Global Aerospace, didn't renew the policy that expired
Saturday.



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

PDVSA: Preliminary Results of Tender Offer, Consent Solicitation
----------------------------------------------------------------
PDVSA Finance Ltd., a wholly owned subsidiary of Petroleos de
Venezuela, S.A. (PDVSA), announced Tuesday the results as of
5:00 p.m., New York City time, on July 12, 2004 (the "early
tender date") of its tender offer and consent solicitation for
its outstanding notes listed below (the "notes").

On June 28, 2004, PDVSA Finance launched a cash tender offer for
any and all of its outstanding notes. Concurrently with the
tender offer, PDVSA Finance solicited from noteholders consents
to proposed amendments to certain provisions of the Senior
Indenture, as supplemented, under which each series of notes
were issued, and related transaction documents. The proposed
amendments required the consent of a majority in principal
amount of the notes outstanding, voting as a single class, which
have now been received. As of July 12, 2004 at 5:00 p.m. New
York time, holders of an aggregate of approximately 95.78%(1) in
principal amount of the notes have validly tendered and
delivered their consents pursuant to the tender offer and
consent solicitation.

Preliminary Results of Tender Offer and Consent Solicitation

PDVSA Finance has been advised by JPMorgan Chase Bank, the
depositary for the offer, that, as of the early tender date, the
following aggregate principal amount of notes had been validly
tendered, and the related consents delivered, and not withdrawn
pursuant to the tender offer and consent solicitation:

                                                       Principal
                                        Outstanding     Amount
                           CUSIP/ISIN   Principal       Validly
      Notes                   No.        Amount        Tendered
   ------------------------------------------------------------
6.250% Euro Notes
Due 2006              XS0096444749 EUR88,400,000   EUR87,354,228

   -------------------------------------------------------------
6.650% Notes
Due 2006             693300AE5 /    $300,000,000    $291,023,000
                     US693300AE52

   -------------------------------------------------------------
9.375% Notes         693300AP0 /
Due 2007            US693300AP00
                     G6954PAJ9 /
                    USG6954PAJ96    $250,000,000    $241,242,000
   ------------------------------------------------------------
6.800% Notes         693300AF2 /
Due 2008            US693300AF28
                     693300AC9 /
                    US693300AC96
                     G6954PAC4 /     $300,000,000
$292,924,000
                    USG6954PAC44
   -------------------------------------------------------------
9.750% Notes         693300AR6 /
Due 2010            US693300AR65
                     G6954PAK6 /
                    USG6954PAK69     $250,000,000
$224,119,000
   -------------------------------------------------------------
8.500% Notes         693300AU9 /
Due 2012            US693300AU94     $500,000,000
$467,967,000
   -------------------------------------------------------------
7.400% Notes         693300AJ4 /
Due 2016            US693300AJ40     $400,000,000
$384,610,000
   -------------------------------------------------------------
9.950% Notes         693300AT2 /
Due 2020            US693300AT22
                     693300AS4 /
                    US693300AS49     $100,000,000
$96,900,000
   -------------------------------------------------------------
7.500% Notes         693300AK1 /
Due 2028            US693300AK13     $400,000,000
$392,290,000
   -------------------------------------------------------------
Total outstanding principal amount of notes:   $2,609,686,720(2)
Total principal amount of notes
  validly tendered:                            $2,499,464,126(2)
Percentage of notes validly tendered,
  considered as a single
  class:                                              95.78%(2)
   -------------------------------------------------------------

The above tendered notes may not be withdrawn after the early
tender date. As a result, considered as a single class,
sufficient consents have been delivered to approve the proposed
amendments and PDVSA Finance intends to execute, as soon as
practicable, a supplement to the Senior Indenture to effect the
proposed amendments. Subject to the terms and conditions of the
tender offer, PDVSA Finance will pay for all notes accepted in
the tender offer promptly after the expiration date, which is
12:00 midnight, New York City time, on July 26, 2004 (unless
extended, the "expiration date"). We anticipate that settlement
will take place on August 2, 2004.

Holders of notes who have not yet tendered their notes in the
tender offer may do so at any time prior to the expiration date.
Notes tendered after the early tender date will no longer be
entitled to receive the consent payment, but will continue to be
eligible to receive the tender offer consideration.

Dealer Managers and Consent Solicitation Agents; Information
Agent; Luxembourg Agent

Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc.
are acting as dealer managers and consent solicitation agents
for the tender offer. Additional information concerning the
terms of the tender offer, including the procedures for
tendering notes and delivering consents and conditions of the
tender offer, may be obtained from Deutsche Bank Securities Inc.
at 1-866-627-0391 (U.S. toll free) or 1-212-250-2955 (collect)
or J.P. Morgan Securities Inc. at 1-866-334-4869 (U.S. toll
free) or 1-212-834-7901 (collect). Copies of the Offer to
Purchase and Consent Solicitation, the accompanying Letter of
Transmittal and related documents may be obtained from D.F. King
& Co., Inc., the Information Agent for the tender offer, at 1-
800-829-6551 (U.S. toll free), 1-212-269-5550 (banks and
brokers) or +44(207)-920-9700. In Luxembourg, copies of the
Offer to Purchase and Consent Solicitation, the accompanying
Letter of Transmittal and related documents may be obtained from
the Luxembourg Agent for the offer, J.P. Morgan Bank Luxembourg
S.A., located at 5 rue Plaetis, L-2338 Luxembourg, telephone
number (352) 462-685-732.

This announcement is not an offer to purchase, a solicitation of
an offer to purchase or a solicitation of consent with respect
to any notes. The tender offer and consent solicitation are
being made solely pursuant to the Offer to Purchase and Consent
Solicitation and the accompanying Letter of Transmittal, and are
not being made in any jurisdiction in which such an offer or
solicitation would be unlawful.

About PDVSA

PDVSA is the national oil company of the Bolivarian Republic of
Venezuela, formed by the government of Venezuela in 1975. All of
the crude oil and natural gas reserves are located exclusively
in Venezuela and PDVSA's exploration and production of crude oil
and natural gas are conducted exclusively in Venezuela. The
refining, marketing and transportation of crude oil, natural gas
and refined petroleum products of PDVSA are located in Venezuela
as well as in the United States, Europe and the Caribbean. PDVSA
Finance, a Cayman Islands company, is the principal financing
vehicle for and a wholly owned subsidiary of PDVSA.



                            ***********


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

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