TCRLA_Public/040803.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, August 3, 2004, Vol. 5, Issue 152



ALDEFIL: Individual Report Filings Expected Wednesday
COMPANIA NORTE: Trustee to End Claims Verification Period
EDEERSA: Sale Bidding Rules Now Available for Review
INCOTYE: Creditors To Vote on New Debt Plan
INGENIERO PEIRANO: Liquidation Proceeds to Repay Debts

JUAN MINETTI: AFIP Slaps ARS74.7 Mln Fine for Late Taxes
OFF ON: Individual Reports Due Wednesday
PACIWAY COMPANY: Prepares for Restructuring
PAPELERA MARINUCCI: Trustee To Submit Individual Reports
PARMALAT ARGENTINA: Sale Extended Until August

POULSEN HORNUM: Court Authorizes Reorganization Motion
STOP CAR: Claims Verification Period Nearly Over
VIALCOM: Verification Deadline Approaches


PERSONA: HMTF-Assembled Group Completes Acquisition


FOSTER WHEELER: Extends Exchange Offer


CEMIG: Announces Subscription Period for Third Debentures Issue
COPEL: Gets Go Ahead to Increase Elejor Stake


VALORES BAVARIA: First Half Result Slides to $11.4M Loss

D O M I N I C A N   R E P U B L I C

EDE-ESTE: Parent Seeks To Sell Off Stake Before Year-End


EMPRESAS ICA: Slim Cuts Stake to 10.1%
GRUPO MEXICO: La Caridad Workers End Strike
GRUPO TMM: Cuts Exchange Offer Quota for 2003 Notes to 95.3%
PEMEX: Net Losses Double in 2Q04
VITRO: Fitch Cuts Senior Unsecured Debt to 'B'


CANTV: Increases CapEx Target for This Year
CANTV: President Chavez Issues Warning Ahead of Referendum
PDVSA: Congress to Begin Fund Inquisition
SIDOR: More Employees Subscribe to PPL as Expiration Looms

     - - - - - - - - - -


ALDEFIL: Individual Report Filings Expected Wednesday
Individual reports from the Aldefil San Luis S.A. liquidation
will be presented at San Luis' Civil and Commercial Tribunal
Court No. 4 on August 4, 2004. Mr. Federico Gabriel Estada, the
trustee, will prepare these reports from forwarded creditors'
claims. He will also submit a general report on the case on
September 17, 2004.

CONTACT: Aldefil San Luis S.A.
         Calle 108 entre 2 y 4
         Parque Industrial Sur
         San Luis

         Mr. Federico Gabriel Estada, Trustee
         Lavalle 1416
         Buenos Aires

COMPANIA NORTE: Trustee to End Claims Verification Period
Mr. Carlos Erasmo Moreno, the court-appointed trustee for the
Compania Norte S.A. bankruptcy proceedings, will close the
verification of creditors' claims on August 4, 2004. The
Company's case falls under the jurisdiction of Buenos Aires'
Commercial And Civil Court No. 16. Clerk No. 31 assists the
court on this case.

CONTACT: Mr. Carlos Erasmo Moreno, Trustee
         Tucuman 1658
         Buenos Aires

EDEERSA: Sale Bidding Rules Now Available for Review
Bidding rules pertaining to the auction of the 51% stake of
Argentina's Entre Rios province in power distributor Edeersa are
now available for sale at the office of Entre Rios energy
department for ARS15,000 (US$5,119), reports Business News

A source close to the tender process said technical and economic
bids must be received on October 25. Technical bids will be
opened that day and economic bids will be opened on November 18.
A winner will be announced on December 15.

The Argentine government took control of the Edeersa stocks last
year after the provincial power regulator, Epre, ruled on a
transfer of ownership from a trust fund benefiting Edeersa
employees and shareholder, which had previously held all of the
Company's shares. The move was intended to assure the continuity
of power supplies and keep jobs in the province.

US Utility PSEG, the original owner of Edeersa, created the
trust fund after abandoning the Company in the midst of the
Argentine economic crises in 2003. However, the government
rejected the transfer because it did not give control of the
Company to workers as PSEG had claimed. The rejection left the
utility with an US$86 million non-convertible debt.

INCOTYE: Creditors To Vote on New Debt Plan
Creditors of insolvent Incotye S.A. will ratify the Company's
settlement plan on Wednesday, August 4, 2004. Court No. 5 of the
city's Civil and Commercial Tribunal will confirm the plan once
it gets the requisite majority vote during the assembly.

Mr. Jose Andress Sabuqui, the court-appointed trustee,
supervised the company's insolvency proceedings.

CONTACT: Incotye S.A.
         Zuviria 5561(1439)
         Buenos Aires
         Tel: (011) 4602-5143
         Fax:(011) 4602-6246

         Mr. Jose Andress Sabuqui, Trustee
         Bdo de Irigoyen 330
         Buenos Aires

INGENIERO PEIRANO: Liquidation Proceeds to Repay Debts
Ingeniero Peirano S.A. of Lomas de Zamora will begin liquidating
its assets after the City's Court No. 13 declared the company
bankrupt. Infobae reveals that the bankruptcy process will
commence under the supervision of court-appointed trustee, Mr.
Juan Angel Giannazzo.

The trustee will review claims forwarded by the company's
creditors until October 1, 2004. After verification, individual
reports based on the claims will be presented for court review
on November 5, 2004. A general report will also be submitted on
December 6, 2004.

CONTACT: Mr. Juan Angel Giannazzo, Trustee
         Cerrito 2398
         Lomas de Zamora

JUAN MINETTI: AFIP Slaps ARS74.7 Mln Fine for Late Taxes
Argentine cement producer said Thursday that tax agency, AFIP,
slapped it with approximately ARS74.7 million in fine for late
tax payments, relates Dow Jones Newswires. The charges,
according to a filing with the stock exchange, date back to late
payments between December 2001 and August 2002. The Company said
it had already appealed some of the fines late last year, when
it presented documents showing a tax payment of ARS8.6 million.
The Company, which is controlled by Swiss cement giant Holcim,
has also appealed the other charges.

CONTACT:  Juan Minetti SA
          87 Ituzaingo
          Argentina  5000
          Phone: +54 51 26 7529
          Fax:  +54 51 24 4709
          Home Page:
          Dr. Manuel Augusto J. Baltazar Ferrer, Chairman
          Atty. Carlos Buhler, Executive Vice Chairman & General

OFF ON: Individual Reports Due Wednesday
Individual reports on the Off On S.A. bankruptcy case will be
submitted in court on Wednesday, August 4, 2004. Mr. Juan
Alberto Krimerman, the trustee overseeing the insolvency
proceedings will prepare the reports from all forwarded
creditors' claims. He will also provide the court with a general
report on September 15, 2004.

Buenos Aires Court No. 9, assisted by Clerk No. 18, has
jurisdiction over this case.

         Alvarado 2647
         Buenos Aires

         Mr. Juan Alberto Krimerman, Trustee
         Uruguay 594
         Buenos Aires

PACIWAY COMPANY: Prepares for Restructuring
Court No. 9 of Buenos Aires' Civil and Commercial Tribunal
issued a resolution opening the reorganization of Paciway
Company S.A., says local daily Infobae. The pronouncement allows
the Company to draft a settlement proposal with its creditors in
order to avoid liquidation. The reorganization also allows the
Company to retain control of its assets subject to certain
conditions imposed by Argentine law and the oversight of a court
appointed trustee.

Mr. Jaime Luis Jeiman will serve as trustee during the
reorganization. He will be validating creditors' proofs of
claims until October 8, 2004. The results of the verification
will be presented in court as individual reports on November 19,

The trustee is also required to provide the court with a general
report of the case on February 1, 2005. The general report
summarizes events relevant to the reorganization and provides an
audit of the Company's accounting and business records.

The completed settlement plan will be presented to creditors
during the informative assembly scheduled on July 12, 2005.

CONTACT: Paciway Company S.A.
         Tucuman 1438
         Buenos Aires

         Mr. Jaime Luis Jeiman, Trustee
         Lavalle 1312
         Buenos Aires

PAPELERA MARINUCCI: Trustee To Submit Individual Reports
Mr. Eduardo Aguinaga, the trustee assigned in the Papelera
Marinucci S.A.C.I. bankruptcy case, will submit individual
reports from the case on August 4, 2004. Court No. 19 of Buenos
Aires' Civil and Commercial Tribunal will use these documents to
finalize the list of creditors eligible to receive post-
liquidation payments. The general report is also due for
submission on September 15, 2004.

CONTACT: Mr.Eduardo Aguinaga, Trustee
         Maipu 374
         Buenos Aires

PARMALAT ARGENTINA: Sale Extended Until August
The sale of the Argentine assets of insolvent Italian dairy
company Parmalat will not be completed at the end of July, as
originally planned, reports Dow Jones Newswires. The operation,
which is being managed by auditing firm KPMG, has been extended
until the second half of August because according to a source
close to the negotiations, Italian officials have initiated "a
new round of negotiations [with several interested buyers] to
clear up remaining doubts."

Moreover, the source said it's possible a decision will not be
made until early September, since most of Europe shuts down for
vacation in August.

Parmalat put its Argentine operations up for sale in May as part
of its global restructuring plan, which calls for a scaling back
from 30 countries to 10. Several interested buyers range from
local and international investment groups to Canadian dairy
company Saputo Inc.

POULSEN HORNUM: Court Authorizes Reorganization Motion
Poulsen Hornum y CompanĦa S.C.A. successfully petitioned for
reorganization after Court No. 2 of Tres Arroyos' Civil and
Commercial Tribunal issued a resolution opening the company's
insolvency proceedings. During insolvency, the company will
continue to manage its assets subject to certain conditions
imposed by Argentine law and the oversight of a court-appointed

Infobae relates that Mr. Juan Vrdoljak will serve as trustee
during the course of the reorganization. He will be accepting
creditors' proofs of claims for verification until August 6,

After the verification deadline, the trustee will prepare the
individual reports and submit it in court on September 21, 2004.
The firm will also present a general report for court review on
November 5, 2004.

The company will endorse the settlement proposal, drafted from
the submitted claims, for approval by the creditors during the
informative assembly scheduled on February 17 next year.

CONTACT: Poulsen Hornum y CompanĦa S.C.A.
         San Francisco de Bellocq
         Tres Arroyos

         Mr. Juan Vrdoljak, Trustee
         Estrada 249
         Tres Arroyos

STOP CAR: Claims Verification Period Nearly Over
Ms. Alicia Romero, the trustee assigned in the Stop Car S.A.
reorganization, is expected to complete the verification of
creditors' claims by August 4, 2004.

Claims Verification is a stage of the bankruptcy process wherein
the trustee determines the names of creditors who will be
eligible for repayment.

Buenos Aires Court No. 7 handles this case.

          Talcahuano 1071
          Buenos Aires

          Ms. Alicia Romeo, Trustee
          Rodriguez Pena 694, piso 5o "G"
          Buenos Aires

VIALCOM: Verification Deadline Approaches
Creditors of bankrupt Company Vialcom S.R.L. are required to
submit proofs of the Company's indebtedness to Trustee Beatriz
Muruaga before Wednesday, August 4, 2004. Ms. Muruaga will
examine and authenticate the claims to determine the nature and
amount of the Company's debts. Creditors who fail to comply with
the verification deadline will not qualify for the payments to
be made after the Company's assets are liquidated.

Buenos Aires Court No. 19, assited by Clerk No. 37, has
jurisdiction over this case.

          Avenida Francisco Beiro 4745, Piso 5.
          Buenos Aires

          Ms. Beatriz Muruaga, Trustee
          Aguero 1290, Piso 4
          Buenos Aires


PERSONA: HMTF-Assembled Group Completes Acquisition
Hicks, Muse, Tate & Furst Incorporated ("HMTF") and Persona Inc.
("Persona" or the "Company") (TSX: PSA) announced Friday that a
company owned by an investor group assembled by HMTF and
including TD Capital Canadian Private Equity Partners and CIBC
Capital Partners (the "Purchasers") has completed its previously
announced acquisition of Persona in a transaction valued at
approximately C$406 million (US$305 million). Completion of the
transaction follows approval by the Canadian Radio-television
and Telecommunications Commission, and Persona shareholders and

The Purchasers also announced that Dean T. MacDonald has been
named Chief Executive Officer of Persona. Mr. MacDonald most
recently served as Executive Vice President and Chief Operating
Officer of Rogers Cable Inc., Canada's largest cable television
service provider.

The Purchasers have acquired any and all issued and outstanding
common shares of Persona for C$6.80 per share in cash, and
Persona will cease to be a public company after the Toronto
Stock Exchanges approves the Company's application to be
delisted. Shareholders will receive their cash payments within
five business days of submitting letters of transmittal to CIBC
Mellon, the depositary for the transaction. The form of the
letters of transmittal was mailed to shareholders this week.

Persona is now focused exclusively on its core Canadian
operations. As part of the transaction, Persona sold its wholly-
owned subsidiary Persona Communications (Barbados) Inc.
("PCBI"), which owned an indirect 25% equity interest in Cable
Bahamas Limited, to Philip Keeping for a consideration of
approximately C$25.8 million.

Peter S. Brodsky, a Partner at HMTF, said: "We and our partners
are pleased to complete the acquisition of Persona and to
attract an executive of the caliber of Dean MacDonald to run the
business. During a twenty-year career, Dean has distinguished
himself as one of the leading executives in the Canadian cable
industry with significant experience in nearly every area of the
business. We believe that under Dean's leadership, Persona will
capitalize on a number of attractive growth opportunities, which
will enable us to once again create value in a sector where our
firm has excelled."

Mr. MacDonald said: "I am thrilled to lead Persona at this
exciting time in the company's development. As an industry
executive and long-time Newfoundland resident, I have been
familiar with Persona's strong Canadian operations for many
years and believe that the company has taken important steps to
improve its competitiveness. I am delighted to be working with a
group of like-minded partners and dedicated employees committed
to growing Persona and capitalizing on the many opportunities
available to our company."

Mr. MacDonald joined Rogers Communications, Rogers Cable's
sister company, in 1999 as Senior Vice President, Government
Relations, Marketing and Sales and was promoted to his most
recent position in 2003. Prior to joining Rogers, he was
President, Director and Minority Shareholder of Cable Atlantic
Inc. from 1985 to 2001. Early in his career, Mr. MacDonald was a
Senior Partner of MS Advertising Inc. and a Marketing Manager at
Avalon Cablevision. He is Chairman or Director of several
companies and industry trade groups. Mr. MacDonald received a
degree in business commerce from Memorial University of

About Persona Inc.

Persona is in the business of providing cable television,
digital cable, high speed Internet, dial-up Internet and telecom
services to a diverse base of residential and commercial
customers in British Columbia, Alberta, Saskatchewan, Manitoba,
Ontario, Quebec and Newfoundland. Persona is Canada's sixth-
largest cable operator with 663 systems serving approximately
220,000 subscribers.

About CIBC Capital Partners

CIBC Capital Partners, a division of Canadian Imperial Bank of
Commerce, has responsibility for the principal investing
activities of CIBC World Markets on a global basis and through
its various investment portfolios has total committed funds of
approximately C$4 billion.

About TD Capital Canadian Private Equity Partners

TD Capital Canadian Private Equity Partners (CPEP) is a fund
established by TD Capital, the private equity arm of TD Bank
Financial Group. Established more than 35 years ago, TD Capital
has approximately C$3 billion of capital under management
through its offices located in Canada and the United States. In
2000, CPEP raised the largest ever bank-sponsored private equity
partnership in Canada, with C$635 million of commitments. CPEP
has 15 investment professionals located in its Toronto office.

About Hicks, Muse, Tate & Furst

With approximately US$11 billion under management, HMTF since
1989 has completed or currently has pending more than 400
transactions with a total capital value of approximately US$50
billion. Since its inception, HMTF has invested more than US$1.3
billion of equity capital in metropolitan and non-metropolitan
cable systems around the world. Persona represents HMTF's tenth
global cable platform. Headquartered in Dallas, HMTF also has
offices in London.


FOSTER WHEELER: Extends Exchange Offer
Foster Wheeler Ltd. (OTCBB: FWLRF) extended until 5 p.m. New
York City time on Monday, August 30, 2004, its offer to

   (1) its Common Shares and its Series B Convertible Preferred
       Shares (the "Preferred Shares") for any and all
       outstanding 9.00% Preferred Securities, Series I issued
       by FW Preferred Capital Trust I (liquidation amount $25
       per trust security) and guaranteed by Foster Wheeler Ltd.
       and Foster Wheeler LLC, including accrued dividends;

   (2) its Common Shares and Preferred Shares for any and all
       outstanding 6.50% Convertible Subordinated Notes due 2007
       issued by Foster Wheeler Ltd. and guaranteed by Foster
       Wheeler LLC;

   (3) its Common Shares and Preferred Shares for any and all
       outstanding Series 1999 C Bonds and Series 1999 D Bonds
       (as defined in the Second Amended and Restated Mortgage,
       Security Agreement, and Indenture of Trust dated as of
       October 15, 1999 from Village of Robbins, Cook County,
       Illinois, and to SunTrust Bank, Central Florida, National
       Association, as Trustee); and

   (4) its Common Shares and Preferred Shares and up to
       $150,000,000 of Fixed Rate Senior Secured Notes due 2011
       of Foster Wheeler LLC guaranteed by Foster Wheeler Ltd.
       and certain Subsidiary Guarantors for any and all
       outstanding 6.75% Senior Notes due 2005 of Foster Wheeler
       LLC guaranteed by Foster Wheeler Ltd. and certain
       Subsidiary Guarantors; and solicitation of consents to
       proposed amendments to the indenture relating to the
       9.00% Junior Subordinated Deferrable Interest Debentures,
       Series I of Foster Wheeler LLC, the indenture relating to
       the 6.50% Convertible Subordinated Notes due 2007 and the
       indenture relating to the 6.75% Notes due 2005.

As of the close of business on July 29, 2004, holders have
tendered the following amounts of the following securities:

   (1) 9.00% Preferred Securities, $18,797,975;

   (2) 6.50% Convertible Subordinated Notes, $838,000;

   (3) Robbins Series C Bonds due 2024, $6,268,000, Robbins
       Series C Bonds due 2009, $45,000, and Robbins Series D
       Bonds, $91,000; and (4) 6.75% Senior Notes, $12,585,000.

As announced on June 30, 2004, Foster Wheeler has modified the
terms of the exchange offer. The modified terms and conditions
of the exchange offer are set forth in Foster Wheeler's
registration statements on Form S-4 (File Nos. 333-107054 and
333-117244) filed on July 23, 2004. On Friday, the amended
exchange offer was declared effective by the Securities and
Exchange Commission, and revised offering materials will be
distributed as soon as practicable.

The dealer manager for the exchange offer and consent
solicitation is Rothschild Inc., 1251 Avenue of the Americas,
51st floor, New York, New York 10020. Contact Rothschild at 212-
403-3784 with any questions on the exchange offer.

The exchange agent for the exchange offer is the Bank of New
York, London Branch.

The foregoing reference to the proposed registered exchange
offer and any other related transactions shall not constitute an
offer to buy or exchange securities or constitute the
solicitation of an offer to sell or exchange any securities in
Foster Wheeler Ltd. or any of its subsidiaries.

Investors and security holders are urged to read the following
documents filed with the SEC, as amended from time to time,
relating to the proposed exchange offer because they contain
important information: (1) the registration statements on Form
S-4 (File Nos. 333-107054 and 333-117244) and (2) the Schedule
TO (File No. 005-79124). These and any other documents relating
to the proposed exchange offer, when they are filed with the
SEC, may be obtained free at the SEC's Web site at
You may also obtain these documents for free (when available)
from Foster Wheeler by directing your request to: John A.
Doyle; email; telephone 908-730-4270; and
address Foster Wheeler Inc., Perryville Corporate Park, Clinton,
NJ 08809-4000.

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

          Media Contact: Maureen Bingert, 908-730-4444
          Other Inquiries: 908-730-4000
          Web site:

- Stock expected to continue to trade on NASDAQ while extension
request is considered.

- Company analyzing cost of access adjustment for 2003, finds no
material adjustment for 2002.

Global Crossing (NASDAQ: GLBCE) announced Friday that it
requested an additional exception until September 10, 2004 from
the NASDAQ Listing Qualifications Panel for returning to
compliance with NASDAQ listing requirements. Global Crossing's
common stock will continue to trade on the NASDAQ National
Market while the Panel considers Global Crossing's request. The
company will provide prompt public disclosure after the Panel
issues its decision.

Global Crossing also reported significant progress in its
previously announced cost of access review. The company has
determined that the amount of the adjustment to its cost of
access liabilities is approximately $54 million, net of vendor
dispute settlements, representing approximately three percent of
its 2003 cost of access operating expenses of $1,915 million.

There will also be a separate adjustment for an approximately
$12 million balance sheet reclassification related to cost of
access amounts recorded upon the company's emergence from
bankruptcy. The combined adjustments of $66 million are in line
with the company's original estimate of $50 million to $80
million. There is no material adjustment required to the cost of
access liabilities at December 31, 2002.

As previously announced, Deloitte & Touche LLP recently
completed an independent investigation of the facts and
circumstances giving rise to the company's understatement of
cost of access liabilities and expenses. Deloitte & Touche
reported that the investigative procedures it performed did not
reveal any management integrity issues related to the cost of
access accrual and expenses, or any knowledge by management of
an understatement related to the year-end 2003 financial
statements until after the filing of such financial statements
in March 2004.

The company has been consulting with its independent auditors
for 2002 and 2003, Grant Thornton LLP; its new independent
auditors, Ernst & Young; and the Board of Directors' independent
audit committee regarding the proper accounting treatment of the
change in the company's cost of access liabilities. Based on
these consultations, the company's current view is that the
charge should be recorded in the first quarter of 2004 and that
a restatement of prior period financials statements will not be
required. The company intends to review this accounting
treatment with the SEC.

Global Crossing (NASDAQ: GLBCE) provides telecommunications
solutions over the world's first integrated global IP-based
network. Its core network connects more than 300 cities and 30
countries worldwide, and delivers services to more than 500
major cities, 50 countries and 6 continents around the globe.
The company's global sales and support model matches the network
footprint and, like the network, delivers a consistent customer
experience worldwide.

Global Crossing IP services are global in scale, linking the
world's enterprises, governments and carriers with customers,
employees and partners worldwide in a secure environment that is
ideally suited for IP-based business applications, allowing e-
commerce to thrive. The company offers a full range of managed
data and voice products including Global Crossing IP VPN
Service, Global Crossing Managed Services and Global Crossing
VoIP services, to more than 40 percent of the Fortune 500, as
well as 700 carriers, mobile operators and ISPs.

PRESS CONTACTS: Public Relations:

                Ms. Becky Yeamans
                + 1 973-937-0155

                Ms. Tisha Kresler
                + 1 973-937-0146

                Ms. Catherine Berthier
                + 1 646-256-8502

                Ms. Fernanda Marques
                Latin America
                + 55 21-3820-4712

                Ms. Mish Desmidt
                + 44 (0) 7771-668438

                Analysts/Investors Contact:

                Mr. Mitch Burd
                +1 800-836-0342

                Web Site:


CEMIG: Announces Subscription Period for Third Debentures Issue
Companhia Energetica de Minas Gerais (CEMIG) hereby announces
the distribution for public subscription, on 12 August 2004, of
the Third Issue, made up of 40,000 (forty thousand) nominal,
unsecured, non-referred book-entry Debentures, not convertible
into shares, in a single Series, with unit value R$10,000.00
(ten thousand Reais) on 1 June 2004 ("the Issue Date"), issued
by Companhia Energetica de Minas Gerais - CEMIG ("the

   With total value: R$400,000,000.00
   RISK RATING: Moody's         Fitch

1. The Issuer

Name and Head Office: Companhia Energetica de Minas Gerais -
CEMIG ("the Issuer"), a listed corporation with head office at
Avenida Barbacena, 1200, in the city of Belo Horizonte, State of
Minas Gerais, Brazil, registered in the Brazilian Register of
Corporate Taxpayers (CNPJ) under number 17.155.730/0001-64, with
its Articles of Association filed with the Commercial Board of
the State of Minas Gerais, under NIRE number 06.2.002160005/7.

2. Decision

The decision to make this Third Issue of debentures for public
distribution ("the Issue") was taken in meetings held by the
Issuer's Board of Directors on 27 May and 23 June 2004 ("the
Board Meetings"). The minutes of the Board Meetings were filed
at the Commercial Board of the State of Minas Gerais under
numbers 3188769 and 3188778 respectively, and published in the
newspapers Gazeta Mercantil, National Edition, Minas Gerais and
O Tempo, on 30 June 2004.

3. Securities Distribution Program

This issue is part of the Issuer's Public Debenture Issue
Program, with maximum value of R$ 1,500,000,000.00 (one billion
and five hundred million Reais) ("the Program"), approved by the
board meeting of 27 May 2004. The Program was filed at the CVM
(the Brazilian Securities Commission) on 19 July 2004.

4. Characteristics of the Debentures

    4.1. Amount of the Issue: R$ 400,000,000.00 (four hundred
million Reais) on the Issue Date.

    4.2. Number of Debentures: 40,000 (forty thousand)

    4.3. Form: Nominal, book-entry Debentures, without issue of
deposits or certificates.

   4.4 Convertibility: The Debentures are not convertible into

   4.5. Type: The Debentures are unsecured, and without
preference rights.

   4.6. Nominal Unit Value: R$ 10,000.00 (ten thousand Reais),
on the Issue Date.

   4.7. Series Number: The Issue is made in a single series.

   4.8. Maturity: The debentures will have tenor of 120 (one
hundred and twenty) calendar months from the Issue Date, with
final maturity on the first business day of June 2014 ("the
Maturity Date"), on which date the Issuer undertakes to pay the
debentures which are still in the market, for their Nominal Unit
Value, augmented by the due Remuneration.

5. Remuneration

The Debentures of this Issue shall have the right to the
following remuneration ("the Remuneration"):

5.1. Updating adjustment of the Debentures

The nominal value of the Debentures shall undergo updating
adjustment as from the Issue Date by application of the
variation in the IGP-M Inflation Index ("the Index"), calculated
and published by the Getulio Vargas Foundation.

This adjustment will be calculated pro rata temporis, per
business day, according to the following formula ("the Updating

Vna - is the updated nominal value calculated to 6 (six) decimal
places, without rounding;

Vne -  is the nominal value or balance of nominal value,
calculated to 6 (six) decimal places, without rounding;

C -  is the accumulated result of the monthly variations of the
indices used, to 8 decimal places, without rounding;

NI0 - is the numerical value of the Index for the month prior to
the first month of the period for which the adjustment is made;

NI1 - is the numerical value of the Index for the first month of
the period for which the adjustment is made;

NI2 - is the numerical value of the Index for the second month
of the period for which the adjustment is made;

Nin - is the numerical value of the Index for the month prior to
the month of updating, up to the monthlyanniversary date. After
the monthly-anniversary date, it is the numerical value of the
Index for the month of updating;

NIn-1 - is the numerical value of the Index for the month prior
to month "n";

dup - is the whole number of business days from the last base-
date to the date of the updating adjustment;and

dut - is the whole number of business days between the last and
the next base-date.

The month of the updating adjustment is the month between the
two consecutive monthly-anniversary dates of the debentures in

The monthly-anniversary date is the first business day of each
The base-date is the same day as the date of anniversary in each
The numerical (index-number) value of the IGP-M index will be
used employing an identical number of decimal points to that
published by the body which calculates it.

The IGP-M will be applied annually, or in the shortest period
permitted by the legislation currently in force, in this case
without the need for adjustment to the respective Issue Deed or
any other formality.

5.1.1. If on the date of maturity of any of the pecuniary
obligations of the Issuer, the IGP-M is not disclosed, the last
prior index number of the IGP-M that was published shall be
applied, calculated pro rata temporis, and no financial
compensation whatsoever shall be due between the Issuer and the
holders of the Debentures on the occasion of any subsequent
disclosure of the IGP-M which would have been applicable.

5.1.2. In the event that the IGP-M is abolished, or not
calculated and/or not disclosed for more than 10 (ten)
consecutive days after the date expected for its calculation
and/or disclosure, or if any legal impossibility arises
preventing the application of the IGP-M to the Debentures, the
Fiduciary Agent shall, within 30 (thirty) calendar days from the
event, carry out a meeting of debenture holders, for decision,
in agreement with the Issuer, subject to the applicable
regulations, of a new parameter for remuneration of the
Debentures to be proposed by the Issuer.

Until the decision on this parameter, the last prior IGP-M
officially published shall be used for the calculation of the
amount of updating adjustment of the Debentures, augmented by
the Remuneration Interest (as defined below), up to the date of
the decision of the meeting of debenture holders.

5.1.3. If there is no agreement about the new remuneration
between the Issuer and debenture holders representing at least
2/3 (two thirds) of the total of the Debentures in circulation
(or if there is a lack of quorum to decide on the question), the
Issuer shall redeem the totality of the Debentures in
circulation, within 30 (thirty) calendar days from the date of
the meeting of debenture holders, for the balance of their
Nominal Unit Value plus the remuneration due up to the date of
the redemption, calculated pro rata temporis, starting from the
Issue Date or the date of the last payment of remuneration
interest, as the case may be, using the last IGP-M index
officially published. The redemption to which this item refers
shall not be increased by any premium of any nature.

5.1.4. On the maturity date the updating of value of the
Debentures shall be paid by the Issuer together with the nominal
unit value of the Debentures.

5.1.5. On the day on which subscription of the Debentures takes
place, and for the purposes only of ascertaining the
subscription price, if there is no publication of the IGP-M
index relating to the month in which the subscription of the
Debentures is taking place, the last previous projection of the
IGP-M index made by Andima (Brazilian Financial Market
Institutions Association), based on the forecast published by
the Getulio Vargas Foundation (FGV), available on the Internet
at, shall be used to calculate the updated
nominal value of the Debentures, or in its absence the last IGP-
M index officially published, and no financial compensation
shall be due for payment between the Issuer and the Debenture
Holders at the time of the subsequent publication of the IGP-M
which would be applicable.

5.2. Remuneration Interest of the Debentures

Interest at 10.5% (ten point five percent) per year, decided on
the basis of a bookbuilding procedure, shall be payable on the
Nominal Unit Value, of the Debentures augmented by updating
adjustment, and shall be calculated by business days, based on a
year of 252 (two hundred and fifty two) days, from the Issue
Date ("the Remuneration Interest").

The Remuneration Interest shall obey the following formula:


J - is the amount of interest due at the end of each
Capitalization Period (as defined below), calculated to 6 (six)
decimal places, without rounding;

Vna - is the Nominal Unit Value, or balance of Updated Nominal
Value, as previously established;

Taxa - is 10.5;

N -  is 252;

N - is the whole number of business days between the next and
the prior event;

DT - is the whole number of business days between the date of
the next event and the date of the previous event; and

DP - is the whole number of business days between the date of
the previous event and the present date.

5.2.1. The Remuneration Interest was approved by the Issuer's
Board of Directors in a meeting held on 23 June 2004, the
minutes of which were published on 30 June 2004, in the
newspapers Gazeta Mercantil, National Edition, Minas Gerais and
O Tempo.

5.2.2. The Remuneration Interest shall be paid by the Issuer
annually, the first payment to be made 12 (twelve) months after
the Issue Date, that is to say on the first business day of June
2005, and the other payments on the first business days of June
of the subsequent years, on the compound capitalization basis,
pro rata temporis per business day.

5.2.3. No discounts of any nature shall be granted to investors
in relation to acquisition of the Debentures.

6. Right of preference

There shall be no right of preference for the Issuer's present
stockholders in subscription of the Debentures.

7. Conditions of subscription and payment
7.1. Price of subscription and form of payment: The price of
subscription of the Debentures shall be their Nominal Unit
Value, augmented by the Remuneration, calculated pro rata
temporis from the Issue Date up to the date of payment,
according to item 5 above. The Debentures shall be paid at
sight, simultaneously with subscription, in Brazilian currency.

7.2. Place of payment: The payments to which the Debenture
Holders are entitled shall be made using, as the case may be:

(i) the procedures adopted by the CBLC (Brazilian Settlement and
Custody Chamber) for Debentures registered in the BOVESPA FIX
trading system; or

(ii) the procedures adopted by CETIP (the Custody and Settlement
Chamber) for Debentures registered in the National Debentures
System (SND); or

(iii) for Debenture Holders not linked to either of these
systems, through the respective Mandated Recording Bank for this

7.3. Programmed amortization: The Debentures shall not be the
subject of programmed amortization before their respective
Maturity Date.

7.4. Extension of payment periods: In the event that the due
date of any payment of any obligation of either of the parties,
including the Debenture Holders, coincides with a day which is
not a working or banking business day in the cities of Sao Paulo
(Sao Paulo State) and/or Belo Horizonte (Minas Gerais State),
the period for payment shall be deemed extended until the next
subsequent business day, without any increase in the amounts to
be paid, other than for payments to be made by CETIP or CBLC,
for which there shall be extension only when the payment date
coincides with a Brazilian nationwide holiday.

8. Distribution placement and procedure

8.1. The Debentures shall be the subject of public distribution,
under the best efforts distribution regime, with intermediation
by financial institutions which are part of the Securities
Distribution System, through the SDT, administered by Andima
(the Brazilian Association of Financial Market Institutions) and
operated by Cetip and/or through the BOVESPA FIX system of the
Sao Paulo stock exchange with custody provided by CBLC.

8.2. Subject to the applicable regulatory provisions, the
intermediary institutions shall carry out the public
distribution of the Debentures according to a distribution plan
adopted in accordance with No. 3 of Section 33 of CVM
Instruction 400/03, so as to ensure:

(i) that investors are treated fairly and equitably;
(ii) that the investment is appropriate to the risk profile of
the respective clients of the Intermediary Institutions, and
(iii) that the sales representatives of the Intermediary
Institutions previously receive a copy of the Prospectus and the
Supplement for obligatory reading and that their doubts can be
resolved by a person designated by the Lead Manager of the

The distribution plan was decided as follows:

(i) Prior to the registry of the distribution of the Debentures
a "roadshow" was carried out as decided by the intermediary
institutions in agreement with the Issuer, during which versions
of the preliminary prospectus and the preliminary supplement
were distributed;

(ii) after the roadshow, and as decided by the intermediary
institutions in agreement with the Issuer, the intermediary
institutions began a process of bookbuilding, subject to the
procedures relating to this Issue;

(iii) after the process of bookbuilding, the intermediary
institutions consolidated the proposals of the investors for
subscription of the Debentures;

(iv) after the final remuneration of the Debentures had been
decided, the documents relating to the Offering of the
Debentures were presented to the CVM;

(v) this present announcement of start of distribution is being
published subsequent to registry of the Public Offering of
Debentures having been obtained from the CVM,;

(vi) there shall be no minimum or maximum lots for subscription
of the Debentures; and

(vii) demand of clients of the intermediary institutions who
wish to invest in the Debentures shall be met preferentially,
having in mind the relationship of the intermediary institutions
with these clients and other considerations of a commercial or
strategic nature.

8.2.1. In the terms of the Board Meetings and pursuant to
Section 30 of CVM Instruction 400/03, partial distribution of
the debentures shall be allowed and this Issue shall in no way
be affected if the Debentures are not subscribed and paid up in
their totality.

The Debentures which are not subscribed and paid up shall be
cancelled by the Issuer. Maintenance of this Issue is not
conditional on a minimum quantity of Debentures subscribed or
paid up nor on a minimum amount of funds raised by the Issuer by
means of the Issue.

8.2.2. If the Offering is not finalized, for any reason, the
funds deposited by investors in relation to the Debentures shall
be returned to the respective depositors, in a way and on the
conditions established in the Supplement, and these funds shall
be returned to the investors without the addition of interest or
monetary adjustment, and with the deduction of the amount
relating to the CPMF tax on bank debits.

This shall also apply, as the case may be, to investors who make
their subscription to the issue conditional at the time of
signing the respective subscription bulletins in the event that
their condition is not met on closing of the Debenture offer.

8.2.3. A. The Issuer has authorized the leading intermediary
institution, at its option, to distribute a supplementary lot of
debentures if the demand for the debentures justifies this. In
this event, the quantity of Debentures to be distributed under
this public offering may be increased by up to 15% (fifteen
percent) from the quantity initially offered, subject to the
same conditions and price as the debentures initially offered.

8.2.4. The maximum period for public placement of the Debentures
shall be 5 (five) business days, from the date of publication of
this announcement of start of public distribution of the

8.2.5. No fund for maintenance of liquidity of the debentures
has been constituted, and no such fund shall be constituted, and
no contract for stabilization of price in relation to the
Debentures shall be signed.

8.3. Any Debentures which are the subject of this public
and are not subscribed and paid up shall be cancelled.

9. Renegotiation

The Debentures of this Issue shall not be subject to programmed

10. Optional early redemption

The Debentures of this Issue shall not be subject to optional
early redemption by the Issuer.

11. Early Acquisition

11.1. Optional Early Acquisition: The Issuer may, at any time,
acquire the Debentures that are in circulation in the market,
for a price not superior to their nominal value plus the
remuneration, subject to the terms of Section 55 of Law 6404/76.

The Debentures which are the subject of such acquisition may be
cancelled, remain in the Issuer's treasury, or be placed in the
market again.

11.2. Obligatory Early Acquisition: If there is a change in the
direct or indirect stockholding control of the Issuer, the
Issuer shall be obliged to acquire the Debentures of this issue
which are in circulation, at the option of the respective
Debenture Holders who do not accept to remain as holders of
Debentures of the Issuer after the change in its stockholding

The offer to purchase shall be notified to these Debenture
Holders by means of a specific advice published within 15
(fifteen) calendar days from the date of effective change of
stockholding control, with a period of not less than 60 (sixty)
calendar days from the publication of the notice and in
accordance with the procedures described in this notice.

The acquisition of the Debentures by the Issuer shall take place
on the 30th (thirtieth) calendar day after the last day of the
period for Debenture holders to express an opinion, for their
Nominal Value, augmented by the Remuneration, as specified in
item 5 above. For the purposes of this item, there shall occur a
"change in stockholding control" if the present controlling
stockholder of the Issuer, the Government of the State of Minas
Gerais, directly or indirectly, ceases to hold the equivalent of
at least 50% (fifty percent) plus one of the total of shares
representing the voting capital of the Issuer.

12. Trading

The Debentures shall be registered for trading on the secondary
market, on the (i) SND (National Debentures System),
administered by Andima and operated by Cetip and/or (ii) on the
BOVESPA FIX, of the Sao Paulo stock exchange, with custody by

13. Target Investing Public

The target public of this offering consists of all investors, in

14. Inappropriateness of Investment in the Debentures

The present issue is not appropriate for investors who:

(i) need considerable liquidity in relation to the securities
acquired, since trading in Debentures in the Brazilian secondary
market is restricted, and
(ii) are not willing to run the credit risk of the companies of
the Brazilian electricity sector.


Lead Manager:

UNIBANCO - Uniao de Bancos Brasileiros S.A.
Av. Eusebio Matoso, 891
CEP 05423-901, Sao Paulo, SP
Tel: (11) 3097-1213
Fax: (11) 3813-2675

Co-Lead Managers:

Banco Itau BBA S.A.
Avenida Brigadeiro Faria Lima, 3400, 5th floor
CEP 04538-132, Sao Paulo, SP
Tel: (11) 3708-8717
Fax: (11) 3708-8107

BB-Banco de Investimento S.A.
Rua Lelio Gama, 105, 28th floor
CEP 20301-080, Rio de Janeiro, RJ
Tel: (21) 3808-3773
Fax: (21) 3808-3239


Banco Itau S.A.
Avenida Eng§. Armando de Arruda Pereira, 707 - 9th floor
CEP 01014-919, Sao Paulo, SP


Pavarini Distribuidora de TĦtulos e Valores Mobili rios Ltda.
Rua Sete de Setembro, 99 - 16th floor
CEP 20050-005, Rio de Janeiro, RJ


public distribution is 2 August 2004.



The Prospectus and the Supplement of the present offering are
available at the head offices and on the web pages of the
intermediary institutions of the present Issuer, and of the CVM,
Cetip and CBLC.

Further information can be obtained from the intermediary
institutions of the present issue or the CVM. In addition to the
addresses of the intermediary institutions, the Mandated
Recording Bank and the Issuer, we present below other important

CVM (Comissao de Valores Mobili rios)

1) Rua Sete de Setembro, 111 - 5th floor, Centro
CEP 20159-900, Rio de Janeiro - RJ

2) Rua Formosa, 367 - 20th floor, Centro
CEP 01049-000, Sao Paulo - SP

Cetip - Settlement and Custody Chamber
Rua LĦbero Badar˘, 425, 24th floor
CEP 01009-000 Sao Paulo, SP

CBLC - Brazilian Settlement and Custody Company
Rua XV de Novembro, 275.
CEP 01013-001Sao Paulo, SP


This public offering was prepared in accordance with the
provisions of the Auto-Regulation Code of Anbid for public
offerings of securities, registered in the Fifth Public Registry
Office of documents of Rio de Janeiro, under number 497585,
meeting the minimum standards of information therein contained,
and Anbid has no responsibility for the said information, for
the quality of the Issuer/Offering Party or of the participating
institutions or for the securities which are the subject of this

CONTACT: Companhia Energetica de Minas Gerais (CEMIG)
         Avenida Barbacena, 1.200 - Terreo
         Belo Horizonte,  30190
         Phone: (877) 248-4237

         Web Site:

COPEL: Gets Go Ahead to Increase Elejor Stake
Integrated power company Copel is expected raise its stake in
Elejor after Aneel, the Brazilian power regulator, approved its
bid buy an additional 30 percent of the company. Business News
Americas reports that upon purchase, Copel will own 70 percent
of Elejor while Paineira Perticipacoes holds the remaining 30
percent. To facilitate this purchase, Copel made a BRL7.2
million down payment in December. The stake is valued at some
BRL37 million (US$12.3 million).

Elejor is the holding company for the 238MW Santa Clara and
Fundao hydroelectric generation projects estimated to begin
operations next year. Copel's recent acquisition is part of its
plan to focus operations in Parana.


VALORES BAVARIA: First Half Result Slides to $11.4M Loss
Pension payments made to bankrupt carrier Avianca dragged
Valores Bavaria's bottom line deeper into the red in the first
half of 2004, says Reuters. Valores Bavaria, controlling 50
percent of Avianca, recorded a loss of COP29.9 billion pesos
(US$11.4 million) during the period compared to a COP16.6
billion loss a year earlier.

However, the result does not include earnings from the carrier,
which had improved from last year's US$3.3 million loss to end
at an EBITDA of US$39.3 million in the period. The Company is
currently waiting for the U.S. bankruptcy court's decision on
the sale of its Avianca stake to Brazilian magnate German
Efromovich. An approval would unload US$300 million of the
airlines debt, which Mr. Efromovich will assume.

Valores Bavaria, owned by Mr. Julio Mario Santo Domingo, also
controls telecom outfit Orbitel, chemical company Propilco and
TV network Caracol.

D O M I N I C A N   R E P U B L I C

EDE-ESTE: Parent Seeks To Sell Off Stake Before Year-End
U.S.-based power company AES Corp., (NYSE: AES) expects to
completely divest of its 50% stake in the Dominican Republican
power distributor AES Ede-Este by year-end.

Citing Ede-Este spokesperson Claudia Fernandez, Business News
Americas relates that there are three companies evaluating the
purchase of the utility. All of these interested parties are US-
based companies, Fernandez added.

According to a report by local paper Listin Diario, US company
Trust Company of the West (TCW) has already begun the buy-out
process. But Fernandez declined to confirm or reject the report.


EMPRESAS ICA: Slim Cuts Stake to 10.1%
Latin America's richest businessman Carlos Slim, his family and
related companies reduced their ownership in Empresas ICA, a
Mexican construction firm, reports Reuters. According to a U.S.
Securities and Exchange Commission filing on Friday, Slim and
family reduced their stake in ICA to 10.1% from 11.8%.

In January, Slim backed ICA's (NYSE:ICA; Mexico:ICA.MX) capital
increase, which has helped the Company control its debt

GRUPO MEXICO: La Caridad Workers End Strike
Unionized workers at Grupo Mexico's La Caridad copper mine,
smelter and refinery announced Friday an end to a strike that
has paralyzed nearly a third of the company's copper production
for 17 days.

According to the striking workers, Grupo Mexico has agreed to
pay miners a disputed MXN5,000 ($438) bonus payment and to count
a 30-minute and 1-hour lunch as part of the workday during the
day and night shifts. Workers at the said mine originally called
the strike on July 13 saying the Company had violated its labor

Meanwhile, workers with the same union will decide August 10
whether to strike at Grupo Mexico's Cananea copper mine. Union
miners have accepted a profit sharing offer of MXN3,500/worker
and will discuss additional contract details with the Company on
the August date.

But Grupo Mexico's international relations VP Juan Rebolledo
told Business News Americas that the agreement reached at La
Caridad bodes well for negotiations at Cananea.

"The [La Caridad] accord is a start and it should impact future

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

GRUPO TMM: Cuts Exchange Offer Quota for 2003 Notes to 95.3%
Grupo TMM, S.A. (NYSE:TMM - News; BMV: TMM A) announced Friday
that it has amended its previously announced exchange offer and
consent solicitation for its 9 1/2 percent Notes due 2003 ("2003
notes") and its 10 1/4 percent Senior Notes due 2006 ("2006

As a result of a broker miscommunication involving a tender of
2003 notes by two different nominees for the account of the same
beneficial holder, the previously announced results included a
double-counting of $600,000 of 2003 notes.

Consequently, the Company is reducing the minimum principal
amount of the 2003 notes that must be tendered in the exchange
offer from 95.7 percent to 95.3 percent. All other terms and
conditions of the exchange offer remain unchanged.

The exchange offer and consent solicitation is currently
scheduled to expire at midnight, New York City time, on August
5, 2004. As of 5:00 p.m., New York City time, on July 29, 2004,
$168,705,000 principal amount of the 2003 notes and $194,771,000
principal amount of the 2006 notes had been properly tendered
and not withdrawn.

In addition, Grupo TMM has also filed with the Securities and
Exchange Commission a Prospectus Supplement, which includes
additional disclosure. As described in the Prospectus
Supplement, the Company has entered in to an agreement with
certain holders of the existing 2003 notes and 2006 notes to
purchase additional notes identical to the notes to be issued in
the exchange offer in order to provide the Company with funds
sufficient to complete the exchange offer and pay fees and
expenses, assuming the exchange offer is completed on the
current terms. Holders of existing notes are urged to review the
Prospectus Supplement and the Prospectus and Solicitation
Statement previously filed with the Securities and Exchange

Headquartered in Mexico City, Grupo TMM is Mexico's largest
multimodal transportation company. Through its branch offices
and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in TFM, which operates
Mexico's Northeast railway and carries over 40 percent of the
country's rail cargo. Grupo TMM's web site address is and TFM's web site is Grupo TMM
is listed on the New York Stock Exchange under the symbol TMM
and Mexico's Bolsa Mexicana de Valores under the symbol "TMM A."

The exchange offer and consent solicitation are made solely by
the Prospectus and Solicitation Statement dated June 23, 2004,
as amended by the Prospectus Supplement dated July 23, 2004, and
the Prospectus Supplement dated July 30, 2004.

Copies of the Prospectus and Solicitation Statement, the
Prospectus Supplements and the other transmittal materials can
be obtained from Innisfree M&A Incorporated, the information
agent for the exchange offer and consent solicitation, at the
following address:

    Innisfree M&A Incorporated
    501 Madison Avenue, 20th Floor
    New York, New York 10022
    Toll Free: (877) 750-2689
    Fax: (212) 750-5799

         Investor Relations
         Brad Skinner, 011-525-55-629-8725 or 203-247-2420


         Media Relations
         Marco Provencio,
         011-525-55-629-8708 and 011-525-55-442-4948


         Dresner Corporate Services
         General Investors, Analysts and Media
         Kristine Walczak, 312-726-3600

PEMEX: Net Losses Double in 2Q04
Petroleos Mexicanos, Mexico's state-owned oil company, posted
MXN18.87 billion in losses in the second quarter of the year,
doubling the MXN9.01 billion in losses reported in the same
period a year ago, says Bloomberg.

The losses grew despite a 26% increase sales to MXN186.56
billion pesos on higher oil prices and record production. Record
production has failed to return Pemex to profitability as the
Mexican government extracts taxes worth more than 60% of the
Company's sales to fund public spending and as the Company's
financing costs rise, according to the report.

The Company now plans to spend about MXN120 billion this year on
exploration and production, up from MXN109 billion in 2003.

VITRO: Fitch Cuts Senior Unsecured Debt to 'B'
Fitch Ratings downgraded its senior unsecured foreign and local
currency ratings of Vitro, S.A. de C.V. (Vitro) to 'B' from 'BB-
'. Fitch has also downgraded Vitro's national scale ratings to
'BBB(mex)' from 'A+(mex)'. The ratings have been removed from
Rating Watch Negative and have been placed on Stable. Fitch has
also affirmed the short-term national scale rating at 'F2(mex)'.

Additionally, Fitch has assigned a rating of 'B+' to the recent
issue of senior secured guaranteed notes by Vitro Envases
Norteamerica, S.A. de C.V. (Vena). Fitch has also assigned a
rating of 'B-' to the 2007 11 3/8% notes issued by SOFIVSA and
the 2013 11 3/4% issued by Vitro.

Continued pressures on free cash flow have limited debt
repayment and leverage remains high. The challenging environment
deteriorated operating fundamentals and credit protection
measures to levels not commensurate with the prior rating
categories. Notwithstanding, Fitch believes that the ongoing
recovery in Vitro's markets and the company's internal cost-
reducing efforts should help stabilize financial indicators at
current levels.

The ratings also incorporate the structural subordination of the
unsecured local bonds. Last July 23, 2004, VENA, the holding
company of Vitro's glass containers division, issued senior
secured guaranteed notes for US$170 million due 2011. The notes
are secured by first priority liens on most assets of Vena's
Mexican subsidiaries' and of Vitro Packaging, Vena's U.S.-based
subsidiary. Fitch believes that the completion of this
transaction is a positive event that will improve Vitro's debt
maturity profile and enable the company to mitigate short-term
liquidity risk. However, the refinancing of debt with facilities
that include collateral security reflect certain limitations on
the company's financial flexibility.

During 2004, Vitro expects to generate a modest free cash flow
after covering fixed-asset investments and working capital
requirements. Fitch will continue to monitor the company's
developments and the ratings closely.

Vitro is the leading producer of flat glass, glass containers
and glassware in Mexico, servicing the construction, automotive,
beverage, retail, and service industries. Approximately one-half
of revenues are derived from exports and sales from foreign
subsidiaries located in the U.S., Spain, Portugal, Central
America, and Bolivia. In 2003, the company had sales of US$2.2
billion, EBITDA of US$364 million, exports of US$580 million,
and foreign sales by subsidiaries of US$638 million. Vitro is
headquartered in Monterrey, Mexico.


CANTV: Increases CapEx Target for This Year
CANTV, Venezuela's leading telecommunications firm, upped its
investment target for this year to between US$290 million -
US$350 million from its original budget of US$250 million,
reports Reuters. In a teleconference, Mr. Armando Yanes, CANTV's
chief financial officer, said the increase "is going to be
directed toward the expansion of the mobile network and
provision of additional capacity for broadband services."

CANTV revealed last week a second-quarter profit of US$50
million, compared to a US$14 million loss between April and June
of 2003, when the OPEC nation was recovering from a crippling
two-month oil strike.

CANTV's mobile phone branch showed the largest growth during the
second quarter of 2004, with a 45.6% increase in profits to
US$151 million compared with US$104 million during the same
period in 2003.

U.S. telecom Verizon Communications (NYSE:VZ) is CANTV's
principal shareholder.

CANTV: President Chavez Issues Warning Ahead of Referendum
President Hugo Chavez told CANTV to fairly transmit election
data during next month's referendum on his rule or else he would
take action, reports Reuters.

"This is not a threat, it is a warning. If the company in any
way lends itself to attempts to alter the referendum on Aug. 15,
then I have the decree ready for its intervention," Chavez said
without elaborating whether the decree called for a government
takeover or prosecution of executives.

Chavez is accusing the US government of intensifying its
offensive against Venezuela and that the Venezuelan opposition
is "pupils" of Washington seeking to produce violence during the

According to Chavez, intelligence reports show that the
opposition is analyzing the possibility of cheating the
electronic voting system during the referendum.

He added that the supposed electronic fraud would be supported
by CANTV, which will broadcast the data from the voting

But CANTV President Gustavo Roosen vowed to Venezuelan Vice
President Jose Vicente Rangel on Tuesday that CANTV would
provide a transparent process. He said there had been no
difficulties with previous elections.

"In respect to possible fraud, obviously these are rumors that
arise during times of friction and we are obliged to eradicate
them," Roosen told reporters.

Under the Venezuelan constitution, in order to oust Chavez, the
opposition has to collect votes equal or higher than that
obtained by the president in the 2000 election, which is at
least 3.7 million votes.

Chavez, who was elected in 1998 and re-elected to a six-year
term in 2000, has been accused by his opponents of wrecking
Venezuela's economy.

PDVSA: Congress to Begin Fund Inquisition
Venezuelan government officials are due to appear before the
National Assembly this week to answer questions regarding the
legality of a US$2 billion development fund organized by state
oil company Petroleos de Venezuela SA (PDVSA) earlier this year,
reports Dow Jones Newswires.

Ricardo Sanguino, vice-president of the Assembly's finance
commission said: "The opposition has judicial criticisms of the
fund... We are going to see if this is legally sound."

Oil Minister Rafael Ramirez is scheduled to appear before the
commission Tuesday to discuss the fund. Ramirez has failed to
appear at a number of Congressional hearings on the fund since
the account became public earlier this year.

PdVSA officials have said the account currently holds US$1.2
billion in windfall oil revenue. The account will be used to
revamp power plants, build roads, and finance a new state

SIDOR: More Employees Subscribe to PPL as Expiration Looms
Venezuelan steelmaker sold more than 2.57 million class B shares
to "eligible" employees, Business News Americas reports, citing
Sidor's controller, state heavy industry holding CVG. The
Venezuelan state owns 40% of Sidor's shares and started selling
one fifth of that amount two months ago as part of its Workers'
Participation Program (PPL).

The block on sale corresponds to around 3 million shares and is
entirely valued at US$62 million. The program, which expires on
August 4, has resulted in 10,031 new shareholders so far, and
has raised VEB111,2 billion (US$58 million).


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

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