TCRLA_Public/040806.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

             Friday, August 6, 2004, Vol. 5, Issue 155

                            Headlines

A R G E N T I N A

ACINDAR: S&P Maintains Default Rating on US$100M Bonds
ALPARGATAS: Fitch Retains Junk Status on 5 Bond Issues
BANCO B.I. CREDITANSTALT: $250M Bonds Carry Default Rating
CANADA MUEBLES: Court Rules Liquidation
DIMAR EDITORA S.A.: Court Orders Bankruptcy

EASA: Fitch Maintains D(arg) Rating on $200M ONs
EDESUR: Posts $2.3M Loss in 1H04
GABIKAR S.R.L.: Asks Court for Reorganization
GALA ROJA: Gears for Reorganization
GRAN DORA: Seeks To Restructure Debts

IMPSA: Moody's Maintains D Rating on Bonds
LA VAINILLA: Debt Payments Halted, Set To Reorganize
LAS TRES: Court Rules Bankruptcy
METALURGICA ELCH: Court Favors Creditor's Bankruptcy Call
METROGAS: Reports Net Loss of ARS16.8 Mln in 1H04

R.D. MOTORS: Judge Approves Bankruptcy Motion
VINTAGE PETROLEUM: Reports 2004 Activity Results; Updates Plans
WINE CONSULTING: Files Petition to Reorganize
* IMF Delaying $728M Loan for Argentina


B E R M U D A

FOSTER WHEELER: Reports $29.8M in Net Earnings for 2Q04
NORTHERN OFFSHORE: Oslo Bors Temporarily De-lists Shares, Bonds


B O L I V I A

* Republic of Bolivia Outlook Revised to Stable


B R A Z I L

ACESITA: First Half of 2004 Shows BRL461M EBITDA
BRASKEM: Seeks to Up Productivity to Meet Soaring Demand
CEMIG: Stockholders to Vote on Board Member Dismissal
CFLCL: To Boost Generation by 120GWh in November
GERDAU: To Issue $100M of Debt

MRS LOGISTICA: Posts BRL146.7M EBITDA in 2Q04
PARMALAT BRAZIL: Seeks Independence From Italian Parent



C H I L E

ENDESA CHILE: 1H04 Income Results Do Not Affect Rating
ENERSIS: Income Results for 1H04 Do Not Affect Rating


C O L O M B I A

BCI: Enters Into Agreement to Monetize Portion of Tax Losses


J A M A I C A

C&WJ: Demands Apology From OUR



M E X I C O

DESC: Enters Agreement To Sell 51% Stake in Velcon
PEMEX: Moody's Assigns MX-1 National Scale Short-term Rating


     -  -  -  -  -  -  -  -

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

ACINDAR: S&P Maintains Default Rating on US$100M Bonds
------------------------------------------------------
Standard & Poor's International Ratings, Ltd maintains its raD
rating on US$100 million worth of corporate bonds issued by
Acindar Industria Argentina de Aceros.

On its official web site, Comision Nacional de Valores (CNV)
described the bonds as "Obligaciones Negociables simples, no
convertibles en acciones, autorizadas por AGOyE de fecha
5.8.96". The bond issue matured on February 16 this year.

The rating action was taken based on the Company's finances as
of March 31, 2004.

CONTACT:  ACINDAR INDUSTRIA ARGENTINA DE ACEROS SA
          2739 Estanislao Zeballos Beccar
          Buenos Aires
          Argentina B1643AGY
          Phone: +54 11 4719 8500
          Fax: +54 11 4719 8501

          Web Site: http://www.acindar.ar.com


ALPARGATAS: Fitch Retains Junk Status on 5 Bond Issues
------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains the
`D(arg)' rating assigned on the following corporate bonds issued
by Alpargatas S.A.I. y C.:

- US$40M worth of "Eurobonos a Mediano Plazo - Serie X" with
undisclosed maturity date;

- US$5.1M worth of "O.N. convertibles" with undisclosed maturity
date'

- ARS70M worth of "Obligaciones negociables convertibles" with
undisclosed maturity date;

- US$81.1M worth of "Obligaciones Negociables Serie A por U$S
1.1 millones y Serie B por U$S 80 millones" with undisclosed
maturity date; and

- ARS80M worth of "Obligaciones Negociables Subordinadas
Obligatoriamente Convertibles en Acciones Ordinarias" that
matured on July 30, 2003.

The rating was given based on the Company's financial condition
as of March 31, 2004. A D(arg) rating is assigned to issues with
very low recovery potential.


BANCO B.I. CREDITANSTALT: $250M Bonds Carry Default Rating
----------------------------------------------------------
Fitch Argentina Calificadora de Reisgo S.A. retains the `D(arg)'
rating previously assigned on US$250M worth of bonds issued by
Banco B.I. Creditanstalt S.A.

Comision Nacional de Valores, Argentina's securities regulator,
labeled the affected bonds as "Programa Global de Emision de
Oblig. Negociables a Mediano Plazo". This bond issue matured on
July 28, 2000.

The rating action was taken based on the Company's finances as
of March 31, 2004.

CONTACT: Banco B.I. Creditanstalt S.A.
         Bouchard 547, 24o y 25o, 1106
         Buenos Aires
         Tel: (11) 4319-8400
         Fax: (11) 4319-8230
         Email: bicreditanstalt.com.ar

         Web Site: www.bicreditanstalt.com.ar


CANADA MUEBLES: Court Rules Liquidation
---------------------------------------
Court No. 6 of Santa Fe's Civil and Commercial Tribunal ordered
the liquidation of Canada Muebles S.R.L. after the company
defaulted on its debt obligations, Infobae reveals.

However, the court has not assigned a trustee to supervise the
proceedings. Also, relevant dates concerning the bankruptcy
process have not been revealed.

CONTACT: Canada Muebles S.R.L.
         Iriondo 541
         Ca ada de Gomez
         Santa Fe


DIMAR EDITORA S.A.: Court Orders Bankruptcy
-------------------------------------------
Judge Villanueva of Buenos Aires Court No. 23 declared Dimar
Editora S.A. bankrupt, says La Nacion.

The court-appointed trustee, Ms. Liliana Castineira, will
examine and authenticate creditors' claims until September 17,
2004. This is done to determine the nature and amount of the
Company's debts. Creditors must have their claims authenticated
by the trustee by the said date in order to qualify for the
payments that will be made after the Company's assets are
liquidated.

Dr. Cufari, Clerk No. 46, assists the court on the case, which
will conclude with the liquidation of the Company's assets.

CONTACT: Dimar Editora S.A.
         Charlone 1930
         Buenos Aires

         Ms. Liliana Castineira, Trustee
         Tucuman 983
         Buenos Aires


EASA: Fitch Maintains D(arg) Rating on $200M ONs
------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. confirmed the D(arg)
rating assigned to US$200 million worth of Obligaciones
Negociables ON issued by Electricidad Argentina S.A. (EASA).

EASA is struggling to meet debt obligations. Local distributor
Edenor, upon which EASA derives its sole income, has seen its
ability to generate funds deteriorate due to the peso
devaluation (70 %) over their debt nominated in dollars in view
of the pesification and tariff freeze. The recovery of the
financial flexibility as well as the regulatory frame
restitution applicable to Edenor will determine (in the medium
term) the credit profile of EASA.

EASA was founded in 1992 with the aim to acquire the majority
share capital of Edenor S.A. (51%). Edenor owns the concession
to supply electricity in the north area of Capital federal and
Greater Buenos Aires for a period of 95 years. Edenor is the
first electricity supplier company in Argentina with 2.27 M of
clients. EASA is controlled by EDF International (100%).


EDESUR: Posts $2.3M Loss in 1H04
--------------------------------
Power distribution company Edesur S.A. reported net losses
amounting to US$2.3 million for the first half of 2004 and Net
Equity of ARS2.1 billion as of June 30, 2004, Business News
Americas reports. The notice, submitted to the Buenos Aires
Stock Exchange, did not provide additional supporting details
for the stated loss.

Edesur holds an exclusive license to provide electricity
distribution services in the central and southern areas of
Buenos Aires as well as the southeastern portion of the Greater
Buenos Aires area. It serves a population of over 6 million
people making it the largest electric distribution outfit in
Argentina in terms of volume distributed.

CONTACT: Edesur S.A.
         San Jos, 140
         Buenos Aires
         Tel: 4383-0200
              4381-1313


GABIKAR S.R.L.: Asks Court for Reorganization
---------------------------------------------
Gabikar S.R.L., a company operating in Buenos Aires, requested
for reorganization after failing to pay its liabilities since
February 25, 2002.

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 Ojea Quintana of the city's
Civil and Commercial Tribunal Court No. 12. Dr. Perez, Clerk of
Court No. 23, assists on this case.

CONTACT: Gabikar S.R.L.
         Avenida de los Constituyentes 5918
         Buenos Aires


GALA ROJA: Gears for Reorganization
-----------------------------------
Judge Taillade of Buenos Aires' Civil and Commercial Tribunal
Court No. 20, assisted by Dr. Perillo, Clerk No. 40, issued a
resolution opening the reorganization of Gala Roja S.R.L.,
reports La Nacion

This pronouncement authorizes the Company to begin drafting a
settlement proposal with its creditors in order to avoid
liquidation. The reorganization further allows the Company to
retain control of its assets subject to certain conditions
imposed by Argentine law and the oversight of the court
appointed trustee.

Ms. Nora Roger will serve as trustee during the course of the
reorganization. She will be validating creditors' proofs of
claims until October 13, 2004.

The Company will present the completed settlement proposal to
its creditors during the informative assembly scheduled on
August 12, next year.

CONTACT: Gala Roja S.R.L.
         Maipu 763
         Buenos Aires

         Ms. Nora Roger, Trustee
         Hipolito Yrigoyen 1349
         Buenos Aires


GRAN DORA: Seeks To Restructure Debts
-------------------------------------
Judge Favier Dubois of Mar del Plata's Civil and Commercial
Tribunal Court No. 9 is now analyzing whether to grant Gran Dora
S.A. approval for its petition to reorganize.

La Nacion says that the company filed a "Concurso Preventivo"
petition following cessation of debt payments on July 29 this
year. Clerk No. 17, Dr. Raisberg de Merenzon, assists the court
on this case.

CONTACT: Gran Dora S.A.
         Avenida Callao 157
         Mar Del Plata


IMPSA: Moody's Maintains D Rating on Bonds
------------------------------------------
Argentina's securities regulator, CNV, reports that Moody's
Latin America Calificadora de Riesgo S.A. is maintaining a `D'
rating on the following bonds issued by Industrias Metalurgicas
Pescarmona:

- US$150M bonds described as "2 Serie emitida por U$S 150
millones del Programa Global de U$S 250 millones " that matured
on May 30 2002; and

- US$250M bonds described as "Programa de obligaciones
negociables" maturing on March 15, 2006.

The rating action was taken based on the Company's financial
status as of April 30, 2004.

CONTACT: Industrias Metalurgicas Pescarmona
         Rodriguez Pena 2451
         Godoy Cruz, Mendoza
         Argentina

         Telephone: 54 1 315 2400
         Fax: 54 1 315 2388


LA VAINILLA: Debt Payments Halted, Set To Reorganize
----------------------------------------------------
Judge Kolliker Frers of Buenos Aires' Civil and Commercial
Tribunal Court No. 16 is currently reviewing the merits of a
reorganization petition filed by La Vainilla de Oro S.A.

La Nacion recalls that the company filed the petition following
cessation of debt payments since August 31 last year.
Reorganization will allow the food processing company to avoid
bankruptcy by negotiating a settlement with its creditors.

Dr. Ibarzabal, Clerk No. 31, assists the court on this case.

CONTACT: La Vainilla de Oro S.A.
         Avenida Cabildo 1493
         Buenos Aires


LAS TRES: Court Rules Bankruptcy
--------------------------------
Judge Villanueva of Buenos Aires Court No. 23 decreed the
bankruptcy of Las Tres Z Construcciones S.R.L. upon the request
of Liberty Art S.A., reports La Nacion. The Company will begin
the process with Mr. Aldo Ruben Maggiolo as Trustee.

Mr. Maggiolo will verify creditors' claims until September 17,
2004. The Company's case will conclude with the liquidation of
its assets to repay creditors.

Dr. Timpanelli, Clerk No. 45, assists the court in handling the
proceedings.

CONTACT: Las Tres Z Construcciones S.R.L.
         Avenida Medrano 636
         Buenos Aires

         Mr. Ruben Maggiolo, Trustee
         Paraguay 610
         Buenos Aires


METALURGICA ELCH: Court Favors Creditor's Bankruptcy Call
---------------------------------------------------------
Banco Rio del Plata S.A. successfully sought the bankruptcy of
Metalurgica Elch S.A. after Judge Gutierrez Cabello of Buenos
Aires Court No. 7 declared the Company "Quiebra," reports La
Nacion.

As such, the Company will now start the bankruptcy process with
Mr. Carlos Carrescia as trustee. Creditors of the Company must
submit proof of their claim to the trustee before September 15,
2004 for authentication. Failure to do so will mean a
disqualification from the payments that will be made after the
Company's assets are liquidated.

The creditor sought for the Company's bankruptcy after the
latter failed to pay debts amounting to US$49,708.21.

Dr. Gardinieri, Clerk No. 14, assists the court on the case,
which will close with the liquidation of all Company assets.

CONTACT: Metalurgica Elch S.A.
         Aranguren 2040
         Buenos Aires

         Mr. Carlos Carrescia, Trustee
         Tucuman 1621
         Buenos Aires


METROGAS: Reports Net Loss of ARS16.8 Mln in 1H04
-------------------------------------------------
Argentine natural gas distributor Metrogas (NYSE: MGS) posted a
net loss of ARS16.8 million ($1=ARS3.0175) in the first half of
2004, the Company said in a filing to the Buenos Aires stock
exchange Wednesday.

A Dow Jones Newswires report suggested that the negative
performance can be attributed in part to the depreciation of the
peso during the first half of the year. The peso fell 3.3% in
the second quarter, after appreciating slightly in the first
quarter. The Company has debts of around US$440 million, which
it is trying to restructure. That means its debts in peso terms
increase as the peso weakens, the report said.

Metrogas has an exclusive concession to distribute gas within
the Buenos Aires area until 2027. During 2002, it delivered 203
billion cubic feet of gas, approximately 25% of all gas retailed
in Argentina, and its average daily firm transportation capacity
amounted to 805 million cubic feet. Total company equity at June
30, 2004 stood at ARS759 million.

U.K. energy company BG Group PLC (BRG) and Spain's Repsol-YPF SA
(REP) together control a 70% stake in Metrogas. Metrogas
employees own 10% of the company's shares and the rest floats on
the stock exchange. BG has indicated it is looking to reduce its
stake in the Company.

CONTACT:  MetroGAS S.A.
          Pablo Boselli, Financial Manager
          E-mail: pboselli@metrogas.com.ar
          Tel: 5411-4309-1511


R.D. MOTORS: Judge Approves Bankruptcy Motion
---------------------------------------------
R.D. Motors Sacif was declared bankrupt after Judge Chomer of
Buenos Aires' Civil and Commercial Tribunal Court No. 10
endorsed the petition filed by Mr. Javier Petterman for the
company's liquidation.

Argentine daily La Nacion reports that the creditor has claims
totaling US$98,507.65 against the auto retailing company.

The court assigned Ms. Laura Fiscina to supervise the
liquidation process as trustee. She will validate creditors'
proofs of claims until September 1, 2004.

Dr. D'Alesandri, Clerk No. 19, assists the court on this case.

CONTACT: R.D. Motors Sacif
         Avenida de Mayo 749
         Buenos Aires

         Ms. Laura Fiscina, Trustee
         Anchorena 675
         Buenos Aires


VINTAGE PETROLEUM: Reports 2004 Activity Results; Updates Plans
---------------------------------------------------------------
Vintage Petroleum, Inc. (NYSE:VPI) announced Wednesday the
results and status of its recent exploration and significant
exploitation activities and plans for the second half of 2004.
During the second quarter, Vintage made total non-acquisition
capital expenditures of $62.9 million, bringing the total for
the six months of 2004 to $115.2 million.

United States - Exploration

Vintage began 2004 with the largest inventory of domestic
exploration prospects in its history and has currently budgeted
$43 million for exploration. The company is focusing its U.S.
exploration efforts primarily in the Gulf Coast, California and
on new initiatives focused on unconventional gas resources.
Production commenced from the Tres prospect (High Island 55-L)
in early July as facility and pipeline construction was
completed. This company-generated prospect in Texas state waters
resulted in three successful wells that were drilled based on a
Miocene gas exploration target coupled with the re-development
of additional Miocene oil and gas sands. Current daily net
production of gas and condensate is approximately 10 MMcfe (20
MMcfe gross). It is anticipated that the daily production will
continue to increase during the third quarter to a net daily
rate of approximately 15 MMcfe (30 MMcfe gross). Vintage is the
operator and has a 65 percent working interest in this prospect.
As a result of this success, Vintage acquired the High Island
56-L lease on an adjacent block and recently drilled and
completed a well which targeted the same formation. This well
will be produced through the High Island 55-L platform
facilities and is scheduled to commence production during the
fourth quarter of 2004. At the company's East Donner prospect in
Terrebonne Parish, La., Vintage is participating in the drilling
of a well targeting multiple Miocene sands at a planned total
depth of 16,500 feet. Vintage has a 38 percent working interest
in this well which is currently drilling below a depth of 14,000
feet. Vintage also holds a 12.5 percent working interest in and
is participating in the drilling of a well at East Cameron 43.
The well, also targeting Miocene sands, is currently drilling at
10,000 feet with a planned total depth of 14,300 feet. In
California, Vintage has drilled a well in the San Joaquin basin
to a total depth of 12,700 feet to test an oil prospect in which
it holds a 50 percent working interest. Testing is underway and,
if successful, production could commence during the fourth
quarter 2004. Pending the results of this well, multiple offset
locations could be drilled.

The company and its partners were recently high bidders on two
Gulf of Mexico lease blocks. Vintage acquired a 15 percent
interest in West Cameron block 145, a gas prospect targeted to
spud early in the fourth quarter. Vintage also secured a 25
percent interest in West Cameron block 242, which is anticipated
to spud immediately following the drilling of the West Cameron
145 well. Both of these prospects are located in the federal
waters offshore Louisiana and target Miocene age formations at
depths of approximately 12,000 to 15,000 feet. Activity is also
underway on a Miocene prospect at Matagorda Island 639 with
drilling planned to commence during the third quarter of this
year. Vintage holds a 25 percent working interest in this
offshore Texas prospect. Also, in the onshore Texas Gulf Coast,
the company has secured an opportunity to re-develop a Frio gas
field with exploration upside. A 3-D seismic survey of the area
will commence in October with drilling to be initiated by the
second quarter of 2005. Vintage controls a 53 percent working
interest and will operate this prospect.

Late in 2003, the company began evaluation of the potential of
unconventional gas resource plays with the objective of
establishing a land position in two play concepts prior to year-
end 2004. To date, the company has identified and established an
acreage position in two unconventional gas resource plays and is
in the early stages of acquiring a lease hold position in a
third play. Based on this progress, the company is increasing
its 2004 exploration budget in order to fund the drilling of up
to five wells to test these unconventional plays. In the Palo
Duro basin of Texas, the company has secured a substantial lease
position and plans to spud the first of two exploratory wells in
the third quarter to evaluate commercial potential of the play.
The company has also secured a substantial lease position in the
Cherokee-Forest City basin of southeastern Kansas. Drilling
operations are underway on the first of two core holes that are
planned to provide information required to assess the gas
resource potential of this coal bed methane prospect.

International - Exploration

Based on the company's drilling success to date in Yemen and in
order to accelerate the drilling program at its An Nagyah field,
Vintage has increased its 2004 capital spending budget for
exploration and development in the country by $11.5 million. The
additional spending targets raising productive capacity of the
field toward the 10,000 barrel of oil per day capacity of the
central processing facility scheduled for completion early in
the second quarter 2005. The increased spending is allocated for
the drilling of additional development wells at its An Nagyah
field, two exploratory wells and other workover activity aimed
at increasing production in the near term. The most recent well,
the An Nagyah #9, has been drilled and completed with testing
activity currently underway. With the addition of the An Nagyah
#9, productive capacity in Yemen has risen to 2,080 net (4,000
gross) barrels of oil per day. Preparation to spud the nearby Al
Hareth X-1, an exploratory well targeting the Alif formation, is
also underway with the well anticipated to spud by mid-August.
Following the Al Hareth well, additional wells at An Nagyah are
planned during the second half of 2004. During the second
quarter, the company also drilled the Harmel #2 well for the
purpose of obtaining cores from the supra-salt oil reservoirs
discovered in 2000 by the Harmel #1. Following evaluation of the
core analysis, completion and stimulation work will commence to
further test commercial potential of these shallow, heavy oil
reservoirs. It is anticipated that this activity will commence
during the fourth quarter of 2004.

In its Po Valley gas exploration play in Italy, the company
drilled its first exploratory well in the Bastiglia concession
late in the second quarter. The play targeted shallow gas sands
in stratigraphic traps defined by 2-D seismic and a geochemical
survey. The target sands encountered in the Bastiglia 1-D well
did not contain commercial quantities of hydrocarbon, therefore
the well was plugged and abandoned. Further analysis of the
information gained from this well is underway, with a decision
regarding future exploration drilling in this play anticipated
before year end. In addition, 1,575 kilometers of 2-D seismic
acquired during 2003 covering the company's Bulgarian Black Sea
concession is under interpretation to aid in the detailed
mapping of large deep water structural features. After
completing the current geological and geophysical work, the
company expects to secure majority participation by an industry
deep-water partner to drill and operate this prospect.

Exploitation Activity

U.S. exploitation activity in the second quarter continued to
generate a significant volume of net production from the four
net wells drilled and 39 net workovers completed year-to-date.
First and second quarter activities have realized net daily
production of 1,900 barrels of oil equivalent (BOE). During the
second quarter, the company initiated a drilling and workover
program in its Main Pass 116 complex, in offshore Louisiana. A
recompletion on the Main Pass 111 A-1 well resulted in initial
net daily production of 2.5 MMcf (3.0 MMcf gross). The Main Pass
116-8 well was recently drilled and completed resulting in net
initial daily production of 4.6 MMcf (5.5 MMcf gross) from two
zones. In addition, the company has drilled the Main Pass 112-1
sidetrack and is completing three of six zones, having logged
over 100 feet of hydrocarbon bearing sands.

At its South Gilmer field in East Texas, the company has
recently initiated a five well drilling program which will
continue through the fourth quarter. Also, the company began a
12 well program to deepen, drill or sidetrack wells in its
Luling, Darst Creek and West Ranch field areas in the second
quarter. One well has been completed and is producing at a net
daily rate of 1.1 MMcf (1.3 MMcf gross).

In Argentina, drilling and workover activity continues at a
historically high level. Currently, there are four drilling rigs
and seven workover rigs operating in the company's core areas
located on the southern flank of the San Jorge basin. With the
recent agreement to acquire a wholly-owned subsidiary from Rio
Alto Resources International, Inc. which holds property on the
northern flank of the basin, plans are to further expand
activity by adding a fifth drilling rig by year end. During the
second quarter, 18 wells were drilled and completed. For the
first six months of 2004, 37 wells have been drilled and
completed with a 97 percent success rate, while another eight
wells are in various stages of drilling or completion. Vintage's
successful drilling program continues to be predicated upon the
use of 3-D seismic to pinpoint development locations. During the
last year, the company has added 201,000 acres of new 3-D
seismic to its existing inventory to support current and future
development activity. In addition to the seven workover rigs
currently in operation, the company plans to add up to three
additional workover rigs by year end. For the first six months
of 2004, 48 workovers were accomplished with another seven in
progress. Consistent with the company's plan to initiate
additional waterfloods in 2004, a significant portion of these
workovers targeted waterflood projects. Although production
results are not expected this year from these workovers,
waterflood response is anticipated to contribute to enhanced
production results in 2005.

Vintage Petroleum, Inc. is an independent energy company engaged
in the acquisition, exploitation and exploration of oil and gas
properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Okla., and its common shares
are traded on the New York Stock Exchange under the symbol VPI.

Website: http://www.vintagepetroleum.com


WINE CONSUTING: Files Petition to Reorganize
--------------------------------------------
Beunos Aires-based Wine Consuting S.R.L. filed a "Concurso
Preventivo" motion, reports La Nacion. The Company is seeking to
reorganize its finances after defaulting on its debts since July
14 this year. The Company's case is pending before Court No. 2
of the City's Civil and Commercial Tribunal, under Judge
Garibotto.

Dr. Romero, Clerk No. 4, assists the court on this case.

CONTACT: Wine Consuting S.R.L.
         Avenida Figueroa Alcorta 3351
         Buenos Aires


* IMF Delaying $728M Loan for Argentina
---------------------------------------
The International Monetary Fund is holding up its approval on
the US$728 million loan payment to Argentina, saying it wants to
assess the government's progress in debt restructuring talks and
in boosting utility rates, Bloomberg reports, citing Managing
Director Rodrigo Rato.

The fund is still working on the second-quarter review of
Argentina's economic performance and isn't scheduled to take up
the issue before it begins a two-week summer recess this week.

"At this time, it's not scheduled," Rato said.

The IMF's loan agreement with Argentina calls on the government
to make "good faith" efforts to advance negotiations with
creditors.



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

FOSTER WHEELER: Reports $29.8M in Net Earnings for 2Q04
-------------------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWLRF) reported on Wednesday net
earnings of $29.8 million for the second quarter of 2004, or
$0.61 per diluted share. This compares with a net loss for the
same quarter of last year of $29.3 million, or $0.72 per diluted
share. Revenues for the second quarter of 2004 totaled $669.8
million compared with $935.8 million in the second quarter of
last year. Consolidated earnings before income taxes, interest
expense, depreciation and amortization (EBITDA) for the second
quarter of 2004 were $83.6 million compared with $9.0 million in
the second quarter of 2003.

The quarter's results included a pre-tax gain of $8.7 million on
the sale of development rights related to an Italian power
project. The sale of the power project development rights was
recorded as a one-time gain, and the company anticipates no
further such sales this year. However, the business in Italy has
historically developed and sold such project rights, and it is
actively continuing to develop other project rights that are
expected offered in the future. The quarter's results also
included a net pre-tax asbestos gain of $1.7 million, and pre-
tax charges of $4.7 million for professional service expenses
and severance benefits driven by the company's balance sheet and
operational restructuring process. Last year's quarter included
pre-tax charges of $16.0 million for professional services and
severance benefits, pre-tax charges of $6.1 million resulting
from pension curtailment and revaluation, and net pre-tax
charges of $19.5 million related to five North American
projects.

"Project execution by our North American Power and European
Engineering and Construction Group operations was better than
expected and drove our quarterly earnings," said Raymond J.
Milchovich, chairman, president and chief executive officer.
"During the quarter, we successfully completed several large
projects ahead of schedule, earned performance bonuses, passed
performance tests, and agreed with a customer to eliminate any
warranty obligations on a major project. Although I am extremely
pleased with these results, I do not expect to see earnings of
this magnitude for the balance of the year. Several large
contracts were completed during the second quarter, and, over
the remainder of this year, we do not expect our remaining
backlog to generate the level of profits reported this quarter."

For the six months ended June 25, 2004, revenues were $1.4
billion, down from $1.7 billion in the first six months of last
year. The net earnings for the period were $25.5 million
compared with a net loss of $49.2 million in the first six
months of 2003. Pre-tax charges of $60.8 million were included
in the first six months of 2003.

Extension for Filing Form 10-Q

The company also stated on Wednesday that it is extending
through August 9, 2004 the time for filing its Form 10-Q for the
second quarter of 2004. It is doing so because one of the
company's foreign subsidiaries is a party to performance bonding
arrangements with financial institutions that contain certain
financial covenants. The company requires additional time to
evaluate its compliance and course of action with respect to
these financial covenants. In connection with this analysis, the
company is also evaluating the effectiveness of its disclosure
controls and procedures.

The company expects its usual earnings conference call to be
rescheduled for a date in the near future, which date will be
separately announced.

Worldwide Cash and Domestic Liquidity

Worldwide, total cash and short-term investments at the end of
the quarter were $404.7 million, compared with $430.2 million at
year-end 2003, and $419.3 million at the end of the second
quarter of 2003. The quarter-end cash and short-term investments
included $327.2 million held by non-U.S. subsidiaries. As of
June 25, 2004, the company's indebtedness was $1.0 billion, down
$16 million from year-end 2003 and $75 million from the end of
the second quarter of 2003.

"Assuming we successfully complete our equity-for-debt exchange
offer and replace our existing revolving credit facility with a
new multi-year facility, we forecast that our domestic
liquidity, which includes cash and unused credit line
availability, will remain sufficient throughout the next 12
months," commented Mr. Milchovich.

The company recently announced that significant numbers of
institutional investors have agreed to tender their securities
in the exchange offer. The company is in the process of
distributing offering materials related to the exchange offer as
amended. The exchange offer has been extended through August 30,
2004, subject to further extension.

Bookings and Segment Performance

New orders booked during the second quarter of 2004 were $707.0
million, up approximately 9% from $647.1 million in the second
quarter of last year. In the quarter, new orders exceeded
revenues for the first time since the third quarter of 2002. The
company's backlog at the end of the second quarter of 2004 was
$2.3 billion, down from $3.3 billion at the end of the second
quarter of 2003, and essentially flat with year-end 2003.

Second-quarter new bookings for the Engineering and Construction
(E&C) Group were $601.9 million, up from $460.4 million during
the year-ago quarter and at the highest level for our current
E&C businesses since the fourth quarter of 2001. The Group's
quarter-end backlog was $1.6 billion, down $0.6 billion compared
with $2.2 billion at the end of the second quarter of 2003, but
up from $1.3 billion at year-end 2003. Revenues for the E&C
Group in the second quarter of 2004 were $426.1 million, down
approximately 19% compared with $529.2 million in the second
quarter of 2003. The Group's EBITDA was $55.9 million this
quarter, up substantially from $13.9 million for the same period
last year. Included in EBITDA for this quarter is a gain of $8.7
million on the sale of the development rights on a power project
in Italy. Last year's EBITDA included a gain of $2.5 million on
the settlement of a claim and losses of $15.0 million on three
separate projects.

New bookings in the second quarter for the Energy Group were
$105.2 million, compared with $187.4 million in second quarter
2003. Backlog at quarter-end was $692.8 million, down
substantially from $1.2 billion at the end of the second quarter
of 2003. Energy Group revenues for the quarter were $256.3
million, compared with $409.3 million in the same quarter of
2003. The Group's EBITDA for the quarter was $48.3 million
compared with $29.3 million in the same quarter last year.

Non-Cash Amounts Related to Asbestos

The company settled with additional asbestos insurance carriers
during the second quarter of 2004, reversing an additional $1.7
million of a $68.1 million non-cash charge recorded in the
fourth quarter of 2003. This brings, as anticipated, the total
amount of the 2003 charge reversed to $13.4 million. The company
plans to continue its strategy of settling with insurance
carriers by monetizing policies or arranging coverage in place
agreements. This strategy is designed to reduce future cash
payments from the company to cover asbestos liabilities. The
company continues to project that it will not be required to
fund any asbestos liabilities from its cash flow before 2010.

Calculation of EBITDA

Management uses several financial metrics to measure the
performance of the company's business segments. EBITDA is a
supplemental, non-generally accepted accounting principle (GAAP)
financial measure. EBITDA is defined as earnings/(loss) before
taxes, interest expense, depreciation and amortization. The
company presents EBITDA because it believes it is an important
supplemental measure of operating performance. A reconciliation
of EBITDA, a non-GAAP financial measure, to net earnings/(loss),
a GAAP measure, is shown below.

       RECONCILIATION OF EBITDA TO NET EARNINGS/(LOSS)
               (In Millions of Dollars)

Three months ended June 25, 2004
                                       Corporate
                                           &
                              E&C  Energy Financial Total
                             ------------------------------
EBITDA                        55.9   48.3    (20.6)  83.6
Less: Interest Expense(*)     2.8    8.3     14.5   25.6
Less:  Depreciation and
       amortization           2.7    5.1      0.6    8.4
                             ------------------------------
Earnings/(loss)
before income taxes         50.4   34.9    (35.7)  49.6
Less:  Provision/(benefit)
       for income  taxes     12.5   17.9    (10.6)  19.8
                             ------------------------------
                             ------------------------------
Net earnings/(loss)          37.9   17.0    (25.1)  29.8
                             ------------------------------

Three months ended June 27, 2003
                                        Corporate
                                            &
                              E&C  Energy Financial Total
                             ------------------------------
EBITDA                       13.9   29.3    (34.2)   9.0
Less:  Interest Expense(*)    1.4    7.2     14.3   22.9
Less:  Depreciation and
       Amortization           2.2    5.2      1.1    8.5
                            ------------------------------
Earnings/(loss)
before income taxes         10.3   16.9    (49.6) (22.4)
Less:  Provision/(benefit)
       for income taxes       2.2    6.1     (1.4)   6.9
                           ------------------------------
                           ------------------------------
Net earnings/(loss)           8.1   10.8    (48.2) (29.3)
                           ------------------------------

(*) Includes interest expense on subordinated deferrable
interest debentures in 2004 and mandatorily redeemable preferred
security distributions of subsidiary trust in 2003.

The company believes that the line item on its consolidated
statement of operations entitled "net earnings/(loss)" is the
most directly comparable GAAP measure to EBITDA. Since EBITDA is
not a measure of performance calculated in accordance with GAAP,
it should not be considered in isolation of, or as a substitute
for, net earnings/(loss) as an indicator of operating
performance.

EBITDA, as the company calculates it, may not be comparable to
similarly titled measures employed by other companies. In
addition, this measure does not necessarily represent funds
available for discretionary use, and is not necessarily a
measure of the company's ability to fund its cash needs. As
EBITDA excludes certain financial information compared with net
earnings/(loss), the most directly comparable GAAP financial
measure, users of this financial information should consider the
type of events and transactions which are excluded. EBITDA,
adjusted for certain unusual and infrequent items specifically
excluded in the terms of the Senior Credit Facility, is also
used as a measure for certain covenants under the Senior Credit
Facility.

The company's non-GAAP performance measure, EBITDA, has certain
material limitations as follows:

- It does not include interest expense. Because the company has
borrowed substantial amounts of money to finance some of its
operations, interest is a necessary and ongoing part of its
costs and has assisted it in generating revenue. Therefore, any
measure that excludes interest expense has material limitations;

- It does not include taxes. Because the payment of taxes is a
necessary and ongoing part of the company's operations, any
measure that excludes taxes has material limitations;

- It does not include depreciation. Because the company must
utilize substantial property, plant and equipment in order to
generate revenues in its operations, depreciation is a necessary
and ongoing part of its costs. Therefore any measure that
excludes depreciation has material limitations.

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.

To view financial statement, please visit:
http://bankrupt.com/misc/FW_2Q04.pdf

CONTACT: Foster Wheeler Ltd.
         Media:
         Ms. Maureen Bingert
         908-730-4444
              or
         Investors:
         Mr. John Doyle
         908-730-4270
              or
         Other Inquiries:
         908-730-4000

         Web Site: http://www.fwc.com


NORTHERN OFFSHORE: Oslo Bors Temporarily Delists Shares, Bonds
--------------------------------------------------------------
The Oslo Bors has decided to temporarily delist the shares and
bonds of Northern Offshore Ltd. This decision follows a formal
request made by the court-appointed Joint Provisional
Liquidators, as appointed by the Supreme Court of Bermuda,
acting on behalf of the company. The shares and bonds of NOF
have been suspended from trading since July 14, and will be
temporarily de-listed effective August 5.

The background for this decision is that the outcome of the on-
going negotiations regarding a potential restructuring of the
company is highly uncertain. Furthermore, under the
circumstances the company is not fully able to meet its
obligations as a public listed company, including its
information disclosure requirements.

The state of temporary delisting may last up to four months. The
shares and bonds may be relisted before the expiry of this
period providing certain conditions are met. Within four months,
the Oslo Bors must decide on continued temporarily delisting,
permanent delisting or relisting of these instruments.



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

* Republic of Bolivia Outlook Revised to Stable
-----------------------------------------------
Standard & Poor's Ratings Services revised its outlook on the
Republic of Bolivia to stable from negative.

Standard & Poor's also said that it affirmed its 'B-' long-term
and 'C' short-term credit ratings on the sovereign.

"The results the government obtained in the referendum and the
peaceful and orderly nature of the voting process open an
opportunity for the government to regain political momentum to
move ahead with two politically sensitive issues," said Standard
& Poor's credit analyst Sebastian Briozzo. "These are the
approval of a new hydrocarbon law that establishes a workable
tax structure for the sector and a final decision on the port
through which the country will export natural gas to North
America."

However, the still low 'B-' rating reflects the significant
challenges the administration faces in the highly uncertain
environment, especially given the lack of explicit support from
the traditional parties in the Bolivian Congress. "Because of a
recent recovery in the economy bolstered by increasing exports
in the hydrocarbon, agricultural and mining sectors, GDP is
expected to increase 3.5% in 2004," Mr. Briozzo added.
"Nevertheless, social conditions remain fragile, complicating
the country's ability to resolve sensitive political issues,
particularly in the hydrocarbons sector."

Action is required to put the country on a more sustainable
footing in light of significant fiscal imbalances and weak
financial and corporate sectors. The 2004 deficit is estimated
to exceed 6% of GDP (even including grants for about 3.4% of
GDP). To cover its remaining financing need, the government will
rely on additional funds already committed by multilateral
agencies under a stand-by agreement with the IMF that was
recently extended to December 2004 and domestic capital markets.

Going forward, the approval of a hydrocarbon law that allows for
the sustainable development of that important industry and the
final determination of a port for the export of gas will help
Bolivia fulfill its growth potential, enhancing the country's
creditworthiness.

Conversely, an increase in the level of political or social
tension that put at risk the willingness or ability of the
country to serve its financial obligations will pressure the
rating downwards.

ANALYSTS:  Sebastian Briozzo, New York 212-438-7342
           Jane Eddy, New York (1) 212-438-7996



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

ACESITA: First Half of 2004 Shows BRL461M EBITDA
------------------------------------------------
ACESITA S.A. (BOVESPA: ACES3 and ACES4, OTC: ACABY/ACAHY), the
only integrated stainless and silicon flat steel producer in
Latin America and leader of this business segment in Brazil,
released on Wednesday its second quarter 2004 (2Q04) results.

All operating and financial information, except where otherwise
indicated, is presented Brazilian Reais (R$), based on the
Parent Company's figures as per the Brazilian Corporate Law,
except where otherwise indicated.

Commentary by Gilberto Audelino Correa, CFO and IRO:

"As expected, the first half of 2004 was marked by a business
environment favorable to Acesita, both domestically and abroad.
A combination of market conditions - namely, a larger demand,
higher prices and wider margins than those in the last years -
coupled with efficiency and productivity gains in our production
lines and a more flexible product mix, allowed us to increase
our net revenue and cash flow (EBITDA) by 39% and 84%,
respectively, when compared to the first half of 2003.

In the first half of 2004, Acesita sold 380,000 tons. The
domestic sales increased 12% and the exports 24% from the
corresponding period in 2003, confirming the wide acceptance and
competitiveness of our products in the international market. As
far as we see it, the most important accomplishment in the first
half of 2004 was the achievement of operating stability and
consistent results, which exceeded the projections made upon the
completion of our operational restructuring two years ago.
Acesita's performance in the referred period points to an annual
net revenue of R$3 billion.

The ongoing financial restructuring program initiated in 2003
for the purpose of reducing our net debt and extending the terms
to maturity of debt repayments has progressively diminished the
debt service and gradually improved our capital structure, with
clear benefits for the Company.

The favorable conditions observed in the first half of the year
in relation to demand and price should remain unchanged in the
second semester. Such expectations, allied with the consistency
of our operations, warrant an optimistic outlook for 2004, a
year of consolidation for our business activities."

OPERATING PERFORMANCE

Market

Brazil began to show signs of economic recovery in the first
half of the year, leading market agents to review their
projections. Some analysts are presently working with growth
estimates between 3.5 % and 4.0 % for 2004. This improvement in
economic activity, which was basically bolstered by companies
with large-scale export operations in the first few months of
the year, is now reverberating through the domestic market as
well.

Acesita's total sales in 2Q04 continued to grow as in the
previous quarter, amounting to 206,500 tons, up 20.0% from the
corresponding period in 2003. This increase was observed both
domestically (up 19.0%) and in the export market (up 22.2%).
Sales in the first half of 2004 (1H04) totaled 380,400 tons,
exceeding the volume sold in 1H03 by 15.6%.

Asia is still the most important destination for Acesita exports
(43.9% of the total volume reported in 1H04), although shipments
to China have declined along with the demand from that market.
Part of the sales previously made to Asia has been absorbed by
Europe and other South American countries, all of which are more
profitable for Acesita.

Europe was the second destination for Acesita exports. Sales to
this region jumped from 15.9% of total exports in 1H03 to 22.5%
in 1H04.

Sales

Stainless steel is the most important item in Acesita's sales
mix, accounting for 47.9% of the total volume sold in 2Q04 and
52.2% of the total volume marketed in 1H04. As a result of more
favorable market conditions, stainless steel sales grew 9.1% in
2Q04 and 10.1% in 1H04 when compared to the respective periods
in 2003.

Confirming a trend already observed in 1Q04, (Non-Oriented Grain
- NOG and Oriented Grain - OG) silicon steels - the second most
important item in Acesita's sales mix - were responsible for
much of the sales growth in 2Q04.

The volume of silicon steel sold rose 39.0% against the same
period in 2003. The growing demand for such types of steel -
basically used to manufacture electrical engines, transformers
and reactors - reflects the country's higher economic activity.
In 1H04, silicon steel sales amounted to 82,100 tons, up 26.5%
from the volume sold in 1H03. The business of OG silicon steels,
albeit not highly representative in total sales, showed the
largest sales growth rate, namely 81.8% and 54.4% in comparison
to 2Q03 and 1H03, respectively.

Carbon / Alloyed steel sales increased at just about the same
rate as the sales of other Acesita product lines, up 31.2% in
2Q04 and 21.0% in 1H04, when compared with the corresponding
periods in 2003.

Sales - Domestic Market

Sales to the domestic market totaled 141,600 tons in 2Q04 and
254,200 tons in 1H04, representing an increase of 19.0% and
12.0%, respectively.

All the major market segments where Acesita operates contributed
to this improvement in domestic sales. The sharper increase in
economic activity in 2Q04 had a positive impact on domestic
sales, which grew 25.7% in relation to 1Q04. Sales of stainless
steel products, the most important item in terms of sales
volume, rose 17.0% when compared to the volume marketed
domestically in 2Q03.

Sales - Export Market

By the same token, Acesita showed a good performance in the
export market. Exports in 2Q04 amounted to 64,900 tons, raising
the volume sold in 1H04 to 126,100 tons, up 22.2% and 23.6 %
from the respective periods in 2003.

Stainless steels are still the Company's chief export product
line. However, despite a 10.9% growth in export volumes when the
first semesters of 2003 and 2004 are compared, the share of this
line in our export sales mix dropped from 95.9% in 1H03 to 86.1%
in 1H04, basically on account of the significant growth in (OG
and NOG) silicon steel and carbon/alloyed steel sales over the
period.

Prices

International stainless steel prices continued to rise in 2Q04.
Domestic prices also climbed, because they tend to follow
international rates quite closely. The prices practiced by
Acesita were converted into US dollar, reflecting the volatility
in the exchange rate, which explains the apparent decline in
domestic prices in May, when the Brazilian real devalued 6%
against the U.S. dollar.

FINANCIAL AND ECONOMIC PERFORMANCE

Net Operating Revenue

Acesita reported net revenues of R$820.6 million in 2Q04,
maintaining the upward trend observed in the previous quarters.
This represents an increase of 52.9% in relation to 2Q03, when
stainless steel prices were much lower than they are today, and
a 22.1% improvement in comparison with 1Q04.

Thanks to this result, the net revenue for 1H04 totaled
R$1,492.9 million, up 38.5 % from the same period in 2003. This
growth can be attributed to an increase in sales volumes and
prices, in addition to a greater operating stability,
flexibility and dynamism in Acesita's production lines, which
allowed the Company to increase the share of higher value-added
products in its product portfolio.

Costs

Reflecting the favorable market conditions for its major inputs,
Acesita was able to achieve a significant improvement in
profitability in 2Q04. The price of nickel - the raw material
with the greatest impact on Company's cost structure - fell
practically throughout the whole period, more specifically from
January to early June, when it began to bounce back in the
international market, with a minor impact on its production
costs in 2Q04.

In the case of exports to markets that do not practice alloy
surcharge mechanisms (trading practice that allows to adjust
stainless steel prices by the variation occurred in alloy
prices), the Company is exposed to risks between the date when
the purchase price of nickel is fixed and the date when the
selling price of stainless steel is closed.

With regard to this portion, Acesita maintains nickel hedge
operations in the international commodities exchanges, as a
means to cushion the impact of any sharp variations in nickel
prices on the Company's results.

The hedging mechanism allows Acesita to "transfer" the price of
this input on its date of purchase to the date of sale of the
stainless steel product. The net effect of such nickel hedge
operations in 1H04 was a surplus of R$ 1.6 million.

2Q04 costs also include the hike in coal prices, which is
acquired from Acesita Energetica. Being Acesita's wholly-owned
subsidiary, the impact from such price increases turns out to be
compensated by the accounting effect booked on the equity from
affiliates.

Gross Profit

The cost of goods sold (COGS) rose less than operating net
revenue, resulting in a larger gross margin both in 2Q04 and
1H04. Two factors contributed to the growth in net revenue: the
operating stability attained in Acesita's production lines and
processes, and the presence of more favorable market conditions.

With regard to costs, there was the positive effect of declining
nickel prices, coupled with the efforts to keep costs under
control. Consequently, Acesita reported a higher gross profit in
2Q04 than in the previous quarter, namely R$ 295.1 million
versus R$ 237.3 million. Gross margin rose from 23.8% in 2Q03 to
36.0% in 2Q04, and from 27.9% in 1H03 to 35.7% in 1H04.

Operating Expenses

Operating expenses in 2Q04 amounted to R$ 79.2 million, up 40.5%
from 2Q03 and 39.0% from 1Q04. Part of this increase refers to
higher selling expenses due to the larger volume of shipments
and to problems with port logistics since the beginning of the
year. Heavier trading with China has demanded more ships heading
for Asia to the detriment of other regions. Thus, carriers are
not only deploying a smaller number of ships but also sending
deeper draft vessels, which cannot enter the Port of Vitoria. To
make matters worse, the ports have run short of containers.

This state of affairs has raised the freight expenses due to the
reorientation to other ports (e.g. Rio de Janeiro and Santos),
in addition to obstructing export operations and the entry of
imported raw materials.

The operating expenses in 2Q04 were also pushed up by "other
operating expenses" in the amount of R$16.1 million, including
an allowance (R$ 10.0 million) to account for the issues related
to social contribution on third-party services and bonuses to
employees.

Acesita's operating margin (EBIT margin) fell in line with the
figure posted in 1Q04, despite the referred increase in
expenses, closing the semester at 26.5% (18.1% in 1H03).

Operating Cash Flow - EBITDA

As a result of the good performance outlined above, EBITDA
continued to grow from the levels attained in the previous
quarters, amounting to R$ 250.5 million, up 151.0% from the same
period in 2003. EBITDA margins totaled 30.5%, very close to the
percentage observed in 1Q04 (31.4%) and much higher than the
margin reported in 2Q03 (18.6%), thus maintaining Acesita among
the world's top steel mills in terms of operating profitability.

The improvement in both the Company's operating performance and
the macroeconomic condition, both domestically and abroad,
resulted in higher sales volumes during the semester, and
allowed for more favorable prices and margins as well (higher
prices for finished products coupled with the lower cost of
nickel, its single most important input). Consequently, EBITDA
for 1H04 grew 83.8% versus the result posted in 1H03, while
EBITDA margins jumped from 23.3% to 30.9%.

Equity from Affiliates and Non-Operating Result

The result obtained by equity from affiliates in 2Q04 was R$
24.7 million superior to that reported in the previous quarter,
reflecting a gradual and continuous improvement in market
conditions. Basically, this difference can be attributed to the
results of Company shareholdings in Acos Planos do Sul S.A / CST
and Acesita Servicos Com. Ind. E Participacoes, including the
higher profitability achieved by Acesita Energetica on account
of the hike in coal prices.

The equity from affiliates in 1H04 totaled R$ 60.9 million, down
R$ 39.8 million from the amount observed in 1H03, primarily due
to the disposal of part of the Company's interest in Cia.
Siderurgica Tubarao (CST), where Acesita still holds a 5.7%
stake.

Non-operating results for the first half of 2004 was a R$ 34.4
million deficit, basically due to an allowance for the
adjustment of Acesita's current interest in CST to the estimated
value. Financial Result Acesita's permanent efforts to
restructure and minimize its financial liabilities - by reducing
net debt, extending the terms to maturity of debt repayments,
obtaining funds or financing at lower costs, resorting to
hedging strategies, etc. - helped to decrease net financial
expenses (excluding the effects of currency variations) by R$
46.6 million from 2Q03 to 2Q04, and by R$ 108.0 million from
1H03 to 1H04.

Of a total gross debt of R$ 1,926.3 million as at June 30, 2004,
87.2% is denominated in foreign currency. Considering that 57%
of the contracts are naturally hedged against exchange
variations by exports, and 23% are covered by FX swap
operations, coupled with the fact that the Parent Company
together with its wholly-owned subsidiary Acesita International,
had investments pegged to exchange variation in the amount of
R$195.8 million as of June 30, 2004 (equivalent to 10.2% of
total gross debt), there was no exposure to exchange variation
on the financial standpoint. On the accounting standpoint,
however, the company's financial results are subject to strong
impact from currency fluctuations. This is due to the time lag
between the actual export revenue inflow and the dollar-
denominated funding registration.

The 7.6% depreciation of the real against the U.S. dollar in
1H04 - as compared to an 18.7% appreciation over the same period
in 2003 -explains the evolution of the net monetary variations
in opposite directions over these two periods.

Income Tax

Allowances for the payment of Income Tax and Social Contribution
on Net Income totaled R$34.4 million in 2Q04, versus R$ 20.3
million in 1Q04. Income Tax and Social Contribution paid in 1H04
represented 3.7% of net revenues over the period. The actual
Income Tax and Social Contribution load reflects the 30%
compensation of the taxable income during the period by using
the tax loss carryforwards.

Net Income

The achievement of operating stability coupled with the
recovering cycle of both prices and demand, resulted in a R$
91.0 million net income for 2Q04. Following a consistent trend
of positive results, Acesita accumulated a R$ 191.1 million net
income at the end of 1H04, up 88.6% from the R$ 101.3 million
reported in 1H03.

CAPITAL EXPENDITURE (CAPEX)

After a period of heavy capital investments - approximately US$
770.0 million since privatization - Acesita has no plans for any
such expenditures in the short term. The Company's top priority
for the next few years is to improve its capital structure by
using the free cash flow to reduce its debt.

Capital expenditures totaled R$ 17.5 million in 2Q04, up R$ 9.5
million from the amount invested in 1Q04. As for the first half
of 2004, the Company has already spent R$ 25.5 million, or 30.0%
of the total amount earmarked for the entire year.

OUTLOOK

If the economic fundamentals remain strong and the market
conditions favorable, as observed throughout the first semester,
the year 2004 may turn out to be quite positive for Acesita's
operations, with the normalization of industrial activities and
the consolidation of managerial and organizational procedures.

CAPITAL MARKET

The Sao Paulo Stock Exchange Index (Ibovespa) fell 4.5% in 2Q04,
while Acesita's preferred shares appreciated 23.0% over the same
period. Altogether, 30,355 transactions were registered in 2Q04,
involving approximately 218 billion preferred shares issued by
Acesita, 46.7% more than the volume of operations reported in
2Q03.

The average daily trading volume in 2Q04 was R$ 7.9 million at
Bovespa, up 138.7% from the same period in 2003. Acesita shares
were traded in 100% of the trading sessions held at Bovespa,
accounting for 14.7% of the total amount of transactions (or
7.0% of overall financial volume) in the steel industry.

To View financial statements, please visit:
http://bankrupt.com/misc/Acesita_1SA.pdf

CONTACTS: Mr. Fabio Abreu Schettino
          Financial Operations and Investor Relations Manager
          Tel: (+5531) 3235-4241

          Ms. Adriana Fernandes
          Investor Relations Coordinator
          Tel: (+5531) 3235-4270
          www.acesita.com.br

          Ms. Doris Pompeu Brasil
          Consultant
          Tel: (5511) 3171-2929
          doris.pompeu@globalri.com.br

          Web Site: www.acesita.com.br


BRASKEM: Seeks to Up Productivity to Meet Soaring Demand
--------------------------------------------------------
Trying to keep up with the escalating demand for petrochemicals
in recent months, Brazilian petrochemical group Braskem will
increase output in several units, Business News Americas
reports, citing Braskem CEO Jose Grubisich.

In addition to the Company's plans to increase capacity at its
PVC unit in Alagoas state by 50,000 tonnes a year (t/y) by July
2005, Braskem is also starting a US$4 million investment program
to increase output of its polyethylene plant in the Camacari
complex by 15% to 230,000t/y by August 2005.

Braskem recently concluded a US$7-million investment program to
increase ethylene production by 100,000t/y at its Triunfo plant
and a 50,000t/y capacity increase at its paraxylene plant, also
in Camacari.


CEMIG: Stockholders to Vote on Board Member Dismissal
-----------------------------------------------------
Stockholders of Cemig are called to an Extraordinary General
Meeting, to be held on 20 August 2004 at 10.30 a.m. local time
(GMT-3), at the company's head office, Avenida Barbacena 1200,
18th floor, Belo Horizonte, in the state of Minas Gerais,
Brazil, to decide on a proposal for dismissal of a member of the
company's Board of Directors, and consequent election of sitting
and substitute members of the said Board, by the cumulative
voting method, pursuant to a request by the stockholder State of
Minas Gerais.

Pursuant to Clause 3 of CVM Instruction 165 of 11 December 1991,
notice is hereby given that adoption of a requisition to elect
members of the Board by the cumulative voting method requires
the affirmative vote of stockholders representing in aggregate a
minimum of 5% (five percent) of the company's total voting
stock.

Any stockholder who wishes to be represented by proxy in this
General Meeting should obey the terms of Article 126 of Law
6406/76, as amended, and the sole paragraph of Article 9 of the
company's By-laws, by depositing, preferably by 18 August 2004,
proofs of ownership of the shares, issued by a depositary
financial institution, and a power of attorney with specific
powers, at the management office of the General Secretariat of
the company at Av. Barbacena 1,200 - 19th floor, B1 wing, Belo
Horizonte, state of Minas Gerais, Brazil, or by showing the said
proofs of ownership at the time of the meeting.

CONTACT: Companhia Energetica de Minas Gerais (CEMIG)
         Avenida Barbacena, 1.200 - Terreo
         Belo Horizonte,  30190
         Phone: (877) 248-4237
         Email: rv@cemig.com.br

         Web Site: www.cemig.com.br


CFLCL: To Boost Generation by 120GWh in November
------------------------------------------------
The Investor Relations department of Sistema Cataguazes-
Leopoldina issued the following highlights in its activities for
July 2004:

1. Company Generation to be Boosted by 120GWh by November

The construction work on the Ivan Botelho III SHP (the new name
of the Triunfo SHP), which has an annual production capacity of
120 GWh (24.4 MW), is on schedule. The first generator of this
SHP is scheduled to come into operation in November and the
second in December this year.

The treatment of the dam foundations has been completed and the
execution of the earth dam continues at a fast pace. Sixty-five
percent of the pentstocks have been completed. The concrete
construction work on the powerhouse is at the final stage and
the assembly of the piping in the hydraulic units has begun.

This is the last SHP to be completed of the 5 SHPS which are
part of the Sistema Cataguazes-Leopoldina's project to generate
its own energy and which began to be constructed at the same
time, in mid-2002.

The electrical energy generation plant of the Sistema
Cataguazes-Leopoldina is currently comprised of 19 SHPs (total
installed capacity of 105 MW and annual production of 525 GWh)
and 50% of a thermoelectric power station (the 87 MW Juiz de For
a Thermoelectric power station, with annual production capacity
of 650 GWh).

2. New Software Enhances Business Management Program of the
Sistema Cataguazes-Leopoldina

A new set of software developed by the Sistema Cataguazes-
Leopoldina is already up and running which is capable of
enhancing the collection of information and monitoring the
operating and financial figures of CFLCL and its subsidiaries
CENF, Energipe, CELB and Saelpa.

The primary objective of the software, which has incorporated
the strategic management program initiated in 2001 by the
Sistema Cataguazes-Leopoldina, is to lower controllable
expenditure, consumer default rates and the consolidated rate of
technical and commercial losses which should lie below 14% in
2004 (14.85% in 2003), resulting in savings of approximately
R$20 million for the period.

To view the accompanying table, please visit:
http://bankrupt.com/misc/SC_Monthly.pdf

3. Consolidated Revenue of Cataguazes-Leopoldina was R$777
Million in First half

The consolidated gross operating revenue of the Sistema
Cataguazes-Leopoldina in the first half of 2004 rose by 31% as
compared to the same period in 2003, amounting to R$777 million.

Consolidated physical energy sales amounted to 3,270GWh, rising
by 5.0% as compared to the same period last year. However,
considering only the retail market, sales fell by 2.7% (4.7% in
the operating area of holding company CFLCL) during the same
period.

This reduction in energy sales was mainly caused by the loss of
three free consumers in the concession area of the Sistema
Cataguazes-Leopoldina, one of which was lost by CFLCL and two by
subsidiary Energipe, which reflected a 11% fall in consolidated
physical sales to the industrial sector. However, the
distributors billed these consumers for charges for using the
distribution system, which substantially cushioned the financial
impacts resulting from this reduction.

CONTACT: Sistema Cataguazes-Leopoldina

         Cataguases:
         Phone: +55 32 3429-6000
         Fax: +55 32 3429-6480 / 3429-6317

         Rio de Janeiro:
         Phone: +55 21 2122-6900
         Fax: +55 21 2122-6931

         E-Mail: stockinfo@cataguazes.com.br
         Web Site: www.cataguazes.com.br


GERDAU: To Issue $100M of Debt
------------------------------
Mr. Osvaldo Schirmer, the financial and investor relations
director of Gerdau, confirmed plans by the Brazilian long
steelmaking group to issue US$100 million in debt, relates
Business News Americas

The one-year debt issue, which is part of the Company's ongoing
euro commercial debt program, will probably be lead-managed by
Spanish bank Santander, Schirmer said.

Gerdau ended the second quarter of the year with an BRL873-
million net profit (US$286mn), more than three times the BRL262
million recorded in the comparable period last year.


MRS LOGISTICA: Posts BRL146.7M EBITDA in 2Q04
---------------------------------------------
MRS Logistica S.A. (MRS) transported 24.3 million tons in 2Q04,
11% above volumes achieved in 1Q04 and 13% higher when compared
with the same period of previous year. The Company established a
new monthly transportation record, with 8.38 million tons
shipped in May, representing a 100 million-ton/year production
rate. This significant increase in volumes in the quarter was
consequence of greater shipments of iron ore (MBR, CVRD and
Cosipa), coal and coke (CSN), containers and agricultural
products (soybean, soybean bran and sugar).

Total volume transported in 1st half of 2004 (1H04) reached 46.1
million tons, 14.2% above the same period of 2003. Heavy haul
and general cargo volumes increased 15% and 11%, respectively,
compared with the same period of 2003.

Gross revenues in 2Q04 reached R$378.7 million, 13.1% and 13.8%
higher when compared with 1Q04 and 2Q03, respectively. Gross
revenues in 1H04 reached R$ 713.5 million, a 13.7% growth when
compared with the same period of last year.

Heavy haul and general cargo revenues increased 11% and 19% in
2Q04, respectively, compared with 2Q03. Costs of materials and
services in 1H04 were 55% and 18% higher, respectively, when
compared to the same period of 2003, due to the expansion of a
preventive maintenance plan for locomotives and wagons in 2004.

EBITDA reported in 2Q04 amounted to R$ 146.7 million, 22% and 6%
greater than registered in 1Q04 and 2Q03, respectively. In 1H04,
EBITDA totaled R$ 266.5 million, 9% higher than in the same
period of 2003, with a 43% margin.

Operating and Net Income:

Operating income, before financial effects, reached R$235
million in 1H04, up 7% from 1H03. Net income in 1H04 reached R$
81 million, against R$ 110 million registered in 1H03. This
decline was caused by higher net financial expenses, including
exchange and monetary variations, totaling R$110 million in
1H04, against R$68 million in 1H03.

As a result of the sustained profitability reported by the
Company in the last 12 months, shareholders' equity amounted to
R$ 361.7 million in 1H04, a R$322.8 million increase over 1H03.

Net Debt:

Consolidated net debt at the end of 1H04 was reduced to R$ 554.5
million, 32% lower than recorded in 1H03, as a result of the
increasing cash generation throughout the period. The net
debt/EBITDA (last 12 months) ratio in 1H04 was 0.96, down from
1.43x at the end of 1H03, a strong improvement in the Company's
capacity to meet its financial obligations.

Capital Expenditures:

During the first half of 2004, 250 new GDT wagons were
incorporated to MRS' fleet, part of a 630 wagons acquisition
from Amsted-Maxion, in order to meet the increasing demand for
iron ore in 2H04.

In June, MRS concluded negotiations with Helm Financial
Corporation to acquire 26 GE-C36 new locomotives in order to
improve its transportation capacity. The new locomotives should
be operative at the beginning end of 4Q04, providing the
necessary capacity to support the Company's objjective of
achieving 98 million tons shipped in 2004.

Commercial/Operational Highlights:

Beginning of zinc concentrate shipping for Votorantim Metais,
from the Sepetiba Port to Votorantim's plant in Juiz de Fora. In
order to accomplish this transportation, MRS and Votorantim
invested R$10.5 million in the projject. MRS reactivated 6.5 Km
of the Juiz de Fora-Paraibuna railway segment and reformed 30
HFS hopper wagons, while Votorantim refurbished the unloading
terminal at the plant and constructed a loading unit at TECAR
(coal loading terminal at the Sepetiba Port), using a convey-
belt system. This new route started in April, with initial
shipments of 15,000 tons/month.

Development of a logistic projject combining 3 railroads and
trucks to ship steel products from Companhia Siderurgica de
Tubarao (CST), in Vitoria (ES), to CSN Parana, in Araucaria
(PR). The cargo is dispatched from Vitoria (ES), trough CVRD's
railway to Lafaiete Bandeira (Ouro Preto-MG), where it is
transferred to MRS' trains, continuing the route up to Agua
Branca terminal (SP). The cargo is then moved by trucks to
Tatuii terminal (SP), where is finally carried trough AL rail
cars until CSN's plant in Araucaria. This new itinerary started
in May, with 10,000 tons being transported. Formerly, the
products were shipped by cabotage.

Start of transportation of 4,500 tons of steel products in June,
from the Gerdau Acominas plant, in Ouro Branco (MG) to MRS'
Arara terminal, at the Rio de Janeiro Port. Expected volumes for
2H04 are 7,000 tons/month.

Initial shipments of fertilizer inputs for Bunge, from Sepetiba
Port to Itutinga (MG), where the cargo is transferred to trucks
and moved to the customer's plant in Araxa (MG). Monthly volumes
are estimated at 10,000 tons/month.

Increase of MKBF (average distance between failures) statistics
from 13,000 Km/month in 1H03 to 18,550 Km/month in 1H04, due to
the intensification in preventive maintenance of locomotives.

To view financial statements, please visit:
htp:/bankrupt.com/misc/MRSLogistica_2Q04.pdf

CONTACTS: MRS Logistica S.A.
          Praia de Botafogo, 228/1201-E
          22250-906 - Rio de Janeiro - RJ

          Mr. Eduardo Cassineli
          Treasurer

          Mr. Marco Andre Guimaraes
          Financial Manager

          Ms. Maria Lucia Silveira
          Financial Analyst


          E-Mail: daf@mrs.com.br
          Tel: 55-21-2559-4600
          Fax: 55-21-2552-2635

          Web Site: www.mrs.com.br


PARMALAT BRAZIL: Seeks Independence From Italian Parent
-------------------------------------------------------
The Brazilian division of the dairy product manufacturer
Parmalat is now working to become independent of the Italian
headquarters.

According to an O Estado de Sao Paulo report, the restructuring
plan, which is already delivered to the Company's creditor
banks, involves the conversion of the BRL1-billion debt into
stocks and debentures.

Mr. Nelson Bastos, Parmalat's head of operations in Brazil,
revealed that the unit turned over BRL60 million in July, a 130%
higher than the turnover in April.

CONTACT:  PARMALAT PARTECIP. DO BRASIL LTDA
          Rua Gomes de Carvalho
          1629 - CEP 04547-005
          Sao Paulo, SP.
          Web site: http://www.parmalat.com.br



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

ENDESA CHILE: 1H04 Income Results Do Not Affect Rating
------------------------------------------------------
Empresa Nacional de Electricidad S.A.'s (Endesa Chile; BBB-
/Stable/--) US$51.8 million net income for the first half of
2004, which was 31.6% lower than it was in the same period of
2003, does not affect Standard & Poor's Ratings Services' rating
or outlook on the company. The Chile-based power generator
showed weaker operating performance in Chile resulting from
lower hydroelectric generation following the sale of its 172-MW
hydro plant Canutillar in March 2003, lower hydrology in the
Central Interconnected System (SIC) in the first quarter of
2004, and relatively more expensive thermal generation. The
situation in Chile was offset by better performance in the other
countries Endesa Chile serves, resulting in operating income
that was 4.8% higher in the first half of 2004 than in the first
half of 2003. The better operating profitability, however, was
not enough to compensate for a higher tax burden in Argentina.
Assuming normal hydrology, Standard & Poor's expects Endesa
Chile's results and cash generation to significantly improve in
the second half of 2004 due to the projected start up of its
570-MW, hydro plant Ralco in August 2004 and the relatively high
projected node prices in the next years.

ANALYST:  Sergio Fuentes, Buenos Aires (54) 114-891-2131


ENERSIS: Income Results for 1H04 Do Not Affect Rating
-----------------------------------------------------
Chile-based Enersis S.A.'s (Enersis; BBB-/Stable/--) US$21.6
million net income for the first half of fiscal 2004, which is
65.7% lower than it was in the same period of 2003, does not
affect Standard & Poor's Ratings Services rating or outlook on
the company. The lower income results occurred in spite of
better operating income, lower interest expenses, and better
non-operating results. Higher operating performance and lower
interests were not enough to offset the positive effects of the
one-time changes in deferred tax accounting rules in Argentina
and accelerated amortization of negative goodwill related to
Brazilian subsidiary CERJ in 2003, neither of which were
repeated in 2004. The negative charges, however, do not
represent cash outflows so they do not hurt the company's
adequate debt repayment capacity.

ANALYSTS:  Sergio Fuentes, Buenos Aires (54) 114-891-2131
           Marta Castelli, Buenos Aires (54) 114-891-2128



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

BCI: Enters Into Agreement to Monetize Portion of Tax Losses
------------------------------------------------------------
Bell Canada International (the "Corporation" or "BCI")(TSX:BI)
announced Wednesday it has entered into an agreement to monetize
a portion of its non-capital tax losses (the "Loss Monetization
Plan") which is expected to result in a compensatory cash
payment to BCI of at least $42 million. The Loss Monetization
Plan, which is the subject of an advance income tax ruling
received from the Canada Revenue Agency ("CRA"), is conditional
on the approval of the Ontario Superior Court of Justice (the
"Court") pursuant to BCI's Plan of Arrangement. If all required
approvals are obtained, BCI expects to receive the proceeds of
the Loss Monetization Plan in the first quarter of 2007,
although at BCI's request and subject to the consent of BCE, the
proceeds may be received in 2006 at a reduced amount based on a
discount rate to be mutually agreed at that time.

At December 31, 2003, the Corporation reported non-capital tax
loss carry forwards of approximately $415 million. Subsequently,
the 2003 tax return was filed and the amount of the non-capital
loss carry forwards increased to approximately $436 million. In
connection with the Loss Monetization Plan, BCI has requested
CRA to audit BCI's tax returns for years up to December 31, 2003
for the purpose of making a final determination of BCI's losses.
While the Corporation's tax returns were filed using tax
positions that were believed at the time to be appropriate,
based on recent discussions with CRA and the Federal Department
of Finance, the Corporation believes that the maximum amount
available for use under the Loss Monetization Plan will be less
than the amounts filed. It is not expected that the CRA audit
will have been completed by the time the Loss Monetization Plan
is anticipated implemented in January of 2005. As a result, the
Loss Monetization Plan will be initially based on the
monetization of $200 million of losses (and a $42 million
compensatory payment in 2007) and the amount of losses to be
monetized may be increased during 2005 if the CRA audit
determines that additional losses are available.

Further, if confirmation is obtained that BCI's losses can be
used to reduce taxable income in jurisdictions in Canada other
than those where BCI carries on business, the $42 million
compensatory payment (assuming $200 million of losses) may
increase to as much as $58 million. At this time there can be no
assurance of the actual amount of losses that will result from
the CRA audit, or that the compensatory amount will be greater
or less than $42 million.

As the Loss Monetization Plan is to be implemented between BCI
and related parties, an Independent Committee of the Board of
Directors of BCI was appointed to consider the transaction. The
Independent Committee recommended that the Board approve the
Loss Monetization Plan based in part on an opinion received from
its financial advisors that the transaction is fair, from a
financial point of view, to BCI and BCI's shareholders other
than BCE. After receiving the recommendation of the Independent
Committee, the BCI Board approved the Loss Monetization Plan. In
addition, because the Loss Monetization Plan is to be entered
into with BCI's majority shareholder BCE Inc., and Bell Canada
(or their affiliates), the transaction will require the approval
of a majority of BCI's shareholders other than BCE unless an
exemption from such requirement is granted to BCI by securities
regulators.

Second Quarter Results

As a result of the adoption on July 17, 2002 of BCI's Plan of
Arrangement, BCI's unaudited consolidated financial statements
for the second quarter of 2004 reflect only the activities of
BCI as a holding company. BCI's 75.6% interest in Canbras
Communications Corp. ("Canbras") is recorded under Investments
on the balance sheet at $15 million, being the lower of its
carrying value and estimated net realizable value.

As at June 30, 2004, BCI's shareholders' equity was $217.0
million, down by $4.8 million from March 31, 2004. This decrease
was mainly as a result of interest expense of $4.6 million on
the BCI 11% senior unsecured notes and administrative expenses
of $2.1 million, partially offset by interest income of $2.0
million.

BCI's cash and temporary investments as at June 30, 2004 were
$381.1 million representing approximately 96% of the company's
total assets. The yield on the average investment portfolio in
the quarter was approximately 2.1%.

Total liabilities of $181.0 million include BCI's 11% senior
unsecured notes due September 29, 2004 in the amount of $160
million. Accrued liabilities were $21.0 million at the end of
the second quarter of 2004, up $4.9 million from March 31, 2004
mainly as a result of the accrual of interest on BCI's 11%
notes.

The loss for the second quarter was $4.8 million, or $0.12 per
share.

Estimated Future Net Assets

BCI previously believed that an initial distribution to
shareholders could be made as early as the second half of 2004.
However, due to delays in resolving claims against it, the
Corporation now believes that no such initial distribution will
be made until at least the first half of 2005. Furthermore, in
view of BCI's Loss Monetization Plan, which is intended to
increase the net asset value of BCI, BCI's Plan of Arrangement
is unlikely to be completed, and final distributions made to
shareholders, until at least the first quarter of 2006 (or in
2007, if no early compensatory payment to BCI is made with
respect to the Loss Monetization Plan).

Estimated future net assets of BCI at March 31, 2006 are $253.4
million. The differences between shareholders' equity on the
consolidated balance sheet at June 30, 2004 and the estimated
future net assets at March 31, 2006 are: (i) the deduction of
future net costs from July 1, 2004 to March 31, 2006; (ii) the
inclusion of the expected discounted benefit from the Loss
Monetization Plan; (iii) the inclusion of the expected gain on
the Canbras investment; and (iv) the inclusion of the gain on
the sale of BCI's remaining 1.5% interest in Axtel S.A. de C.V.
("Axtel").

The future net costs are estimated at approximately $10.3
million comprising interest expense until September 29, 2004 on
the 11% senior unsecured notes of approximately $4.5 million
(assuming Court approval is obtained to pay the 11% senior
unsecured notes on September 29, 2004), administrative expenses
of approximately $14.4 million and interest income of
approximately $8.6 million. The expected discounted benefit from
an early payment being made under the Loss Monetization Plan is
estimated to be approximately $38 million, being the $42 million
payment discussed above, discounted for one year at an assumed
discount rate of 9%. The expected gain on the Canbras investment
of approximately $6 million represents the excess over current
carrying value that BCI expects to receive on its investment in
Canbras. The gain on the sale, on July 14, 2004, of the
remaining 1.5% interest in Axtel was $2.6 million (US$2
million).

The future net costs exclude any amounts that may be required to
settle contingent liabilities such as lawsuits. To the extent
BCI has not completed its Plan of Arrangement by March 31, 2006,
interest income thereafter may not be sufficient to cover
operating expenses estimated at approximately $1.5 million to $2
million per quarter. The extent of any shortfall would be
dependent on a number of factors, including the level of
interest rates and BCI's cash balances at the time.

The currently estimated future net assets of BCI at March 31,
2006 of $253.4 million have increased by $36.3 million from the
estimate of future net assets at December 31, 2004 prepared at
May 6, 2004 in connection with BCI's first quarter results. The
increase in estimated net assets of BCI at March 31, 2006 is a
result of the inclusion of the expected discounted benefit of
approximately $38 million to be realized from the Loss
Monetization Plan and the gain on the sale of the remaining 1.5%
interest in Axtel of $2.6 million offset by additional net costs
of $4.3 million from January 1, 2005 to March 31, 2006. These
additional net costs are expected to be incurred by the
Corporation as a result of the delay in the timing of the
expected final distribution to shareholders and the approval
process associated with the Loss Monetization Plan (including
the potential requirement to hold a special shareholders'
meeting to approve the Loss Monetization Plan).

Update on Remaining Investments

On July 14, 2004, BCI sold its remaining 1.5% equity interest in
Axtel in a series of transactions with certain of Axtel's other
current shareholders. BCI, which had previously written-off
entirely its remaining interest in Axtel, received cash
consideration in an aggregate amount of $2.6 million (US$2
million) for the sale.

Pursuant to the sale of all of Canbras' operations to a third
party in December 2003, Canbras received gross proceeds of $32.6
million, comprised of $22.2 million in cash and a one-year
promissory note bearing interest at 10% in the original
principal amount of $10.4 million (subject to reduction in the
event indemnification obligations of Canbras arise under the
terms of the sale transaction). On July 29, 2004, Canbras
announced that it had declared an initial distribution, in the
amount of $0.21 per share, of net proceeds from the sale
transaction, payable to shareholders on August 23, 2004. As a
result, BCI will receive approximately $8.7 million on such
date. BCI expects to receive a total of $21 million from the
total net proceeds to be distributed by Canbras to its
shareholders, assuming the full amount of the one-year note is
paid to Canbras. Canbras expects to make final distributions to
shareholders in one or more instalments by year-end 2005.

Plan of Arrangement Update

On July 23, 2004, the Ontario Court of Appeal dismissed the two
proposed class action lawsuits brought by Mr. Wilfred Shaw and
Mr. Cameron Gillespie on behalf of BCI common shareholders and
seeking $1 billion in damages against BCI and BCE. The Court of
Appeal upheld the decision of the lower court dismissing the
lawsuits as failing to disclose a reasonable cause of action.
Any further appeals, which would go to the Supreme Court of
Canada, requires the permission of the Supreme Court. Plaintiffs
have until September 30, 2004 to seek leave to appeal.

BCI is operating under a court supervised Plan of Arrangement,
pursuant to which BCI intends to monetize its assets in an
orderly fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing
the net proceeds to its shareholders and dissolving the company.
BCI is listed on the Toronto Stock Exchange under the symbol BI.

To see financial statements: http://bankrupt.com/misc/BCI.htm

Notes to the Consolidated Financial Statements (unaudited)

1. Description of business and basis of presentation

The unaudited consolidated financial statements should be read
in conjunction with the audited consolidated financial
statements for the year ended December 31, 2003 as set out in
Bell Canada International Inc.'s ("BCI" or the "Corporation")
2003 Annual Report, prepared in accordance with generally
accepted accounting principles in Canada ("GAAP").

Capitalized terms used herein, and not otherwise defined, have
the meanings defined in the 2003 Annual Report.

Bell Canada International Inc. is operating under a Plan of
Arrangement (the "Plan of Arrangement") approved by the Ontario
Superior Court of Justice (the "Court"), pursuant to which BCI
intends to monetize its assets in an orderly fashion and resolve
outstanding claims against it in an expeditious manner with the
ultimate objective of distributing the net proceeds to its
shareholders and dissolving the Corporation. Accordingly, these
financial statements have been prepared on a basis which in the
opinion of management provides useful and relevant information
to users of BCI's financial statements. The consolidated balance
sheet at June 30, 2004 reflects BCI's 75.6% interest in Canbras
Communications Corp. ("Canbras") as an investment recorded at
the lower of carrying value and net realizable value. BCI's
49.9% interest in Genesis Telecom S.A. ("Genesis") has been
previously written off. BCI's remaining 1.5% interest in Axtel
S.A. de C.V. ("Axtel") was written off in the second quarter of
2003 in connection with the restructuring of Axtel's debt (see
Note 11). Since July 1, 2002, the consolidated statements of
earnings and cash flows have reflected only the activities of
BCI as a holding company.

2. Significant accounting policies

In the opinion of the management of BCI, the unaudited interim
consolidated financial statements have been prepared on a basis
consistent with the annual audited consolidated financial
statements except as noted below under Stock-Based Compensation.
The unaudited interim consolidated financial statements contain
all adjustments necessary for a fair presentation of the
financial position as at June 30, 2004 and the results of
operations and cash flows for the three and six months ended
June 30, 2004 and 2003, respectively.

The following is a summary of the Corporation's accounting
policies for Cash and Cash Equivalents and Temporary
Investments.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents represent cash and highly-liquid
short-term debt investments with an initial maturity of three
months or less at the date of acquisition.

TEMPORARY INVESTMENTS

Temporary investments consist of debt investments with an
initial maturity greater than three months but less than twelve
months at the date of acquisition which the Corporation intends
to hold to maturity. The temporary investments are carried at
cost with discounts or premiums arising on purchase amortized to
maturity.

USE OF ESTIMATES

The preparation of financial statements in conformity with
Canadian GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets,
liabilities and expenses and the disclosure of contingent assets
and liabilities. Actual results could differ from those
estimates.

STOCK-BASED COMPENSATION

Effective January 1, 2004, the Corporation adopted the amended
Section 3870, "Stock-Based Compensation and other Stock-Based
Payments" of the Canadian Institute of Chartered Accountants.
The amended standards require the Corporation to use the fair
value-based method for all stock-based awards and the
recognition of an expense in the financial statements.

The adoption of this amended Section, applied retroactively as
required, did not have an impact on these financial statements
since no stock-based awards have been made since January 1,
2002.

For a complete description of the Corporation's significant
accounting policies, refer to BCI's financial statements for the
year ended December 31, 2003.

3. Temporary Investments

As at June 30, 2004, the Corporation held investment grade
commercial paper in the amount of $83,473,000. The commercial
paper matures at varying dates to January 14, 2005. The
effective yields on the commercial paper range from 2.0 % to
2.14 %. At June 30, 2004 the estimated fair value of the
commercial paper amounted to $83,809,000.

4. Notes Receivable

On March 3, 2003, BCI received the payment of the remaining
balance of US$170 million due from America Movil. Upon the
exercise of a foreign currency option on March 4, 2003, the
Corporation converted the payment from America Movil into net
proceeds of approximately $264,010,000. These proceeds
represented the final payment on the sale of BCI's interest in
Telecom Americas on July 24, 2002.

5. Investments

Investments consist of the Corporation's 75.6% economic interest
in Canbras recorded at the lower of carrying value and net
realizable value.

On October 8, 2003, Canbras announced that it had entered into
definitive agreements to sell all of its operations which sale
was completed on December 24, 2003. Canbras received gross
proceeds of $32,600,000, comprised of $22,168,000 in cash and a
one-year promissory note bearing interest at 10% in the original
principal amount of $10,432,000 (subject to reduction in the
event indemnification obligations of Canbras arise under the
terms of the sale transaction). Based on Canbras' announced
estimate of the net amount (after payment of transaction
expenses and winding-up costs) that it expects to distribute to
its shareholders of approximately $28,000,000 ($0.51 per share),
which assumes full payment of the one-year note and no
unforeseen claims against it, BCI expects to receive
approximately $21,000,000 as its pro rata share of such net
proceeds.

6. Stated capital

A) COMMON SHARES, AS AT JUNE 30, 2004 ARE AS FOLLOWS:

On July 12, 2002, the Shareholders and Noteholders of BCI
approved the Plan of Arrangement which resulted in, among other
things, a share consolidation of 1 share for every approximately
120 held, such that immediately following the consolidation, BCI
had 40,000,000 shares outstanding. The number and exercise price
of all stock options issued under its stock option plans for
senior executives and key employees have also been adjusted to
reflect the consolidation. In addition, all share and per share
amounts have been adjusted to reflect the share consolidation
for all periods presented.

                                      Number of        Stated
                                        Shares       capital
   ------------------------------------------------------------
Balance, December 31, 2003           40,000,000       $10,000
   -----------------------------------------------------------
Balance, June 30, 2004               40,000,000       $10,000
   ------------------------------------------------------------
   ------------------------------------------------------------

B) STOCK OPTIONS

At June 30, 2004, 6,205 stock options were outstanding of which
6,096 were exercisable. The stock options are exercisable on a
one-for-one basis for common shares of the Corporation. The
total stock options outstanding have exercise prices ranging
from $2,373 to $5,037 per share over a remaining contract life
of between 1.4 to 5.9 years.

C) LOSS PER SHARE

                  Three months ended     Six months ended
                          June 30,             June 30,
   -----------------------------------------------------------
                    2004         2003         2004        2003
   -----------------------------------------------------------
   Numerator:
   Net loss
     applicable to
     common shares -
     basic and
     diluted $    (4,808)    $(35,409)     $(8,641)   $(50,782)
   -----------------------------------------------------------
   -----------------------------------------------------------
    Denominator:
    Weighted-average
      number of shares
      - basic and
      diluted     40,000       40,000       40,000      40,000
   ------------------------------------------------------------
    Basic and
      diluted loss
      per share  $(0.12)      $(0.89)      $(0.22)     $(1.27)
   ------------------------------------------------------------
   ------------------------------------------------------------

The Corporation excluded potential common share equivalents from
the computation of diluted loss per share computed above, as
they were anti-dilutive

7. Income taxes

At December 31, 2003, the Corporation reported Canadian non-
capital tax losses carried forward amounting to approximately
$414,680,000, expiring at various dates to the year 2010. In
addition, the Corporation had Canadian capital losses amounting
to approximately $72,961,000 that can be carried forward
indefinitely. Subsequently, the 2003 tax return was filed and
the amount of the non-capital loss carry forwards increased to
approximately $436,000,000 and the capital losses decreased to
approximately $72,000,000. The expected future statutory tax
rate for non-capital losses is 31.02% and for the capital losses
is effectively 19.185%. The benefit of these losses has not been
reflected in these financial statements.

On August 4, 2004, the Corporation announced that it had entered
into an agreement to monetize a portion of its non-capital tax
losses (the "Loss Monetization Plan") which is expected to
result in a compensatory cash payment to BCI of at least
$42,000,000. The Loss Monetization Plan, which is the subject of
an advance income tax ruling received from the Canada Revenue
Agency ("CRA"), is conditional on the approval of the Court
pursuant to BCI's Plan of Arrangement. If all required approvals
are obtained, BCI expects to receive the proceeds of the Loss
Monetization Plan in the first quarter of 2007, although at
BCI's request and subject to the consent of BCE, the proceeds
may be received in 2006 at a reduced amount based on a discount
rate to be mutually agreed at that time.

In connection with the Loss Monetization Plan, BCI has requested
CRA to audit BCI's tax returns for years up to December 31, 2003
for the purpose of making a final determination of BCI's losses.
While the Corporation's tax returns were filed using tax
positions that were believed at the time to be appropriate,
based on recent discussions with CRA and the Federal Department
of Finance, the Corporation believes that the maximum amount
available for use under the Loss Monetization Plan will be less
than the amounts filed. It is not expected that the CRA audit
will have been completed by the time the Loss Monetization Plan
is anticipated to be implemented in January of 2005. As a
result, the Loss Monetization Plan will be initially based on
the monetization of $200,000,000 of losses (and a $42,000,000
compensatory payment in 2007) and the amount of losses to be
monetized may be increased during 2005 if the CRA audit
determines that additional losses are available.

Further, if confirmation is obtained that BCI's losses can be
used to reduce taxable income in jurisdictions in Canada other
than those where BCI carries on business, the $42,000,000
compensatory payment (assuming $200,000,000 of losses) may
increase to as much as $58,000,000. At this time there can be no
assurance of the actual amount of losses that will result from
the CRA audit, or that the compensatory amount will be greater
or less than $42,000,000.

As the Loss Monetization Plan is to be implemented between BCI
and related parties, an Independent Committee of the Board of
Directors of BCI was appointed to consider the transaction. The
Independent Committee recommended that the Board of Directors
approve the Loss Monetization Plan based in part on an opinion
received from its financial advisors that the transaction is
fair, from a financial point of view, to BCI and BCI's
shareholders other than BCE. After receiving the recommendation
of the Independent Committee, the BCI Board approved the Loss
Monetization Plan. In addition, because the Loss Monetization
Plan is to be entered into with BCI's majority shareholder BCE
Inc., and Bell Canada (or their affiliates), the transaction
will require the approval of a majority of BCI's shareholders
other than BCE unless exemption from such requirement is granted
to BCI by securities regulators.

If Court approval is obtained, the Corporation will record a
future income tax asset in its financial statements after the
appeal period expires (30 days after the initial Court order) or
after any appeals are dismissed, as at that time it is more
likely than not that a future income tax asset will be realized.

8. Contingencies

The Corporation has not accrued any amounts with respect to the
following contingencies:

a) On April 29, 2002, BCI announced that a lawsuit had been
filed with the Court by certain former holders of BCI's $250
million 6.75% convertible unsecured subordinated debentures (the
"6.75% Debenture Class Action").  The plaintiffs seek damages
from BCI, BCE and certain current and former members of BCI's
Board of Directors, for up to an amount of $250 million in
connection with the settlement of the debentures through the
issuance of common shares, in accordance with BCI's
recapitalization plan (the "Recapitalization Plan") completed on
February 15, 2002. In accordance with an agreement reached among
the parties to this lawsuit in December 2002, the Court has
ordered that this lawsuit be certified as a class action within
the meaning of applicable legislation.  The certification order
does not constitute a decision on the merits of the class
action, and BCI continues to be of the view that the allegations

contained in the lawsuit are without merit and intends to
vigorously defend its position.

As part of the agreement among the parties, the plaintiffs in
the class action have abandoned their claim for punitive damages
(the statement of claim originating the lawsuit sought $30
million in punitive damages).  The plaintiffs have also agreed
to the dismissal of the class action against BMO Nesbitt Burns
Inc., one of the original defendants in the proceeding.

All of the defendants filed statements of defense in the third
quarter of 2003. A trial of this matter is expected to take
place in the first quarter of 2005.

b) In August 2003, La Caisse de depot et placement du Quebec
(CDP) filed a proof of claim with the Monitor and a Notice of
Action in the Court in connection with CDP's former holdings of
a portion of BCI's 6.5% convertible unsecured subordinated
debentures (the "CDP Action"). CDP is seeking up to $110 million
in damages, together with interest and costs, against BCI, BCE
and certain current and former members of BCI's board of
directors. CDP's claim contains allegations that are
substantially similar to those contained in the 6.75% Debenture
Class Action.

On September 9, 2003, BCI, BCE and the other defendants in the
CDP Action entered into an agreement (modified November 28,
2003) with CDP with respect to the procedure to be followed in
connection with the CDP action. Pursuant to the agreement, the
defendants agreed with CDP, that (subject to the approval of the
Court) the prosecution of the CDP Action should be stayed
pending a final adjudication or settlement of the 6.75%
Debenture Class Action, and the resolution of the 6.75%
Debenture Class Action shall form the basis for the final
resolution of the CDP Action. CDP has also agreed not to advance
any claims as a holder of 6.75% debentures outside of the 6.75%
Debenture Class Action, nor any claims as a common shareholder
of BCI outside of any certified common shareholder class action
of which it may be found to be a member.

By order dated December 19, 2003, this agreement was approved by
the Court and the action was stayed until final disposition of
the 6.75% Debenture Class Action.

BCI is of the view that the allegations are without merit and
intends to take all appropriate actions in order to vigorously
defend its position.

c) On July 23, 2004, the Ontario Court of Appeal dismissed the
two proposed class action lawsuits brought by Mr. Wilfred Shaw
and Mr. Cameron Gillespie on behalf of BCI common shareholders
and seeking $1 billion in damages against BCI and BCE.  The
Court of Appeal upheld the decision of the lower court
dismissing the lawsuits as failing to disclose a reasonable
cause of action.

The Shaw action was originally filed on September 27, 2002, and
sought court approval to proceed by way of class action on
behalf of all persons who owned BCI common shares on December 3,
2001 in connection with the issuance of BCI common shares on
February 15, 2002 pursuant to BCI's Recapitalization Plan and
the implementation of BCI's Plan of Arrangement approved by the
Court on July 17, 2002.  After Mr. Shaw's original action was
dismissed on May 9, 2003, Mr. Shaw filed an amended statement of
claim on June 27, 2003.  On August 30, 2003, Mr. Gillespie filed
a lawsuit that was, except with respect to the name of the
plaintiff, substantially identical to Shaw's amended statement
of claim.  These two actions were dismissed on January 5, 2004
without leave to amend their claims.  Mr. Shaw and Mr. Gillespie
appealed this decision to the Ontario Court of Appeal, which on
July 23, 2004 dismissed the appeal, upholding the lower court's
decision. Any further appeal by the plaintiffs to the Supreme
Court of Canada would require the permission of the Supreme
Court.

d) Comcel is currently involved in litigation before the
Superintendent of Industry and Commerce (SIC) in Colombia
whereby plaintiffs are claiming damages of approximately US$70
million relating to the provision by Comcel of long-distance
services through voice-over internet protocol ("VOIP") between
December 1998 and September 1999.  During the fourth quarter of
2003, Comcel's attempt to have the SIC's initial finding that it
improperly provided services appealed to a judicial tribunal was
dismissed and the action has returned to a damages determination
phase before the SIC. Comcel's Colombian counsel believes that
the damage allegations will be subject to defenses on the merits
and that substantially all of the claims lack a sufficient
evidentiary basis.

BCI had agreed to indemnify Comcel and its affiliates for the
initial US$5 million of damages and for any damages Comcel may
suffer in excess of US$7.5 million. Comcel is responsible for
any damages incurred in excess of US$5 million and up to US$7.5
million. However, in connection with BCI's recently completed
claims identification process (established as part of BCI's Plan
of Arrangement), Comcel did not file a claim with BCI's court-
appointed Monitor with respect to the Comcel VOIP indemnity. As
a result, pursuant to the order of the Court approving the
claims identification process, Comcel is now barred from
asserting any claim against BCI in connection with this lawsuit.
However, BCI understands that Comcel may dispute that its claim
is so barred.

9. Supplementary cash flow information

                   Three months ended     Six months ended
                         June 30,             June 30,
   ----------------------------------------------------------
                   2004         2003         2004        2003
   ---------------------------------------------------------

Interest paid      $-           $-       $8,800      $8,800
   ----------------------------------------------------------

10. Comparative figures

Certain comparative figures have been reclassified in order to
conform with the presentation adopted in 2004.

11. Subsequent event

On July 14, 2004, the Corporation sold its remaining 1.5% equity
interest in Axtel in a series of transactions with certain of
Axtel's other current shareholders. The Corporation, which had
previously written-off entirely its remaining interest in Axtel,
received cash consideration in an aggregate amount of $2.6
million (US $2 million) for the sale.



=============
J A M A I C A
=============

C&WJ: Demands Apology From OUR
------------------------------
Cable & Wireless Jamaica Limited (C&WJ) told the Business
Observer that it is demanding an apology from the Office of
Utilities Regulation (OUR) for accusing the Company of engaging
in anti-competitive practices, the Business Observer relates.

In a previous report entitled "War heats up for overseas call
business," the Business Observer quoted the OUR as saying: "C&W
has engaged in anti-competitive practices." The OUR went on to
accuse the telecoms firm of charging higher rates to VOIP
players than to other customers for the same services, and of
blocking VOIP calls.

Mr. Errol Miller, head of corporate communications at C&WJ, in a
letter to the Business Observer said: "C&WJ has written to the
Office of Utilities Regulation demanding a public apology from
its deputy director-general, Mr. Courtney Jackson whose
statements as they appear in the article are inaccurate and
exhibit scant disregard for procedural fairness."



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

DESC: Enters Agreement To Sell 51% Stake in Velcon
--------------------------------------------------
DESC, S.A. de C.V. (NYSE: DES; BMV: DESC) announced on Wednesday
that it has reached an agreement in principle by the signing of
a non-binding Memorandum of Understanding (MOU) with GKN
Industries for the sale of Desc's 51% shareholding in Velcon,
S.A., de C.V., the Mexican joint venture in the constant
velocity joint (CVJ) business.

This goes in line with Desc's strategy to restructure its
business portfolio. The total estimated value of the transaction
is in the range of US$ 80 to US$ 85 million, which Desc will use
to strengthen its financial structure, translating into better
financial ratios, reduced leverage and financing expenses, and
positioning itself to recover its profitability levels.

DESC, S.A. de C.V. is one of the largest industrial groups in
Mexico, with 2003 sales of approximately US$ 2 billion and
nearly 14,000 employees, which through its subsidiaries is a
leader in the Automobile Parts, Chemical, Food and Property
sectors.

CONTACTS: Ms. Marisol Vazquez Mellado
          Mr. Jorge Padilla Ezeta
          Tel: (5255) 5261-8044
          jorge.padilla@desc.com.mx
          Ms. Maria Barona
          Ms. Melanie Carpenter
          Tel: 212-406-3690
          desc@i-advize.com

          Web Site: www.desc.com.mx


PEMEX: Moody's Assigns MX-1 National Scale Short-term Rating
------------------------------------------------------------
Moody's assigned MX-1 national scale short-term rating to
Petroleos Mexicanos (PEMEX), Mexico's state-owned oil company.

The rating, which is the highest on Moody's short-term national
scale, affects PEMEX's ARS10 billion Program of Short-Term
Certificados Bursatiles. The outlook for the rating is stable.

Moody's said PEMEX's debt obligations and unfunded pension
liabilities are rising as it seeks to fund a large capital
expenditure program that is expected to reverse declining
reserves and grow its oil and gas production.

At the same time, the Company's after-tax cash flows will likely
remain constrained due to its high tax burden.

As a result, Moody's believes there could be a continued
deterioration in PEMEX's credit quality on a stand-alone basis,
without consideration of its status as a government-owned
entity.

Due to the underlying deterioration in PEMEX's operating and
financial fundamentals, the Company's credit quality will
increasingly depend upon the implicit support of the Mexican
government.

PEMEX saw its losses double in the second quarter of the year to
MXN18.87 billion (US$1.65 billion) from MXN9.01 billion in the
same period a year ago. Record production 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.



                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
Lucilo Junior M. Pinili, Editors.

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

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

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

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 240/629-3300.


* * * End of Transmission * * *