TCRLA_Public/040920.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

          Monday, September 20, 2004, Vol. 5, Issue 186



BERKELIA: Begins Liquidation Proceedings
CINCO LADOS: Enters Bankruptcy on Court Orders
DEPORTES NEXO: Plans to Liquidate Assets to Pay Debts
DISCO: Cencosud Enters New Deal To Keep Company A Bit Longer
GIT S.A.: Court Issues Liquidation Order

LA VAINILLA: Asks Court for Reorganization
MASTELLONE HERMANOS: Introduces New Debt Offer
MATYS S.R.L.: Court Orders Liquidation
SIDECO AMERICANA: Bonds Get `B(arg)' Rating From Fitch
S.H. LADRILLOS: Court Grants Reorganization Plea


FOSTER WHEELER: Secures Eastern Petrochemical Contract
LUNG KEE: Robin Mayor Appointed as Liquidator
MWD TECHNOLOGIES: Members Agree To Wind-Up


ACESITA: Plans to Group Shares to Bolster Stock Liquidity
CSN: S&P Affirms Ratings; Rates Notes 'B+'


* COLOMBIA: Exchanges 2005 Treasurys For 2007, 2009 Notes


PETROECUADOR: Takes U.S. Company to Court


GRUPO IUSACELL: Sees Debt Accord Before Yearend
GRUPO POSADAS: Moody's Rates Proposed $150M Notes Offering Ba3
GRUPO TMM: Regulator Denies Kansas City Bid for Stake


* PARAGUAY: IMF Concludes Article IV Consultation


UTE: Wants More Time to Study Offer for Turnkey Contract


PDVSA: NB Power Hopes to Gain High-sulfer Fuel Agreement

     -  -  -  -  -  -  -  -


BERKELIA: Begins Liquidation Proceedings
Berkelia S.A. of Buenos Aires will begin liquidating its assets
now that court no. 9 of the city's civil and commercial tribunal
declared the company bankrupt. Infobae reveals that the
bankruptcy process will commence under the supervision of court-
appointed trustee, accounting firm "Estudio Edgardo Brodersen y

The trustee will review claims forwarded by the company's
creditors "por via incidental". A general report on the case is
scheduled for court submission on November 10, 2004.

Clerk No. 17 assists the court on this case.

CONTACT: Berkelia S.A.
         Avda Corrientes 4027
         Buenos Aires

         Estudio Edgardo Brodersen y Asociados - Trustee
         25 de Mayo 611
         Buenos Aires

CINCO LADOS: Enters Bankruptcy on Court Orders
Court no. 16 of Buenos Aires' civil and commercial tribunal
declared local company Cinco Lados S.A. bankrupt after the
company defaulted on its debt payments. The order effectively
places the company's affairs as well as its assets under the
control of court-appointed trustee, Mr. Carlos Erasmo Moreno.

As trustee, Mr. Moreno is tasked with verifying the authenticity
of claims presented by the company's creditors. The verification
phase is ongoing until November 23, 2004.

Infobae reports that clerk no. 31 assists the court on this
case, which will end with the disposal of the company's assets
in favor of its creditors.

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

DEPORTES NEXO: Plans to Liquidate Assets to Pay Debts
Deportes Nexo S.A. will begin liquidating its assets following
the bankruptcy pronouncement issued by court no. 20 of Buenos
Aires' civil and commercial tribunal.

The ruling places the company under the supervision of court-
appointed trustee, Mr. Jorge Wilcke. The trustee will verify
creditors' proofs of claims until November 1, 2004. Next, the
validated claims will be presented in court as individual
reports on December 15, 2004.

Mr. Wilcke will also submit a general report, containing a
summary of the company's financial status as well as relevant
events pertaining to the bankruptcy, on March 1, 2005.

CONTACT: Mr. Jorge Wilcke, Trustee
         Paraguay 435
         Buenos Aires

DISCO: Cencosud Enters New Deal To Keep Company A Bit Longer
Chilean group Cencosud established an agreement with Dutch giant
Royal Ahold to keep Argentine supermarket chain Disco S.A. until
next year.

The deal came shortly after Argentine businessman Francisco de
Narvaez revealed his intention to present to Ahold a new offer,
bigger than Cencosud's, for the supermarket chain. In a
preliminary accord in March, Cencosud agreed to buy Disco for
US$315 million.

The recent agreement also came amidst strong resistance from the
Peirano Family, former partners of Ahold in Disco, who are doing
all they can in order to block Cencosud from buying the
supermarket chain.

          Larrea 847, Piso 1
          1117 Buenos Aires, Argentina
          Phone: +54-11-4964-8000
          Fax: +54-11-4964-8076
          Home Page:

GIT S.A.: Court Issues Liquidation Order
Jewelry manufacturer Git S.A. enters bankruptcy protection after
court no. 4 of Buenos Aires' civil and commercial tribunal
issued an order allowing the Company's liquidation.

Local information source Clarin reports that unpaid debts
totaling US$110,000 prompted the bankruptcy petition.

Clerk No. 8, assists the court on the case, which will culminate
in the liquidation of all of its assets.

         Libertad 359
         Buenos Aires

LA VAINILLA: Asks Court for Reorganization
La Vainilla de Oro S.A. requested reorganization, as it has
failed to pay its liabilities since August 31, 2003, says local
information source Clarin.

The reorganization petition, once court-approved, will allow the
company to negotiate a settlement with its creditors in order to
avoid a straight liquidation.

The case is pending before court no. 16 of Buenos Aires' civil
and commercial tribunal. Clerk no. 31 assists the court on this

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

MASTELLONE HERMANOS: Introduces New Debt Offer
Struggling to persuade creditors to agree to restructure some
US$330 million in defaulted notes, Argentine dairy company
Mastellone Hermanos (MLH.YY) launched a new and improved offer

According to Dow Jones Newswires, Mastellone sweetened the terms
on one of the new bonds, which was originally to come due in
2014 and carry an interest rate of 7%. The company brought the
maturity forward to 2012 and upped the interest rate to 8%.
Interest began accruing July 31, 2004, rather than on the
closing date of the offer, as initially planned.

Another option for creditors, says the report, was a floating-
rate bond due in 2011. The maturity remained unchanged for this
new paper, and the company said it would no longer pay out on
this bond early if it has the excess cash to do so. The third
alternative gives creditors a cash payment worth 60% of their
original holdings.

Mastellone Hermanos said its new offer will now be available to
both qualified institutional buyers and individual investors in
the U.S., as well as foreign creditors. Before, the deal wasn't
offered to non-qualified institutional buyers in the U.S.

The new deadline is Oct. 14. The dairy company said it has
already secured agreement from creditors holding US$290.4
million, or 88.3%, for the new offer. As of Wednesday, the
company had US$131.7 million on board.

Creditors that had accepted the deal before won't have to start
the process over again. Rather, their original choices will
simply be counted as agreement for the modified alternatives.

Mastellone said it won't pursue its out-of-court debt
restructuring agreement, known as an APE, if acceptance reaches
98%, relates Dow Jones.

Under APE rules, two-thirds approval from creditors allows a
company to submit its offer for legal clearance, which then
makes the repayment terms binding on all creditors.

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

MATYS S.R.L.: Court Orders Liquidation
Matys S.R.L. prepares to wind-up its operations following the
bankruptcy pronouncement issued by court no. 2 of Buenos Aires'
civil and commercial tribunal. The declaration effectively
prohibits the company from administering its assets, control of
which will be transferred to a court-appointed trustee.

Infobae reports that the court appointed Mr. Mario Norberto
Aragon as trustee. He will be reviewing creditors' proofs of
claims until November 2, 2004. The verified claims will be the
basis for the individual reports to be presented for court
approval on December 27, 2004. The trustee will also submit a
general report March 14 next year.

Clerk no. 4 assists the court on this case, which will end with
the disposal of the company's assets to pay its liabilities.

CONTACT: Mr. Mario Norberto Aragon, Trustee
         Adolfo Alsina 1535
         Buenos Aires

SIDECO AMERICANA: Bonds Get `B(arg)' Rating From Fitch
Fitch Argentina Calificadora de Reisgo S.A. assigned a `B(arg)'
rating to US$56Mln worth of corporate bonds issued by Sideco
Americana S.A. The rating, based on the Company's finances as of
June 30, 2004, affects these issues:

- US$13.5 million worth of bonds described as "Obligaciones
Negociables" that will mature on September 30 2014.

- US$42.5 million worth of bonds described as "Obligaciones
Negociables" with undisclosed maturity date.

Fitch explains that the `B(arg)' rating indicates significant
credit risk although a limited margin of safety remains.
Financial commitments at this point are still being met.
However, capacity for continued payment depends on a sustained,
favorable business and economic environment.

CONTACT: Sideco Americana S.A.
         Carlos Maria Della Paolera 299 P 27 1001)
         Buenos Aires
         Tel: (011) 4319-3800
         Fax:(011) 4319-3880

S.H. LADRILLOS: Court Grants Reorganization Plea
S.H. Ladrillos Tristan Suarez, "conformada por David Torres
Vieira y Jose Carlos Vieira," successfully petitioned for
reorganization after court no. 12 of Lomas de Zamora's civil and
commercial tribunal issued a resolution opening the company's
insolvency proceedings.

During reorganization, the company will continue to manage its
assets subject to certain conditions imposed by Argentine law
and the oversight of a court-appointed trustee.

Infobae relates that Mr. Santo Ernesto Luparelli will serve as
trustee during the course of the reorganization. He will be
accepting creditors' proofs of claims for verification until
October 1, 2004.

After the verification period, the trustee will prepare the
individual reports and submit it in court on November 16, 2004.
The firm will also present a general report for court review on
February 8, 2005.

The company will endorse the settlement proposal, drafted from
the submitted claims, for approval by the creditors during the
informative assembly scheduled on April 1, 2005.

CONTACT: Mr. Santo Ernesto Luparelli, Trustee
         San Antonio 865


FOSTER WHEELER: Secures Eastern Petrochemical Contract
Foster Wheeler Ltd. (OTCBB: FWLRF) announced Thursday that its
UK subsidiary Foster Wheeler Energy Limited has been awarded a
program management services contract by Eastern Petrochemical
Company (SHARQ) for the expansion of SHARQ's existing
petrochemicals complex known as the SHARQ 3rd Expansion Project
to be located at Jubail Industrial City, Jubail, Kingdom of
Saudi Arabia. SHARQ is a joint venture between Saudi Basic
Industries Corporation (SABIC) and Saudi Petrochemical
Development Corp. The terms of the award were not disclosed. The
project will be included in third-quarter bookings.

"We are delighted to be involved in this major investment
program to be undertaken by Eastern Petrochemical Company," said
Steve Davies, chairman and chief executive officer, Foster
Wheeler Energy Limited. "This is yet another significant win for
Foster Wheeler and continues our recent success for similar work
with our clients in the Kingdom. We are already working as
project management consultant with SABIC for its new grassroots
petrochemicals facility to be built at Yanbu Industrial City.
This award further underscores the quality of our technical and
project management expertise and demonstrates Foster Wheeler's
competitiveness in the market- place."

"The selection of Foster Wheeler as Program Management
Contractor underlines our developing relationship with Foster
Wheeler," commented Mohammad Al-Jabri, president, Eastern
Petrochemical Company. "We are confident that this project will
benefit significantly from the similar work Foster Wheeler is
executing for SABIC's Yanbu facility."

The expansion of the existing petrochemicals complex will
include the following units: a grassroots 1,300 kilo tonnes per
annum (kta) ethylene cracker, a 800 kta polyethylene plant, a
600 kta ethylene glycol plant and associated offsites and

Foster Wheeler's scope of work as Program Management Contractor
(PMC) will include the preparation of front-end engineering
design (FEED) and preparation and issue of invitations to bid
for each of the process units, including bid evaluation and
award recommendations for engineering, procurement and
construction (EPC) contractors. Foster Wheeler will also manage
all EPC contractors and provide the overall management,
coordination and control of all phases of the program.
Mechanical completion is expected in early 2008.

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

CONTACT: Media Contact:
         Foster Wheeler Ltd.
         Ms. Maureen Bingert
         Tel: 908-730-4444
         Other Inquiries:
         Tel: 908-730-4000

         Web Site:

LUNG KEE: Robin Mayor Appointed as Liquidator


            IN THE MATTER OF Lung Kee Holdings Limited

The Sole Member of Lung Kee Holdings Limited, acting by written
consent without a meeting on September 2, 2004 passed the
following resolutions:

1) That the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981;

2) That Robin J. Mayor be and is hereby appointed Liquidator for
the purposes of such winding-up.

Mr. Mayor, the Liquidator, informs that:

- a final general meeting of the Sole Member of Lung Kee
Holdings Limited will be held at the offices of Messrs. Conyers
Dill & Pearman, Clarendon House, Church Street, Hamilton,
Bermuda on October 20, 2004 at 9:30 a.m., or as soon as possible
thereafter, for the purposes of:

1) receiving an account laid before them showing the manner in
which the winding-up of the Company has been conducted and its
property disposed of and of hearing any explanation that may be
given by the Liquidator;

2) by resolution determining the manner in which the books,
accounts and documents of the Company and of the Liquidator
shall be disposed of; and

3) by resolution dissolving the Company.

- The Creditors of Lung Kee Holdings Limited, which is being
voluntarily wound up, are required, on or before September 29,
2004 to send their full Christian and Surnames, their addresses
and descriptions, full particulars of their debts or claims, and
the names and addresses of their lawyers (if any) to the
Liquidator at Messrs. Conyers Dill & Pearman, Clarendon House,
Church Street, Hamilton, HM DX, Bermuda, and if so required by
notice in writing from the said Liquidator, and personally or by
their lawyers, to come in and prove their debts or claims at
such time and place as shall be specified in such notice, or in
default thereof they will be excluded from the benefit of any
distribution made before such debts are proved.

CONTACT: Mr. Robin J Mayor
         Clarendon House, Church Street
         Hamilton in the Islands of Bermuda

MWD TECHNOLOGIES: Members Agree To Wind-Up


         IN THE MATTER OF MWD Technologies Limited

The Members of MWD Technologies Limited held a special meeting
on the 23rd day of August 2004 and passed the following

1. That the Company be wound up voluntarily, pursuant to the
provisions of the Companies Act 1981;

2. That Malcolm Butterfield be and is hereby appointed
Liquidator for the purposes of such winding-up.

Mr. Butterfield, the Liquidator, informs that:

- The Creditors of MWD Technologies Limited, which is being
voluntarily wound up, are required, on or before September 30,
2004 to send their full Christian and Surnames, their addresses
and descriptions, full particulars of their debts or claims, and
the names and addresses of their solicitors (if any) to Malcolm
Butterfield, the undersigned, at KPMG Financial Advisory
Services Limited, Crown House, 4 Par-La-Ville Road, Hamilton, HM
08, Bermuda, the Liquidator of the said Company, and if so
required by notice in writing from the said Liquidator, and
personally or by their solicitors, to come in and prove their
debts or claims at such time as shall be specified in such
notice, or in default thereof they will be excluded from the
benefit of any distribution made before such debts are proved.

CONTACT: Mr. Malcolm Butterfield
         KPMG Financial Advisory Services Limited
         Crown House, 4 Par-La-Ville Road
         Hamilton in the Islands of Bermuda


ACESITA: Plans to Group Shares to Bolster Stock Liquidity
Stainless steelmaker Acesita informed the Sao Paulo stock
exchange that it has secured approval from the board to group
its shares to increase stock liquidity and cut costs, reports
Business News Americas.

The proposal, which awaits approval from the company's
shareholders at a meeting scheduled for October 5, allows
Acesita to convert each 10,000 shares into one. Currently,
Acesita (Bovespa: ACES4) is traded in lots of 1,000 shares.

The company's 745.48 billion shares, which include 249.01
billion common shares and 496.47 billion preferred shares, will
be converted into 74.54 million shares, which would include 24.9
million common shares and 49.64 million preferred shares.

At the same time, Acesita's ADRs will be traded in the
proportion of one share for each two ADRs, the company said in a
statement to the bourse.

Acesita is controlled by European steel group Arcelor and local
pension funds.

CSN: S&P Affirms Ratings; Rates Notes 'B+'
Standard & Poor's Ratings Services affirmed its 'BB' local-
currency and 'B+' foreign-currency corporate credit ratings on
Brazil's integrated carbon flat steel maker Companhia
Siderurgica Nacional (CSN). At the same time, Standard & Poor's
assigned its 'B+' foreign-currency rating to the forthcoming
$200 million guaranteed notes, due January 2015, to be issued by
CSN Islands IX Corp. and unconditionally and irrevocably
guaranteed by CSN. The outlook on the local-currency corporate
credit rating is stable. The outlook on the foreign-currency
corporate credit rating is positive.

The local-currency rating on CSN reflects the company's exposure
to the volatile and cyclical global steel industry, which
despite its current favorable price environment, is
intrinsically exposed to strong price oscillations; the
company's relative exposure to the volatile Brazilian economy;
and a still-heavy gross leverage profile (for analytical
purposes, Standard & Poor's takes account of gross leverage
ratios, adding up debts at the controlling shareholder level).
Despite its improved duration and strengthened liquidity,
current debt levels still pose some risks to CSN, as there is
some debt maturity concentration in years ahead. Finally, the
ratings incorporate the risks of CSN's significant capital
expenditure program for the next three to four years, aimed at
bringing the production capacity of its Casa de Pedra iron ore
mine up to a pace of 40 million metric tons per year (tpy).

These risks are offset by CSN's very sound and favorable
operating and business profiles, evidenced by its distinguished
positioning in the global steel industry as one of the lowest-
cost integrated carbon flat steel producers in the world; strong
and growing export capabilities; and increasing business
diversification projected for the near term with the addition of
an iron ore export operation. "The ratings also factor CSN's
strong liquidity in the form of high cash reserves as a source
of financial flexibility, as well as resilient and robust
positive free operating cash flow projected for the next several
years, even more so under the current favorable price
environment," said Standard & Poor's credit analyst Reginaldo

Prospects for the rest of 2004 remain favorable. While there are
some signs that global steel prices may be reaching
accommodation and that peak prices are to be left behind, the
industry fundamentals remain strong enough to sustain prices at
much higher levels than those of past years. CSN is sold out
through the next several months at solid price levels, and
negotiations for 2005 are expected to remain favorable. In
Brazil, utilization rates for all Brazilian steel makers remain
close to full capacity by now, equally pointing to a favorable
price environment and positive spreads that traditionally have
been practiced relative to international prices. In the specific
case of CSN, margins should also be positively affected by
product mix improvements, as the company grows higher value-
added sales with the acquisition of GalvaSud S.A. In the medium
to long term, CSN's business profile is enhanced by the
expansion of its proprietary iron ore mine, Casa de Pedra. The
addition of exports of more than 20 million tpy of iron ore
products (starting in 2005 and reaching capacity in 2007) is a
relevant positive for CSN's business profile, as the iron ore
seaborne market tends to be considerably more stable than is the
global steel market.

CSN is one of the largest integrated flat steel makers in
Brazil, producing slabs, hot-rolled, cold-rolled, and galvanized
flat steel products to a diverse group of domestic and foreign
clients. The company produced 2.7 million tons of crude steel in
first-half 2004, selling 2.5 million tons of steel products in
the same period.

The stable outlook on CSN's local-currency corporate credit
rating reflects Standard & Poor's expectations that CSN will
manage to preserve reasonably strong liquidity in the future
thanks to its strong cash generation and despite capital
commitments already announced. The outlook also assumes that CSN
will be able to maintain sound operating results through the
steel industry cycle thanks to its favorable cost position and
reasonably fair access to global steel markets. Acquisitions or
further capital commitments that could potentially hurt this
condition or add financial leverage were not assumed by Standard
& Poor's and could lead to a negative revision of the ratings or
outlook. On the other hand, strengthening results to levels not
factored yet or a much more conservative financial profile
(essentially embedded in lower total gross debt balances) could
lead to a positive revision of the ratings or outlook in the
medium term.

The positive outlook on the foreign currency rating reflects
that of the sovereign currency rating of the Federative Republic
of Brazil.

ANALYSTS:  Reginaldo Takara, Sao Paulo (55) 11-5501-8932
           Milena Zaniboni, Sao Paulo (55) 11-5501-8945


* COLOMBIA: Exchanges 2005 Treasurys For 2007, 2009 Notes
Colombia swapped Thursday COP1.34 trillion ($1=COP2,518.15) of
local TES Treasurys maturing in 2005 for TES maturing in 2007
and 2009 in an operation that allows the government to cut 2005
local debt amortizations by 13%, Dow Jones Newswires reports.

According to the Ministry of Finance, the yield for TES notes
maturing in March 2007 was priced at 10.70%, while the July 2009
notes yield 12.70%.

"We think that this transaction will not be the last one, since
fiscal pressures increase in the next years. The government has
to give priority to higher-than-expected pension obligations and
military spending," said Arnoldo Casas, a fixed-income analyst
at Promotora Bursatil.


PETROECUADOR: Takes U.S. Company to Court
State oil company Petroecuador sued US-based Occidental
Petroleum Corp. (NYSE: OXY) for failing to obtain Ecuador's
authorization at the proper time to transfer a 40% stake in its
operations in block 15 to Canada's EnCana Corp., reports
Business News Americas.

Occidental, which has already been notified of the complaint,
has 10 days to respond. If Petroecuador is not satisfied with
Occidental's response, the state firm could present its case to
the minister of energy Eduardo Lopez, who would make a final

If the decision went against Occidental, the company could
appeal to local courts or an international arbitrator.
Occidental, which invested more than US$1 billion in block 15,
has vowed to fight the case.

The transfer operation between Occidental and Encana was
reported to US regulators in 2001 but Occidental did not solicit
approval from Ecuador's energy ministry for the deal until July
2004. As a result, both Ecuador's attorney general and the
energy ministry are pressuring Petroecuador to end Occidental's
oil production contract, signed in 1999.

The dispute arose after an international tribunal in August
ordered Ecuador to pay Occidental a US$75-million tax rebate.
The government is appealing the decision.


GRUPO IUSACELL: Sees Debt Accord Before Yearend
Grupo Iusacell, S.A. de C.V. (Iusacell, NYSE and BMV: CEL), a
wireless cellular and PCS service provider in Mexico, hopes to
seal a debt deal with creditors by the end of the year.

In an interview with Reuters, Iusacell's Chief Executive Gustavo
Guzman said: "There is real communication between the parties."

"This will enable us, in a reasonable length of time of three or
four months, to start thinking about being able to reach an
accord." Guzman said this would mean a deal before the end of
the year. "This is what I expect and this is what I am asking
for from the chief financial officer."

Iusacell, owned by retail and media tycoon Ricardo Salinas, has
defaulted on debt obligations over the past year, sparking legal
battles with some of its creditors. The company has not been
able to renegotiate its debt pile of about US$800 million.

Earlier this year, Iusacell hired New York-based financial
advisory firm Hill Street Capital to help it with debt

CONTACTS:  Ricardo Salinas Pliego, Chairman
           Gustavo Guzman, CEO, Director
           Prolongacion Paseo, De La Reforma 1236
           Mexico, D.F.,  05348
           Phone: (525) 109-4400
           Web Site:

GRUPO POSADAS: Moody's Rates Proposed $150M Notes Offering Ba3
Moody's Investors Service assigned a Ba3 Senior Implied Rating
to Mexican hotels operator Grupo Posadas S.A. de C.V. and a Ba3
rating to the company's proposed offering of US$150 million in
Senior Unsecured Guaranteed Notes due 2011. The outlook is

Grupo Posadas recently announced its intention to sell
approximately US$150 million senior notes to pay down existing
short-term debt and extend the maturity profile. The notes,
which are to be 100% guaranteed by its subsidiaries, won't be
registered under the Securities Act of 1933.

The Ba3 rating on the notes is supported by upstream guarantees
from the company's restricted subsidiaries, which, in
conjunction with the holding company, generate around 75% of
consolidated EBITDA.

Posadas reported debt of US$331.5 million at the end of the
second quarter, with an average life of 2.5 years, which it said
it was hoping to extend. In 2003, the company reported sales of
MXN3.9 billion with an EBITDA of MXN953 million.

GRUPO TMM: Regulator Denies Kansas City Bid for Stake
Kansas City Southern (NYSE:KSU) and Grupo TMM, S.A. (NYSE:TMM)
and (BMV: TMM A) announced Thursday that Mexico's Foreign
Investment Commission ("FIC") delivered a notice that the FIC
had resolved to deny KCS' application for authorization of KCS'
proposed acquisition of TMM's interest in TFM, S.A. de C.V.,
which operates a major rail freight carrier in Mexico. The
approval of the FIC is necessary for a foreign company to become
a majority owner of a Mexican-based railway company.

KCS and TMM stated that they are disappointed by this decision,
and that it is not in the spirit of the North American Free
Trade Agreement ("NAFTA") nor consistent with previous decisions
made by the FIC on foreign majority ownership, including
ownership of another railroad in Mexico.

KCS and TMM are actively involved in discussions with the FIC
and believe that they are close to an agreement to resolve these
matters. KCS and TMM will seek reconsideration of this decision
and remain confident that they should ultimately obtain approval
of the transaction. KCS and TMM have agreed to extend the
current deadline under the April 20, 2003 acquisition agreement
until June 15, 2005 to provide additional time to complete this

KCS is a transportation holding company that has railroad
investments in the United States, Mexico, and Panama. Its
primary holding is The Kansas City Southern Railway Company.
Headquartered in Kansas City, Missouri. KCS serves customers in
the central and south central regions of the U.S. KCS' rail
holdings and investments are primary components of a NAFTA
Railway system that links the commercial and industrial centers
of the United States, Canada and Mexico.

Headquartered in Mexico City, Grupo TMM is Latin America's
largest multimodal transportation company. Through its branch
offices and network of subsidiary companies, Grupo TMM provides
a dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in TFM, which operates
Mexico's Northeast railway and carries over 40 percent of the
country's rail cargo.

         Investor Relations:
         Mr. Brad Skinner
         Tel: 011-525-55-629-8725

         Media Relations, Proa/Structura:
         Mr. Marco Provencio
         Tel: 011-525-55-629-8708

         Desner Corporate Services:
        (general investors, analysts and media)
         Ms. Kristine Walczak
         Tel: 312-726-3600

         Kansas City Southern:
         Mr. Warren K. Erdman
         Tel: 816-983-1454

         Media Relations
         Mr. Gabriel Guerra
         Tel: 011-525-55-273-5359

         Web Site:


* PARAGUAY: IMF Concludes Article IV Consultation
On July 30, 2004, the Executive Board of the International
Monetary Fund (IMF) concluded the Article IV consultation with


The Paraguayan economy is beginning to emerge from a long period
of slow growth. The regional crisis, problems with drought and
foot-and-mouth disease in agriculture, and a banking crisis, all
contributed to a drop of 2.3 percent in GDP in 2002. There was a
sharp depreciation of the exchange rate in 2002 and inflation
accelerated, reaching 20 percent in early 2003. A bumper harvest
produced positive GDP growth of an estimated 2.6 percent in
2003. Banking system deposits recovered, the exchange rate
appreciated against the dollar, and inflation eased to 9 percent
at year-end.

In 2004, the economy has stabilized but growth remains modest. A
late season drought depressed output of soy, the largest export
crop, reducing expected agricultural output growth to near zero,
but nonagricultural output is recovering. The guaran¡ has
strengthened by 4 percent against the dollar so far in 2004. The
strong guaran¡ contributed to a sharp fall in inflation. Year-
on-year inflation through June was 5.5 percent, with inflation
for the year as a whole expected at around 4-5 percent.

The fiscal situation has improved markedly since the new
government took office in August 2003. The consolidated balance
of the nonfinancial public sector moved from a deficit of 3.1
percent of GDP in 2002 to balance in 2003. The primary balance
improved from a deficit of 1.3 percent of GDP in 2002 to a
surplus of 2.4 percent in 2003. The government has made
significant progress in clearing substantial public sector
payments arrears.

Monetary policy has been geared toward a flexible exchange rate
regime since the de facto currency peg was abandoned in 2001.
Official reserves rose by US$342 million-to US$983 million-
during 2003. Base money growth accelerated sharply in 2003, as
the economy began to remonetize after the banking crises.
Interest rates on Central Bank bills have declined from their
peak of 33 percent in August 2002, reaching 13 percent by
December 2003.

Executive Board Assessment

Directors praised Paraguay's strong economic performance over
the past year, with growth rebounding and a sharp decline in
inflation. The vulnerability of the economy has been reduced and
the country's credit rating improved, as the authorities
increased international reserves, resolved external payments
difficulties, and embarked on courageous fiscal and structural
reforms. In particular, Directors welcomed the approval of the
Administrative Reorganization and Fiscal Adjustment Law and the
Customs Code, and the government's strong determination to
improve governance. They commended the authorities for the
remarkable progress in raising the efficiency of tax and customs

Directors agreed that important challenges nevertheless remain.
They encouraged the authorities to continue to work for the
timely passage of the Public Bank Reform Law, to
institutionalize the progress achieved on fiscal sustainability,
and to further deepen the reform effort in areas that are
critical to raising Paraguay's growth performance.

Directors considered that the Administrative Reorganization and
Fiscal Adjustment Law, along with the additional measures
announced by the authorities, provides a sound basis for
balanced budgets in the medium term by raising new revenue,
broadening the value-added tax (VAT) and income tax base,
eliminating exemptions, and strengthening tax administration.
Full implementation of these measures will also help generate
resources for a much-needed increase in capital investment and
social spending.

Directors commended the authorities for raising the efficiency
of tax and customs collections, as evidenced by the strong
increase in revenue so far in 2004-with no increase in tax
rates. They urged the authorities to institutionalize these
gains by restructuring the tax and customs authorities, and
ensuring that they have the resources needed to carry out fully
their responsibilities as defined in the new law.

Directors welcomed the authorities' tight control of current
expenditures and urged continued prudence, in particular on wage
increases. They also stressed that new capital investment and
social spending should be of high quality and well prioritized.
Directors encouraged the authorities to remain firm on resisting
pressures for increased spending to stimulate demand, as this
would likely endanger fiscal stability without supporting
sustainable increases in growth. Looking ahead, the authorities
should undertake a full-fledged public expenditure reform,
including civil service reform, which will be critical to
ensuring long-term sustainability.

Directors welcomed the progress in eliminating domestic and
external payments arrears, while urging the authorities to
further improve debt monitoring and cash flow procedures, and to
resolve disputed arrears. Directors also welcomed the
improvement in the outlook for public enterprises, but noted
that cash flow problems in some of them underscore the need for
continued restructuring. They encouraged the authorities to
permit private investment and management of the public
enterprises, and take further measures to improve their
governance and transparency, including through timely completion
of the audits of public entities.

Directors welcomed the improvement in the management of monetary
policy, as reflected in the marked decline in inflation and the
increase in international reserves. They encouraged the
authorities to continue with preparations for inflation
targeting while noting that the ground must be well-prepared
before a move in that direction. In this context, they urged the
authorities to clarify their monetary policy objectives by
limiting their interventions in the foreign exchange market and
giving freer play to market forces in determining the exchange
rate. They also encouraged legislation to strengthen the formal
independence of the central bank as well as further development
of market-based instruments to facilitate the conduct of
monetary policy. Directors noted that banking system risks have
eased, although the level of nonperforming loans remains high.
They stressed that public banking reform, including passage by
congress of the Public Bank Reform Law, remains crucial to
further strengthen the system. The authorities also need to work
toward approval of comprehensive banking legislation, extension
of a supervisory regime to cooperatives, and mandatory
introduction of international risk classifications for all
banks. Directors supported the authorities' request for an FSAP.
They commended the authorities' AML/CFT efforts, and looked
forward to the timely enactment of legislation in this area.

Directors observed that a deepening of the reform effort will be
needed to raise Paraguay's growth potential and make faster
progress, with international support, toward the Millennium
Development Goals. Building on recent commendable progress in
strengthening governance, further efforts are needed to address
corruption, reform the judicial system, and restructure the
public sector to increase its professionalism and transparency,
and reduce its size and scope. Programs to promote human capital
development will also play an important role in increasing
productivity and growth. Directors welcomed the authorities'
commitment to maintaining an open exchange and trade system, and
encouraged them to undertake additional actions to capture
unregistered trade.


Public Information Notices (PINs) are issued, (i) at the request
of a member country, following the conclusion of the Article IV
consultation for countries seeking to make known the views of
the IMF to the public. This action is intended to strengthen IMF
surveillance over the economic policies of member countries by
increasing the transparency of the IMF's assessment of these
policies; and (ii) following policy discussions in the Executive
Board at the decision of the Board.

To view selected economic indicators:

CONTACT: International Monetary Fund
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         Washington, D.C. 20431 USA

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UTE: Wants More Time to Study Offer for Turnkey Contract
A source from Uruguay's state-owned power company UTE said that
the utility is seeking more time to study bids for a turnkey
contract to build a 350-400MW combined cycle thermoelectric
power plant in San Jose department, some 15-20km from
Montevideo, says Business News Americas.

Companies that have already submitted their bids include Fiat
Engineering do Brasil, General Electric, Alstom and Siemens
Westinghouse in June. The offers are set to expire this week,
but the source said UTE asked companies to extend the validity
of their offers for 30 days.

The technical offers have been opened already, but not the
economic bids. "We don't know the investment because we haven't
opened the economic bids yet," the spokesperson said.

The tender is "very complicated" and recent estimates have
increased the cost of the project from US$160mn initially to
more than US$200mn "which changes the equation of the business,"
newspaper El Pais quoted other UTE sources as saying.

"The investments involved have changed value and...the turbines
required could be available today but not tomorrow," the sources

Moreover, the plant's Argentine gas supplies are in doubt,
because it is unclear if the operator would have to pay for the
gas in US dollars or if there is sufficient availability of gas
given Argentina's ongoing gas crisis.

"The comparison between the offers is very difficult - also,
none of them comply with all the requirements," the sources


PDVSA: NB Power Hopes to Gain High-sulfer Fuel Agreement
Jeffrey Carleton, a spokesperson of Canadian energy company NB
Power, announced that his company is negotiating with
Venezuela's state oil company PDVSA to supply high-sulfur fuel
instead of orimulsion to operate its US$750-million, 1,050MW
Coleson Cove generator.

Business News Americas recalls that NB Power committed over
US$600 million to convert Coleson Cove to orimulsion from oil
after it reached an agreement with PDVSA's Bitor subsidiary.
However, Venezuela decided in September 2003 to discontinue
orimulsion contracts and said it would absorb Bitor's operations
into PDVSA.

The decision prompted NP Power to lodge a US$2-billion suit
against PDVSA and Bitor for breaking the 20-year agreement to
supply orimulsion to Coleson Cove. PDVSA denied a firm agreement
ever existed.

Now, NB Power is reconfiguring Coleson Cove to allow the plant
to operate with an inexpensive fuel other than orimulsion once
the conversion is completed this year.


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

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

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