TCRLA_Public/040928.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Tuesday, September 28, 2004, Vol. 5, Issue 192

                            Headlines


A R G E N T I N A

ARDAN S.A.: Bankruptcy Process Begins with Court Order
CROWS INTERNATIONAL: Claims Verification Period Ends Tomorrow
DECARI S.A.: Court Approves Creditor's Bankruptcy Motion
DISCO: Antitrust Regulator Awaits Judicial Decisions
INSTRUMENTAL GMG: Individual Reports Due for Submission

L ARLESIENNE: General Report Due Today
MAZTLAN: Court Declares Company Bankrupt
MON-TON S.A.: Court Favors Creditor's Bankruptcy Request
NIVEL SALUD: Trustee to Submit General Report
PARMALAT ARGENTINA: Local Group Agrees to Pay $20M For Ownership

PROIN ALIMENTOS: Files Petition to Reorganize
SANFER 2000: Liquidates Assets to Pay Debts


B A H A M A S

ULTRAPETROL BAHAMAS: S&P Affirms Ratings


B A R B A D O S

TRANS ISLAND AIR: Halts Flights But Business Continues


B E R M U D A

FOSTER WHEELER: Issues More Details on Exchange Offer Closing
FOSTER WHEELER: Schedules Annual Shareholders' General Meeting


B R A Z I L

CEMIG: To Tap Deal Consultant This Week
CSN: Fitch Rates $200M, 10-year Issuance 'B+'
VASP: Regulator Grounds Six Aircraft


C O L O M B I A

ROYAL SHELL: Negotiating Sale of InterGen
* COLOMBIA: Secures $100M World Bank Loan


H O N D U R A S

* HONDURAS: IMF Completes Review of $104.3M PRGF Arrangement


M E X I C O

EMPRESAS ICA: Joint Venture Inks $134M Pemex Deal
GRUPO IUSACELL: Utilizing Lucent to Upgrade Network
VITRO: Unit Takes Out $230M Credit To Pay Down Debt


U R U G U A Y

PLUNA: British Fund Offers to Buy Varig's Stake


     - - - - - - - - - -

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

ARDAN S.A.: Bankruptcy Process Begins with Court Order
------------------------------------------------------
Buenos Aires-based Ardan S.A. enters bankruptcy protection after
court no. 23 of the city's civil and commercial tribunal ordered
the Company's liquidation. The order effectively transfers
control of the company's assets to the court-appointed trustee
who will supervise the liquidation proceedings.

Infobae reports that the court selected Ms. Susana H. Vacchelli
as trustee. She will be verifying creditors' proofs of claims
until the end of the verification phase on November 10, 2004.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the company's accounting
and business records. The individual reports will be submitted
on December 23, 2004 followed by the general report, which is
due on March 8 next year.

CONTACT: Ardan S.A.
         Tacuari 32
         Buenos Aires

         Ms. Susana H. Vacchelli, Trustee
         Montevideo 571
         Buenos Aires


CROWS INTERNATIONAL: Claims Verification Period Ends Tomorrow
-------------------------------------------------------------
Ms. Marta Mabel Linares, the trustee overseeing the liquidation
of Crows International S.A., will close the review and
validation of creditors' claims pertaining to the case tomorrow,
September 29, 2004. Creditors are required to submit all
relevant documents to the trustee before the deadline to qualify
for the post liquidation payments that will be made.

The Company's creditor, Banco Regional de Cuyo S.A., filed the
liquidation petition after Crows defaulted on a US$300,406.25
debt payment. Judge Dieuzeide of Buenos Aires' civil and
commercial tribunal court no. 1 has jurisdiction over this case.

CONTACT: Crows International S.A.
         Avenida Cordoba 1351
         Buenos Aires

         Ms. Marta Mabel Linares, Trustee
         Parana 145
         Buenos Aires


DECARI S.A.: Court Approves Creditor's Bankruptcy Motion
---------------------------------------------------------
Court no. 13 of Buenos Aires' civil and commercial tribunal
declared local company Decari S.A., formerly named Petrone
Hermanos S.A., bankrupt. La Nacion reports that the ruling comes
in approval of the bankruptcy petition filed by the Company's
creditor, Ms. Josefina Frias, for nonpayment of US$114,256.04 in
debt.

Court-appointed trustee Liliana Busto will examine and
authenticate creditors' claims until November 5, 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. Cardama, clerk no. 26, assists the court on the case that
will conclude with the liquidation of the Company's assets.

CONTACT: Decari S.A.
         Pedro de Mendoza 2719
         Buenos Aires

         Ms. Liliana Busto, Trustee
         Campana 2269
         Buenos Aires


DISCO: Antitrust Regulator Awaits Judicial Decisions
----------------------------------------------------
Federal court rulings blocking the sale of supermarket chain
Disco to Chilean retailer Cencosud are causing delays in the
antitrust authorities' decision over the transaction. Dow Jones
Newswires recalls that two federal judges in separate cities in
the province of Mendoza have issued rulings blocking Cencosud's
acquisition. Mr. Ismael Malis, who heads Argentina's National
Commission for Defense of Competition, said his office has
appealed the Mendoza court decisions but isn't able to advance
with the analysis in the meantime.

"When the (judicial) decision arrives, we will take the study up
again," Dow Jones quoted Malis as saying.

Consumer groups and some lawmakers are opposed to the Disco-
Cencosud, as it will lead to over-concentration in Argentina's
retail sector. A required stage of the antitrust process that
invites interested parties to present their views on the
transaction hasn't yet taken place because of the court rulings.

CONTACT:  DISCO S.A.
          Larrea 847, Piso 1
          1117 Buenos Aires, Argentina
          Phone: +54-11-4964-8000
          Fax: +54-11-4964-8076
          Home Page: http://www.disco.com.ar


INSTRUMENTAL GMG: Individual Reports Due for Submission
-------------------------------------------------------
Court no. 6 of Buenos Aires' civil and commercial tribunal
expects to receive individual reports from the Instrumental GMG
bankruptcy case today. Mr. Miguel A. Franqueiro, the trustee
handling the proceedings, prepared these reports from the claims
submitted by the Company's creditors during the verification
period. The court will base the final list of creditors eligible
to receive post-liquidation payments from the individual
reports.

CONTACT: Mr. Miguel A. Franqueiro, Trustee
         Corrientes 534
         Buenos Aires


L ARLESIENNE: General Report Due Today
--------------------------------------
A general report on the L Arlesienne S.R.L. bankruptcy case is
due for court submission today. Trustee Alberto Jorge Rotenberg
prepared this report from the company's accounting and business
records. The report also provides the court with information on
the Company's liquidation proceedings.

Court no. 14 of Buenos Aires' civil and commercial tribunal,
assisted by clerk no. 28, has jurisdiction over this case.

CONTACT: Mr. Alberto Jorge Rotenberg, Trustee
         Av Cordoba 1336
         Buenos Aires


MAZTLAN: Court Declares Company Bankrupt
----------------------------------------
Court no. 7 of Buenos Aires' civil and commercial tribunal
declared local company Maztlan Distribuciones S.A. "Quiebra",
relates La Nacion.
The order transfers control of the Company's assets to a court-
appointed trustee who will supervise the liquidation
proceedings.

Clerk no. 14 assists the court on the case.

CONTACT: Maztlan Distribuciones S.A.
         Enrique Finochietto 436
         Buenos Aires


MON-TON S.A.: Court Favors Creditor's Bankruptcy Request
--------------------------------------------------------
Construction company Mon-Ton S.A. entered bankruptcy protection
after court no. 3 of Buenos Aires' civil and commercial tribunal
approved a bankruptcy motion filed by, Ms. Maria Elena Martinez
de Olivieri. La Nacion says that the Company's failure to pay
US$68,817 in debt prompted the creditor to file the petition.

The Company's assets will be liquidated at the end of the
bankruptcy process to repay creditors.

CONTACT: Mon-Ton S.A.
         Av. de Mayo 950
         Buenos Aires


NIVEL SALUD: Trustee to Submit General Report
---------------------------------------------
Trustee Fernando Ezequiel Aquilino will submit a general report
on the Nivel Salud S.A. bankruptcy case today. The general
report provides court no. 2 of Buenos Aires' civil and
commercial tribunal with an audit of the Company's accounting
and business records. The report also details important event
during the proceedings.

The Company's case will conclude with the liquidation of its
assets to repay creditors. Clerk No. 3 assists the court on this
case.

CONTACT:  Mr. Fernando Ezequiel Aquilino, Trustee
          Lavalle 1459
          Buenos Aires


PARMALAT ARGENTINA: Local Group Agrees to Pay $20M For Ownership
----------------------------------------------------------------
An Argentine group led by businessman Sergio Tasselli signed a
deal Friday to purchase the local subsidiary of the embattled
Italian dairy giant Parmalat for US$20 million, reports EFE.
The transaction terms include that the buyer will assume
Parmalat Argentina's US$70 million debt.

The deal will be formally announced in a month after the Italian
government approves the sale, as the company was placed under
the management of a committee headed by turnaround expert Enrico
Bondi, appointed by the Italian Industry Ministry.


PROIN ALIMENTOS: Files Petition to Reorganize
---------------------------------------------
Proin Alimentos S.A. filed a "Concurso Preventivo" motion,
reports La Nacion. The Company is seeking to reorganize its
finances after defaulting on debt payments since August 29,
2002.

The Company's case is pending before Judge Braga of Buenos
Aires' civil and commercial tribunal court no. 22. Clerk no. 44,
Dr. Julianelli, assists the court in the proceedings.

CONTACT: Proin Alimentos S.A.
         Lavalle 1523
         Buenos Aires


SANFER 2000: Liquidates Assets to Pay Debts
-------------------------------------------
Sanfer 2000 S.A. will begin liquidating its assets following the
bankruptcy pronouncement issued by court no. 2 of Buenos Aires'
civil and commercial tribunal, reports Infobae. The ruling
places the company under the supervision of court-appointed
trustee, Ms. Beatriz Laura Colucci. The trustee will verify
creditors' proofs of claims until November 5, 2004. Afterwards,
the validated claims will be presented in court as individual
reports on February 1, 2005.

Ms. Colucci 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 18, 2005.

The bankruptcy process will end with the disposal company assets
in favor of its creditors. Clerk no. 4 assist the court on this
case.

CONTACT: Ms. Beatriz Laura Colucci, Trustee
         Eduardo Acevedo 217
         Buenos Aires



=============
B A H A M A S
=============

ULTRAPETROL BAHAMAS: S&P Affirms Ratings
----------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' local and
foreign corporate credit rating on Bahamas-based shipping
transportation company Ultrapetrol (Bahamas) Ltd. The outlook is
negative.

The ratings on Ultrapetrol reflect its aggressive financial
profile, characterized by substantial debt leverage; its plans
to continue acquiring and building new vessels in the next
several years; and a still-concentrated aging fleet and customer
base, which exposes the company to higher operating and
commercial risks in that they could affect revenues and cash
generation. These negatives are partly offset by the company's
expertise and niche positioning in the tanker and dry bulk
business in South America, with particularly strong commercial
relationships with the largest oil companies and trading
companies in the region; and some increasing business
diversification, with the strengthening of its position in the
river barge operation and its minority stake in the construction
and operation of platform supply vessels (PSVs). Ultrapetrol's
total debt amounted to $184 million as of June 30, 2004.

"We have expected Ultrapetrol to report improved financial
ratios since the end of 2003, when tanker charter rates started
rising substantially due to tight supply and increasing oil
trades with the global economic recovery," said Standard &
Poor's credit analyst Reginaldo Takara. "Nevertheless, the
company's performance remained weak, lagging market improvement,
because virtually all of its vessels were locked into charter
contracts at lower rates."

The 'BB-' rating assigned to Ultrapetrol factors continuing
strengthening of cash generation and the maintenance of minimum
cash reserves to service short-term debt, in particular because
the company has plans to continue investing in acquisition of
new vessels. The acquisition of UABL and favorable charter rates
projected for the medium term should allow Ultrapetrol to
continue improving credit measures and reporting much more
robust cash generation.

After divesting its oldest and single-hull vessels during 2003
and 2004, Ultrapetrol now operates a fleet of three Suezmax OBOs
(Princess Katherine, Princess Nadia, and Princess Susana), one
Aframax tanker (Princess Marina), and two oceangoing tug barges
(Alianza G2 and Alianza G3). Through its subsidiary, UABL, it
also operates 456 river barges and 22 pushboats used in cabotage
in the Parana-Paraguay River System. UABL is the leading company
in the region with a 46% capacity share. The company also holds
60% of Ultracape (Holdings) Ltd., a joint venture that currently
owns a Capesize bulkcarrier (Cape Pampas), and a 27.8% stake in
UP Offshore Ltd., a joint venture created to build and operate
several PSVs in Brazil.

The negative outlook addresses the risks associated with
Ultrapetrol's substantial debt leverage, some refinancing risks
posed by its existing 2008 debt maturity, and the company's weak
financial performance that only by now is showing signs of
recovery, despite the fact that market conditions have been
quite positive for some time. The negative outlook also reflects
the potential risks associated with the company's plans of new
builds and acquisitions going forward, which may constrain
liquidity somewhat.

The current benign environment and Ultrapetrol's divestment of
single-hull vessels should allow it to continually and
consistently improve its financial ratios within the next
several quarters, allowing it to reach ratios more commensurate
with its rating category by first-half 2005. While debt is not
expected to decline any time soon, the company's financial
profile should substantially improve with more robust cash
generation. Ultrapetrol's inability to reach expected financial
ratios by mid-2005 or capital expenditures higher than projected
would lead to a downward revision of the ratings. Standard &
Poor's also assumes that Ultrapetrol will improve its debt
duration throughout the next several years. On the other hand,
the ratings outlook could be revised to stable if Ultrapetrol
manages to strengthen liquidity and expand cash generation
through the cycle, with a younger and more efficient fleet, and
reinforce its leading position in river barges in the Parana
river.

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



===============
B A R B A D O S
===============

TRANS ISLAND AIR: Halts Flights But Business Continues
------------------------------------------------------
Mr. Bruce Kaufman, CEO of Trans Island Air (TIA) 2000, caught
his employees by surprise on Saturday when he announced his
decision to halt the airline's flights.

"Over the past five years the company has suffered large
financial losses and there are no signs we can identify that
would indicate we could expect any improvement in this regard in
the near future which would make it possible for the company to
expect any return on its invested capital," the Barbados Nation
quoted Kaufman as saying.

Kaufman told the SUNDAY SUN that during the first four years of
business he made "personal sacrifices" to sustain the company
and had even paid 50% of the salaries out of his pocket.

"I had to cover all the expenses. When I took it over, the
company hadn't made any money in a long time and I was thinking
that I would be a magician and turn it around," he said.

The airline, however, continues to operate with a downsized
staff and continues to accept reservations. However, passengers
will now be transported by TIA's partners, Mustique Airways and
SVG Air Ltd.




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

FOSTER WHEELER: Issues More Details on Exchange Offer Closing
-------------------------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWLRF) announced Friday that it has
successfully completed its equity-for-debt exchange. The
exchange reduces Foster Wheeler's existing debt by approximately
$447 million, improves the company's consolidated net worth by
approximately $453 million, reduces interest expense by
approximately $28 million per year, and, when combined with the
sale of new notes to repay amounts currently outstanding under
Foster Wheeler's existing domestic credit agreement, eliminates
substantially all material scheduled corporate debt maturities
prior to 2011. The exchange of any securities tendered during
the company's ongoing subsequent offering period would have the
effect of improving these results.

"With this major financial milestone behind us, we can now focus
on competing for quality contracts in the world arena and
providing world class products and services to our clients,"
said Raymond J. Milchovich, chairman, president, and chief
executive officer. "We truly appreciate the confidence shown by
the investors who have exchanged their debt securities for
equity ownership in our company."

Accounting Treatment:

The accounting related to the completed exchange will be
described in detail in Foster Wheeler's Form 10-Q for the third
quarter of 2004, which the company expects to file in early
November 2004. The accounting treatment for the exchange is also
described in the registration statement on Form S-4 (File No.
333-107054). The accounting treatment is dependent, in part, on
the market value of the securities issued in connection with the
exchange and on the results of the ongoing subsequent offering
period. The company believes the preferred shares and the Class
A warrants will begin trading on the OTC market in the near
future.

The exchange offer is expected to result in a reduction in
shareholders' deficit of approximately $453 million in the third
quarter of 2004. This results from an aggregate increase in
common and preferred stock and paid in capital of approximately
$623 million related to the issuance of new equity securities in
exchange for debt, offset by a non-cash, after-tax charge to
income of approximately $170 million. The pro forma, non-cash
charge is related primarily to the accounting treatment required
by SFAS 84 for the exchange of the Convertible Subordinated
Notes, and it assumes the price of the company's common stock at
market close Friday ($0.47). Any securities tendered during the
current subsequent offering period would have the effect of
further reducing the company's shareholders' deficit. The
results of the subsequent offering period will be accounted for
in the fourth quarter of 2004.

As a result of the closing of the exchange, the number of shares
of the company's common stock will increase from approximately
41 million shares to the equivalent of approximately 1,200
million shares. The foregoing:

1) assumes the preferred shares issued at the closing of the
exchange are converted into common shares;

2) assumes the exercise of all warrants issued to (a) holders of
record of the company's common stock as of 5:00 p.m. on the day
immediately preceding the closing (Class B Warrants) and (b)
those who tendered their trust preferred securities prior to
5:00 p.m. on September 21, 2004 (Class A Warrants); and

3) includes stock options and restricted stock expected to be
issued to management.

A pro forma balance sheet depicting the expected accounting
treatment under the extinguishment method of accounting and
based upon the value of the securities exchanged as of the close
of business on September 24, 2004 can be viewed at:
http://bankrupt.com/misc/FWLRF.htm

Subsequent Offering Period:

Foster Wheeler also reminds investors that its subsequent
offering period will expire at 5:00 p.m., New York City time, on
October 20, 2004.

Investors and security holders are urged to read the following
documents filed with the SEC, as amended from time to time,
relating to the exchange offer because they contain important
information:

1) the registration statement on Form S-4 (File No. 333-107054);
and

2) the Schedule TO (File No. 005-79124). These and any other
documents relating to the exchange offer, when they are filed
with the SEC, may be obtained free at the SEC's Web site at
www.sec.gov.

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

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

CONTACT: Foster Wheeler
         Media Contact:
         Ms. Maureen Bingert
         Phone: 908-730-4444

         Investor Contact:
         Mr. John Doyle
         Phone: 908-730-4270

         Other Inquiries:
         Phone: 908-730-4000

         Web Site: http://www.fwc.com/


FOSTER WHEELER: Schedules Annual Shareholders' General Meeting
--------------------------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWLRF) announced Friday that it
expects to hold its Annual General Meeting of Shareholders on
Monday, November 29, 2004, at 3:00 p.m. at the company's offices
located at Perryville Corporate Park, Clinton, New Jersey. A
Notice of Meeting and Proxy Statement will be mailed to the
company's shareholders prior to the meeting.



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

CEMIG: To Tap Deal Consultant This Week
---------------------------------------
Brazilian power company Cemig will choose a consulting firm this
week to evaluate the future of its telecom subsidiary Infovias,
Business News Americas reports, citing Cemig assistant financial
director Joao Batista Zolini Carneiro.

Six bidders are vying for the contract. Cemig has evaluated
technical proposals but has not yet evaluated the financial
proposals. The winning consultancy must evaluate the best
strategy for Infovias within 90 days. Based upon that
evaluation, Cemig will determine whether to sell the subsidiary
or possibly expand its interest in the company.

"Cemig needs [a telecom unit] but we need to see if it is
worthwhile. The consulting company is being commissioned to make
this decision," Carneiro said.

CONTACT: Companhia Energetica de Minas Gerais
         AV. Barbacenda 1200
         Bello Horizonte MG
         30161-970
         Brazil
         Web Site: http://cemig.infoinvest.com.br/?language=enu


CSN: Fitch Rates $200M, 10-year Issuance 'B+'
---------------------------------------------
Fitch Ratings has assigned a 'B+,' foreign currency rating to
Companhia Siderurgica Nacional's (CSN) US$200 million 10-year
notes due January 2015 issued through its subsidiary CSN Islands
IX Corp. on September 24, 2004. CSN's foreign currency rating is
constrained by the Federative Republic of Brazil's 'B+,' foreign
currency rating. Fitch affirms CSN's local currency rating of
'BBB-' as well as the company's national scale rating of 'AA-
(bra)'. The Rating Outlook for all the ratings is Stable.

In 2003, CSN generated EBITDA of BRL2.8 billion. In 2004, Fitch
expects CSN to generate EBITDA of approximately BRL4.0 billion
(about US$1.3 billion) due to the strong steel price environment
and an improved value-added product mix. As of June 30, 2004 CSN
had total debt of BRL8.8 billion and net debt of BRL6.2 billion.
Due to the company's strong cash flow generation, the ratings
consider an expected decrease in net debt to less than BRL 5.0
billion by year-end 2004. The proceeds of this US$200 million
issuance will be used primarily to refinance upcoming debt
obligations. For 2004, Fitch expects CSN to have a net debt-to-
EBITDA ratio of less than 1.5 times (x) and a total debt-to-
EBITDA ratio of less than 2.0x.

Although Fitch expects CSN to reduce its net debt by about
BRL1.0 billion by year-end 2004, further material decreases are
not expected. Over the next several years, debt reduction will
be constrained by management's view of its optimal capital
structure, the company's capital expenditure plans and the debt-
service requirements of CSN's controlling shareholder, Vicunha
Siderurgia S.A. (Vicunha). Vicunha has a 46.5% stake in CSN but
no operating assets to generate cash flow. Although CSN is not
obligated to directly service Vicunha's debt, CSN paid dividends
of BRL800 million in 2003 to allow Vicunha to make interest and
principal payments of approximately BRL350 million on its
debentures. In June 2004, CSN paid dividends of about BRL750
million. In order for Vicunha to continue meeting its debenture
obligations, CSN expects its dividend payment to be about BRL900
million in 2005.

CSN's ratings are supported by the company's position as one of
the industry's lowest cost steel producers. CSN's low-cost
structure is due primarily to its ownership of the Casa de Pedra
mine, one of the world's largest high-quality iron ore bodies.
The company also benefits from its modern production facilities,
vertical integration and access to low-cost labor. These factors
allow CSN to generate positive cash flows during troughs in the
steel cycle and economic downturns in Brazil. The ratings also
consider the concentrated nature of the Brazilian steel
industry, which limits competition based solely upon price.
Competition from foreign steel imports into Brazil is minimal.
Barriers to entry include the logistical challenges of
transporting steel to Brazil and within Brazil, as foreign steel
producers have limited access to efficient distribution
networks. In addition, foreign steel imports face tariffs of
approximately 15%.

Over the past several years, CSN has focused on modernizing and
expanding its production facilities and divesting its noncore
assets. The company's current expansion strategy involves a
capital investment plan of up to US$780 million between 2004 and
2006. The project includes a US$310 million expansion of the
production capacity of the Casa de Pedra iron ore mine to 40
million tons from 14 million tons by mid-2006. In order to
export the increased iron ore production, CSN will also invest
about US$130 million to expand the Sepetiba port where it
currently operates a coal terminal under an exclusive concession
agreement expiring in 2047. The project may also include a
US$340 million investment to construct a 6.0 million-ton pellet
plant. When the mine expansion is concluded in 2006, the iron
ore export sales are expected to yield approximately US$400
million in incremental EBITDA.

Fitch Ratings believes the mine expansion project makes
strategic sense given the current pricing environment for iron
ore and the positive outlook for demand over the near to medium
term. Iron ore prices rose by about 9% in 2003 and by about 18%
in 2004. These price increases, along with those of several
other commodities, have been driven by the confluence of an
improving global economy and China's surging demand for raw
materials. Although this expected incremental cash flow from the
iron ore mine expansion is significant, CSN's credit quality
will continue to be closely linked to the performance of its
steel business as approximately 80% of the company's future cash
flow will be generated from its steel production operations.

CSN has an annual crude steel production capacity of 5.8 million
tons. Its fully integrated steel operations, located in the
state of Rio de Janeiro in Brazil, produce steel slabs and hot-
and cold-rolled coils and sheets for the automobile,
construction and appliance industries, among others. CSN also
holds leading market shares in the galvanized and tin-mill
products.


VASP: Regulator Grounds Six Aircraft
------------------------------------
Brazil's fourth-largest carrier Viacao Aerea Sao Paulo SA (Vasp)
was forced to suspend about 70% of its flights over the past
days after the country's aviation authority ordered six aircraft
to be grounded due to poor maintenance, reports Bloomberg.
According to the Commercial Aviation Department, the six Boeing
737-200 aircraft can only fly again after Vasp carries out
maintenance work specified by the manufacturer.

"The situation is critical," said Graziella Baggio, president of
the country's flight attendants and pilot union. "The company's
fleet is considered geriatric and it doesn't have money to
replace the aircraft."

Vasp saw its revenue fall 17% in the first quarter of the year
to BRL298 million from the same period a year earlier. The
company's losses nearly tripled in the first quarter to BRL25.8
million, the regulator said.



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

ROYAL SHELL: Negotiating Sale of InterGen
-----------------------------------------
In an effort to bring in some much-needed cash to fund vital
upstream capital expenditure over the next few years, Anglo-
Dutch oil company Royal Shell is selling InterGen, its under-
performing joint venture with US engineering company Bechtel.

Citing a banking source close to the deal, Business News
Americas reports that Shell and Bechtel are looking to sell
InterGen for some US$6 billion, including debt. Shell and
Bechtel are reportedly talking to prospective buyers already and
will start the sale process in October.

InterGen is a global power generation firm, operating or
building a total of 20 power stations representing over 16,000
megawatts (MW). It has projects operating, under construction or
in active development in the United States, the United Kingdom,
the Philippines, Mexico, Colombia, China, Egypt, Turkey,
Australia, the Netherlands, Spain, Germany, and Singapore.

In Mexico, InterGen owns the 1,065MW La Rosita natural gas-fired
power plant in Baja California state, and earlier this month
agreed to sell a 24.5% interest share in the 600MW BajĦo natural
gas-fired power plant in Guanajuato state to Japanese gas
distributor Tokyo Gas. After the sale, Intergen will maintain a
25.5% interest in the plant.

In Colombia, Intergen owns 54% of the 265MW Termoemcali
thermoelectric plant. Colombia's Cali-based multi-utility Emcali
owns the rest.


* COLOMBIA: Secures $100M World Bank Loan
-----------------------------------------
The World Bank today approved a $100 million loan for Colombia
to support the second phase of a program that seeks to
strengthen Colombia's financial system and increase its capacity
to fund future investment in the economy.

"Strengthening the financial system and using norms aligned to
international standards will attract greater domestic and
foreign investment and increase the availability of financing,"
said Isabel Guerrero, World Bank Director for Colombia and
Mexico. "A strong financial system is key for increased
competitiveness, higher productivity and job creation."

The Second Programmatic Financial Sector Adjustment Loan will
support the modernization of bank, non-bank and securities
market norms on capital adequacy; and strengthen the ability of
financial market participants to absorb market and credit risks,
as well as macroeconomic shocks.

The program will benefit savers, consumers, borrowers,
investors, homeowners, small and medium enterprises, and larger
businesses. In addition, taxpayers will benefit from the reduced
risks of financial institutions failures that could generate
fiscal costs.

The program will:

- Follow up on the reforms initiated in the first phase with
respect to the implementation of a stricter banking regulatory
framework, addressing the increased allocation of capital for
credit and market risks as well as the enforcement of governance
responsibilities.

- Support mechanisms to increase micro housing credit, and new
instruments for guaranteeing collateral to provide lending
incentives to the banking sector.

- Modernize risk management norms in thenon-bank sector of
mutual funds, trusts and pension funds through the
implementation of uniform solvency capital margin rules, and
harmonization in reporting of investment portfolio returns.

- Support implementation of the new capital markets law (Law
795-2003) to raise standards for professional qualifications and
governance in the securities business, while improving and
lowering the cost of the market's operating infrastructure.

"The improved operation and management of risks in the financial
services industry will help all Colombians to improve their
prospects for productive investments, broaden the scope of
access to such services, and reduce the sector's vulnerability
to economic shocks," said John Pollner, World Bank task manager
for the project.

The $100 million, fixed-spread loan from the International Bank
for Reconstruction and Development (IBRD) is repayable in 12
years, and includes a grace period of 10 years.

The Second Programmatic Financial Sector Adjustment Loan builds
on the $150 million first phase of the program approved on
April, 2003, which has fostered stabilization and contributed to
improvements in the country's financial system.

CONTACTS: Ms. Gabriela Aguilar
          Phone: (5255) 5480-4200
          e-mail: Gaguilar2@worldbank.org

          Ms. Alejandra Viveros
          Phone: (202) 473-4306
          e-mail: Aviveros@worldbank.org

          Web Site: http://www.worldbank.org/co



===============
H O N D U R A S
===============

* HONDURAS: IMF Completes Review of $104.3M PRGF Arrangement
------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
completed Friday the first review of Honduras' performance and
the financing assurances review under a SDR 71.2 million (about
US$104.3 million) three-year Poverty Reduction and Growth
Facility (PRGF) arrangement approved in principle on February
18, 2004 and effective since February 27, 2004. The completion
of this review allows Honduras to draw a further SDR 10.17
million (about US$14.9 million), bringing the total amount
released under the arrangement to SDR 20.34 million (about
US$29.8 million). In completing the review, the Board waived the
nonobservance of the performance criteria related to the
approval of a package of financial sector laws before June 30.

Following the Executive Board discussion on Honduras, Agustin
Carstens, Deputy Managing Director and Acting Chair, said:

"Honduras's performance under the PRGF arrangement has been
strong. The economic recovery is gathering pace; the external
position has strengthened, notwithstanding the impact of high
oil prices; and anti-poverty spending has begun to rise. These
favorable early results under difficult circumstances testify to
the authorities' resolve in implementing their program and augur
well for the economic outlook. It is now critical to build on
these achievements to consolidate the hard-won stabilization and
reform gains.

"The government's commitment to social consensus has played an
important role in maintaining domestic support for the program-
which has remained strong across a wide spectrum of society.
Congressional support for reform has been a key and welcome
element in the success of the program to date.

"Continued implementation of sound fiscal policies will be
essential to sustaining the success of the program. In
particular, this will require enactment of a 2005 budget that is
in line with the program, followed by steadfast implementation
of the budget in the course of the year. The support of congress
in refraining from any unfinanced appropriations will play a
vital role in this regard.

"Adherence to the revised teachers' wage agreement reached in
July 2004 will be essential to the success of the program, and
the development of a permanent teachers' wage policy is key to
medium-term fiscal sustainability. Moreover, wage policy in
other parts of the public sector will also need to remain
consistent with the program.

"The central bank has sent a clear signal of its determination
to preserve the important gains made in reducing inflation in
recent years. Its plans for modernizing monetary operations are
welcome, in particular, by strengthening monetary instruments
and improving interest rate signaling. Successful implementation
of these reforms will allow a progressive strengthening of the
monetary policy framework.

"The four financial sector laws recently approved by congress
are significant milestones in addressing the weaknesses of the
banking system. It is important that the new framework be
implemented fully, as planned. Progress in financial sector
reform is one of the trigger conditions for achieving the
completion point under the enhanced HIPC Initiative-which
Honduras aims to reach in early 2005.

"Other institutional reforms are also moving ahead. The
important political and judicial reforms under way will
contribute to reducing perceptions of corruption and improving
the investment climate.

"Overall, Honduras's satisfactory performance under the PRGF
arrangement is commendable. Continued implementation of the
authorities' program should lay a strong foundation for durable
growth and poverty reduction," Mr. Carstens said.

CONTACT: International Monetary Fund
         External Relations Department
         700 19th Street, NW
         Washington, D.C. 20431
         USA

         Public Affairs
         Phone: 202-623-7300
         Fax: 202-623-6278

         Media Relations
         Phone: 202-623-7100
         Fax: 202-623-6772



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

EMPRESAS ICA: Joint Venture Inks $134M Pemex Deal
-------------------------------------------------
ICA Fluor, the industrial engineering and construction company
jointly owned by Fluor Corporation (NYSE: FLR) and Empresas ICA
Sociedad Controladora (NYSE: ICA), announced Friday the signing
of a contract for the engineering, procurement, construction and
start-up support services for a modular cryogenic plant and a
fuel terminal for Pemex Gas y Petroquimica Basica. The total
contract value is $134 million.

Located in Reynosa, Tamaulipas, Mexico, the cryogenic plant,
which will have a 200 million standard cubic feet-per-day
capacity, 98 percent propane recovery, will cool feed gas so
that liquid hydrocarbons can be separated and recovered. The
consortium formed by ICA Fluor and Linde Process Plants Inc.
will develop the project, which is scheduled to be completed in
approximately 20 months.

"This project offers to our client a design which minimizes gas
consumption and the use of a compact Liquid Recovery Unit with
low-pressure drops and energy conservation," said Jorge Borja,
ICA Fluor general director. "The project confirms ICA Fluor's
passion to provide its clients cost-effective solutions focused
on efficiency and environmental protection."

Pemex Gas y Petroquimica Basica is a subsidiary of Pemex, the
Mexican state-owned petroleum company.

ICA Fluor is the leading industrial engineering company in
Mexico, dedicated to the engineering, procurement, construction
and maintenance of industrial facilities in the oil and gas,
chemical, petrochemical, automotive, electricity, mining and
telecommunications industries.

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

Fluor Corporation (NYSE: FLR) provides services on a global
basis in the fields of engineering, procurement, construction,
operations, maintenance and project management. Headquartered in
Aliso Viejo, Calif., Fluor is a FORTUNE 500 company with
revenues of nearly $9 billion in 2003.

CONTACTS: Empresas ICA Sociedad Controladora S.A. de C.V.
          Col. Escandon Del Migual Hidalgo
          Mexico City
          11800
          Mexico
          Phone: 525-272-9991
          Website: http://www.ica.com.mx/

          Fluor Corporation
          One Enterprise Drive
          Aliso Viejo, CA 92656-2606
          Phone: 949.349.2000
          Fax: 949.349.2585
          Media relations:
          Mr. Jerry Holloway
          Phone: +1-949- 349-7411
            Or
          Ms. Leann Vandergrift
          Phone: +1-949-349-7420
            Or
          Investor relations
          Ms. Lila Churney
          Phone: +1-949-349-3909
          Fax: +1-949-349-5375

          Web Site:  http://www.fluor.com/


GRUPO IUSACELL: Utilizing Lucent to Upgrade Network
---------------------------------------------------
Grupo Iusacell, S.A. de C.V. (NYSE: CEL; BMV CEL) announces an
agreement with Lucent Technologies (NYSE: LU) to expand its
third generation network, 3G CDMA.

With this expansion in coverage and capability, Iusacell will be
able to handle the increased network traffic resulting from both
the growth in its client base, as well as the increase in data
transfer generated by the introduction of its new "3-G Iusacell"
high-speed services, which were announced last month. This
service includes:

1. Mobile Internet access
2. Download of ringtones and sophisticated games
3. Email account access
4. Cellular "Chat"
5. Sending and receiving of photos and videos

Lucent Technologies will provide software and equipment for the
expansion in coverage and capability in the majority of the
regions where Iusacell operates its 3G CDMA network, which will
support increased and improved voice and data communication
services.

In addition, this project includes network updates, a network
security platform, and all related services.

Lucent Worldwide Services (LWS) will be in charge of installing
and maintaining the network.

"We are very excited to be able to work with Iusacell on the new
expansion of their 3G network after successfully completing the
launch of the first phase of this advanced, high-velocity voice
and data network," states Osvaldo di Campli, Lucent's Regional
Vice President for Mexico, Central America, and the Caribbean.
"This expansion will include the most advanced equipment for
mobile networks, protecting Iusacell's investment by allowing
the company to immediately offer CDMA2000 1X services, and
supporting the future evolution of the most advanced CDMA2000
solutions, such as 1xEV-DO and 1xEV-DV."

"With the expansion of our CDMA 2000 1X network, Iusacell will
increase its advanced data services offerings," said Gustavo
Guzman, General Director of Iusacell. "This expansion allows
Iusacell to offer its users Third Generation services,
positioning it as the leading technology cellular company in
Mexico. Iusacell's wide range of 3G services creates value for
our clients and improves their cellular experience, permitting
us to continue as one of the best cellular deals in the market.
We currently have entertainment applications, such as ringtone
downloading, sophisticated games, images, news, and the
reception of short videos. There are also new productivity tools
such as e-mail, wireless Internet access, mobile sales devices,
cellular "chat", and sending and receiving photos. This platform
will also support voice over IP applications like PTT, the basis
of the system that emulates trunking networks. With this
project, Iusacell strengthens its leadership and client
commitment by consistently offering the best leading edge
cellular services."

Iusacell is a wireless cellular and PCS service provider in
Mexico encompassing a total of approximately 92 million POPs,
representing approximately 90% of the country's total
population.

Independent of the negotiations toward the restructuring of its
debt, Iusacell reinforces its commitment with customers,
employees and suppliers and guarantees the highest quality
standards in its daily operations offering more and better voice
communication and data services through state-of-the-art
technology, such as its new 3G network, throughout all of the
regions in which it operate.

Lucent Technologies designs and delivers the systems, services
and software that drive next-generation communications networks.
Backed by Bell Labs research and development, Lucent uses its
strengths in mobility, optical, software, data and voice
networking technologies, as well as services, to create new
revenue-generating opportunities for its customers, while
enabling them to quickly deploy and better manage their
networks. Lucent's customer base includes communications service
providers, governments and enterprises worldwide.

CONTACT: Grupo Iusacell S.A de C.V.
         Prolongacion Paseo de la Reforma 1236
         Colonia Santa Fe
         Delegacion Cuajimalpa
         Mexico
         Phone: 011-525-109-5754
         Web Site: http://www.iusacell.com.mx/


VITRO: Unit Takes Out $230M Credit To Pay Down Debt
---------------------------------------------------
Vitro Envases Norteamericana, the Glass Containers division of
Mexican glass maker Vitro, took out a credit for US$230 million,
reports Reuters. In a statement, Vitro said the unit will use
the funds to pay liabilities of the holding company.

Vitro S.A. de C.V. (BMV: VITROA; NYSE: VTO), which makes a range
of glass for the auto, bottling and construction industries and
also glassware, said the credit falls due in 2006.

CONTACT: Investor Relations
         Ms. Beatriz Martinez
         Investor Relations Manager
         bemartinez@vitro.com
         Tel: +52 (81) 8863 1258

         Corporate Office
         Av. Ricardo Margain 440
         Col. Valle del Campestre,
         Garza Garc­a, Nuevo Le›n
         C.P.66265 M,xico
         Tel: (52) 8863-1200

         Web Site: www.vitro.com



=============
U R U G U A Y
=============

PLUNA: British Fund Offers to Buy Varig's Stake
-----------------------------------------------
The British investment fund Ashmore Funds has expressed an
interest in acquiring Brazilian air transportation company
Varig's stake in Uruguayan airline Pluna. According to an El
Pais report, Ashmore made an offer for Varig's stake in Pluna
even though Varig has not shown any interest in selling its
ownership. Varig owns 49% of Pluna and the Uruguayan government
holds the remaining 51%.



                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
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Copyright 2004.  All rights reserved.  ISSN 1529-2746.

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