TCRLA_Public/041007.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

          Thursday, October 7, 2004, Vol. 5, Issue 199

                            Headlines

A R G E N T I N A

AGRUPEV S.A.: Court Allows Creditor's Bankruptcy Petition
AOL LATIN AMERICA: Issues Preferred Stock to Time Warner
AOL LATIN AMERICA: Names Paulo Moledo as Controller
ASOCIACION CIVIL: Validation Period Nears End
FARMACEUTICOS ARGENTINOS: Reports Submission Set

FRANCISCO PROBANZA: Court Sets New Submission Deadlines
GAS TRELEW: Trustee to Close Verification Period
HIDROELECTRICA EL CHOCON: $140M of Bonds Get `C' Rating
IMAGEN SATELITAL: Fitch Retains Bonds' Default Ratings
MARCOS MARTINI: Creditors to Vote on Settlement Plan Tomorrow

METROGAS: Extends Debt Offer Deadline; Grants Withdrawal Rights
MULTICANAL: Court Affirms Acuerdo Preventivo Extrajudicial
PACIWAY: Claims Check Ends Tomorrow
PERSA DE CAPITALIZACION: Initiates Bankruptcy Proceedings
POLIPEL S.A.: Court Opens Liquidation Process

REPSOL YPF: Improves Debt Structure, Lowers Financial Costs
QUEMAG S.A.: Court Declares Company Bankrupt
TERBON S.A.: Reorganization Concluded
TGS: Rating Not Affected by Debt Restructuring Proposal
TRI-ECO S.A.: Reports Submission Set

TURBINE POWER: Moody's Maintains `D' Rating on $20M of Bonds
VANGUARDIA SEGURIDAD: Gets Court Ok for Reorganization
* Argentina Won't Back Down on Debt Restructuring Offer


B E R M U D A

LINES OVERSEAS: Auditor Can't Form Opinion on 2003 Figures


B O L I V I A

HIDROELECTRICA BOLIVIANA: Likely to Enter Default


B R A Z I L

CEMIG: Announces New Board Resolutions
CEMIG: Pays Fractional Amounts From Bonus
GERDAU: Files Prospectus for Common Shares Offering


C O S T A   R I C A

ICE: To Initiate Probe on Tendering Processes


J A M A I C A

AIR JAMAICA: Unveils Restructuring Plan


M E X I C O

AXTEL: Inks Telephony Services Deal With Nortel Networks
CFE: Struggles to Fend Off Labor Lawsuits
PLIANT CORP.: S&P Places Ratings On Watch Negative
TV AZTECA: SEC Issues "Wells Notice" To Company, Executives


V E N E Z U E L A

PDVSA: To Continue Cooperation Talks With Petropar Next Week

     -  -  -  -  -  -  -  -


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

AGRUPEV S.A.: Court Allows Creditor's Bankruptcy Petition
---------------------------------------------------------
Mr. Walter Furlaneto successfully pursued the bankruptcy of
Agrupev S.A. after Judge Fernandez of Buenos Aires' civil and
commercial tribunal court no. 19 declared the Company "Quiebra,"
reports La Nacion. The creditor sought for the Company's
bankruptcy after the latter failed to pay debts amounting to
US$1,265.70.

As such, the medical services company will now start the
bankruptcy process with Mr. Luis Kurklis as trustee. Creditors
of the Company must submit their proofs of claim to the trustee
before November 12 for authentication. Failure to do so will
mean a disqualification from the payments made after the
Company's assets are liquidated.

Dr. Johnson, clerk no.38, assists the court on the case, which
will culminate in the liquidation of all of its assets.

CONTACT: Agrupev S.A.
         Vidt 2047
         Buenos Aires

         Mr. Luis Kurklis, Trustee
         Lavalle 1819
         Buenos Aires


AOL LATIN AMERICA: Issues Preferred Stock to Time Warner
--------------------------------------------------------
On September 30, 2004, America Online Latin America, Inc.
("AOLA") issued 10,304,678 shares of series B redeemable
convertible preferred stock ("series B preferred stock") with an
aggregate liquidation preference of approximately $28.1 million
to Time Warner Inc. in payment of approximately $4.4 million of
interest due on senior convertible notes outstanding for the
period from July 1, 2004 to September 30, 2004.

Shares of series B preferred stock are convertible into shares
of AOLA's class B common stock, $.01 par value per share, which
can be converted into AOLA's class A common stock, $.01 par
value per share, at any time on a one-for-one basis.

The offer and sale of the series B preferred stock was made in
reliance upon an exemption from the registration provisions of
the Securities Act of 1933, as amended (the "Securities Act"),
as set forth in Section 4(2) relating to sales by an issuer not
involving any public offering or the rules and regulations
thereunder.

The offer and sale was made only to "accredited investors" as
such term is defined in Regulation D under the Securities Act
and AOLA did not engage in any general solicitation or make any
advertisement with respect to the offer and sale of the series B
preferred stock. All of the senior convertible notes sold in the
private placement are restricted securities for purposes of the
Securities Act.

CONTACT: America Online Latin America, Inc.
         6600 N. Andrews Ave.
         Suite 500
         Fort Lauderdale, FL 33309
         USA
         Phone: 954-229-2100


AOL LATIN AMERICA: Names Paulo Moledo as Controller
---------------------------------------------------
Effective October 1, 2004, Milton P. Brice has resigned as
Controller nd Treasurer of AOLA to pursue another business
opportunity. Paulo oledo, AOLA's Director of Business Planning,
has been promoted to Controller and Treasurer and will serve as
AOLA's Principal Accounting Officer.

Mr. Moledo has been with AOLA since August 1999. Prior to AOLA,
Mr. Oledo held the position of Director of Financial Planning
for Revlon Latin America for one year and six months. Prior to
his position with Revlon, Mr. Moledo spent two years with
PepsiCo Restaurants Brazil as Treasurer and Manager of Financial
Planning. Mr. Moledo began his career, and spent six years, in
the areas of Business Planning and Accounting with Ford Brazil.
Mr. Moledo holds an MBA from the University of Miami.

CONTACT: America Online Latin America, Inc.
         6600 N. Andrews Ave.
         Suite 500
         Fort Lauderdale, FL 33309
         USA
         Phone: 954-229-2100


ASOCIACION CIVIL: Validation Period Nears End
---------------------------------------------
Creditors of bankrupt Asociacion Civil Foro de la Seguridad
Social Argentina have until tomorrow to submit proof of their
claims for verification. All relevant documents must be
forwarded to court-appointed trustee Jorge David Jalfin by the
said deadline to qualify for any distributions to be made after
the liquidation.

CONTACT: Mr. Jorge David Jalfin, Trustee
         Sarmiento 1452
         Buenos Aires


FARMACEUTICOS ARGENTINOS: Reports Submission Set
------------------------------------------------
Accounting firm "Estudio Lopez, Santiso, Villar", the trustee
assigned to supervise the liquidation of Farmaceuticos
Argentinos S.A., will submit validated individual claims for
court approval on February 14, 2005. These reports explain the
basis for the accepted and rejected claims. The firm will also
submit a general report on March 30, 2005.

Infobae reports that the Company is scheduled to present a
completed settlement to its creditors during the informative
assembly on August 31, 2005.

Court no. 6 of Buenos Aires' civil and commercial tribunal has
jurisdiction over this bankruptcy case. Clerk no. 12 assists the
court with the proceedings.

CONTACT: "Estudio Lopez, Santiso, Villar"
         Trustee
         Florida 234
         Buenos Aires


FRANCISCO PROBANZA: Court Sets New Submission Deadlines
-------------------------------------------------------
Court no. 1 of Olavarria's civil and commercial tribunal moved
key events in the Francisco Probanza e Hijos S.H. bankruptcy
case to these dates:

1. Verification of Creditors' Claims Deadline - October 22, 2004
2. Submission of Individual Reports - December 3, 2004
3. Submission of the General Report - February 16, 2005

Infobae reports that local accounting firm "Estudio Galarza,
Barresi, Iturralde" serves on this case as trustee.

CONTACT: "Estudio Galarza, Barresi, Iturralde"
         Trustee
         Alsina 3456
         Olavarria


GAS TRELEW: Trustee to Close Verification Period
------------------------------------------------
Accounting firm "Estudio Rodriguez Martorelli, Demarchi y
Asociados" is set to close the verification of claims for the
Gas Trelew S.A. bankruptcy case tomorrow. Creditors are required
to submit proof of their claims to the trustee before the
deadline in order to be included in the Company's settlement
proposal.

CONTACT: Gas Trelew S.A.
         Cerrito 146
         Parque Industrial Trelew
         Chubut

         Estudio Rodriguez Martorelli, Demarchi y Asociados
         Trustee
         Sarmiento 1452
         Chubut


HIDROELECTRICA EL CHOCON: $140M of Bonds Get `C' Rating
-------------------------------------------------------
Moody's Latin America Calificadora de Riesgo S.A. maintained the
`C' rating given to corporate bonds issued by Argentine company
Hidroelectrica El Chocon S.A., according to data revealed by the
Comision Nacional de Valores (CNV), Argentina's securities
regulator.

The bonds, worth US$140 million, were issued under "Simple
Issue" and described as "Obligaciones Negociables." These bonds
matured on Feb. 19, 2004. The rating action was taken based on
the Company's financial health as of June 30, 2004.

Bonds with a `C' rating are of poor standing, says Moody's. Such
issues may be in default, or there may be elements of danger
with respect to principal or interest.


IMAGEN SATELITAL: Fitch Retains Bonds' Default Ratings
------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintains a default
rating on Imagen Satelital S.A.'s corporate bonds called
"obligaciones negociables". Fitch retains a junk rating on the
bonds based on the Company's financial status as of June 30,
2004.

The CNV indicated that Fitch maintained a `D(arg)' rating on the
bonds worth a total of US$80 million. The bonds, whose maturity
date was not disclosed, were classified as "Simple Issue". Fitch
retains a junk rating on the bonds based on the Company's
financial status as of June 30, 2004.


MARCOS MARTINI: Creditors to Vote on Settlement Plan Tomorrow
-------------------------------------------------------------
The reorganization of Moron-based Marcos Martini S.A. nears its
conclusion as creditors vote to ratify the completed settlement
plan during the informative assembly tomorrow. If the plan
acquires the required the number of votes from creditors, the
civil and commercial tribunal of Moron will move to approve the
plan for implementation.

Accounting firm "Estudio Fernandez, Miro y Dazza" oversees the
Company's reorganization proceedings as trustee.

CONTACT: Marcos Martini S.A.
         Luis Pasteur 2874
         Castelar Partido de Moron

         "Estudio Fernandez, Miro y Dazza"
         Trustee
         San Martin 131
         Moron


METROGAS: Extends Debt Offer Deadline; Grants Withdrawal Rights
---------------------------------------------------------------
MetroGAS S.A. (the "Company") announced Monday that it is
further extending its solicitation (the "APE Solicitation") from
holders of its 9-7/8% Series A Notes due 2003 (the "Series A
Notes"), its 7.375% Series B Notes due 2002 (the "Series B
Notes") and its Floating Rate Series C Notes due 2004 (the
"Series C Notes" and, together with the Series A Notes and the
Series B Notes, the "Existing Notes") and its other unsecured
financial indebtedness (the "Existing Bank Debt" and, together
with the Existing Notes, the "Existing Debt"), subject to
certain eligibility requirements, of powers of attorney
authorizing the execution on behalf of the holders of its
Existing Notes of, and support agreements committing holders of
its Existing Bank Debt to, execute an acuerdo preventivo
extrajudicial (the "APE") until 5:00 p.m., New York City time,
on October 19, 2004 (the "New Expiration Date"), unless further
extended by the Company.

APE Solicitation

As of 5:00 p.m., New York City time, on October 1, 2004, powers
of attorney and support agreements had been received with
respect to approximately U.S.$ 101,668,000 principal amount of
Existing Debt.

The APE Solicitation will remain in all respects subject to all
terms and conditions described in the Company's Solicitation
Statement dated November 7, 2003 except that any person that has
granted a power of attorney and tendered its Existing Notes to
the Settlement Agent or has executed a support agreement with
the Settlement Agent with respect to its Existing Bank Debt
shall have the right to withdraw such power of attorney and
Existing Notes or be released from its obligations under such
support agreement until 5:00 p.m., New York City time, on the
New Expiration Date. Any person wishing to exercise such
withdrawal rights should communicate with the Information Agent
to be informed of the appropriate procedure.

The Information Agent for the APE Solicitation outside Argentina
is GBR Information Services and its telephone number is
(212) 644-1772. The Information Agent within Argentina is JP
Morgan Chase Bank Buenos Aires Branch and its telephone number
is 5411-4348-3475/4325-8046.

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

          Citigate Financial Intelligence
          Lucia Domville
          E-mail: Lucia.Domville@citigatefi.com
          Tel: 201-499-3548


MULTICANAL: Court Affirms Acuerdo Preventivo Extrajudicial
----------------------------------------------------------
Mr. Martin G. Rios, Multicanal's Market Relations officer,
informed the
Buenos Aires Stock Exchange that Argentina's Court of Commercial
Appeals, Chamber "A," has approved its debt restructuring offer,
rejecting the final local objections to the US$509 million debt
exchange.

Multicanal pursued an out-of-court restructuring plan known as
an APE, in which two-thirds creditor agreement allows an offer
to be submitted to the courts for legal approval. The final
clearance from the judge makes the repayment terms binding on
all creditors.

However, Multicanal still needs to resolve a legal tangle over
its debt restructuring in U.S. courts. A bankruptcy judge in the
U.S. District Court for the Southern District of New York ruled
in late August that Multicanal's APE could be recognized in the
U.S. if the company remedied "discrimination against U.S. retail
noteholders" within 30 days.

New Jersey investment fund W.R. Huff, Multicanal's main holdout
creditor, and two other bondholders had filed an involuntary
petition against the cable company. The creditors had also
sought to dismiss Multicanal's Section 304 petition, which
allows foreign debtors to ask a court to stay actions against
companies or assets in the U.S.


PACIWAY: Claims Check Ends Tomorrow
-----------------------------------
The validation of creditors claims against Paciway Company S.A.
is set to end tomorrow. Creditors must submit proof of the
indebtedness to court-appointed trustee Jaime Luis Jeiman by the
said deadline in order to be included on the list of creditors
covered by the Company's restructuring plan.

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

Court No. 9 of Buenos Aires' Civil and Commercial Tribunal has
jurisdiction over this case.

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

         Mr. Jaime Luis Jeiman, Trustee
         Lavalle 1312
         Buenos Aires


PERSA DE CAPITALIZACION: Initiates Bankruptcy Proceedings
---------------------------------------------------------
Court no. 4 of Bahia Blanca's civil and commercial tribunal
declared local company Persa de Capitalizacion y Ahorro S.A.
"Quiebra," reports Infobae. Clerk no. 8 assists the court on the
case that which will close with the liquidation of the Company's
assets to repay creditors.

Mr. Daniel Alberto Zukerman, who has been appointed as trustee,
will verify creditors' claims until November 29, 2004.

CONTACT: Persa de Capitalizacion y Ahorro S.A.
         Moreno 9
         Bahia Blanca

         Mr. Daniel Alberto Zukerman, Trustee
         Rodriguez 118
         Bahia Blanca


POLIPEL S.A.: Court Opens Liquidation Process
---------------------------------------------
Buenos Aires-based Polipel S.A. enters bankruptcy after Court
no. 26 of the city's civil and commercial tribunal ordered the
Company's liquidation. The announcement, posted on local news
source Infobae, did not reveal the name of the trustee who will
handle the proceedings nor the schedules for the submission of
required documents.

CONTACT: Polipel S.A.
         Lavalle 1634
         Buenos Aires


REPSOL YPF: Improves Debt Structure, Lowers Financial Costs
-----------------------------------------------------------
Repsol YPF, via its Repsol International Finance BV unit,
completed within 48 hours, and with an ample oversubscription,
the issue of 1.0 billion euros in 10-year bonds.

With this issue, which has a 4.625% coupon, Repsol YPF has taken
advantage of improved market conditions to anticipate the
amortization of debt that was scheduled to mature in July and
August 2005, and which had coupons of 7.45% and 7.0%,
respectively.

The strong reduction in debt undertaken by the Company in recent
months, together with its solid financial position, allowed
Repsol YPF to issue the bonds with a very tight spread versus
market references (mid-swap +57 basic points).

The banks participating in this bond issue were La Caixa, BBVA,
BNP Paribas, Citigroup, Merrill Lynch and SCH.

Repsol YPF's net debt as of June 30, 2004 was 5.597 billion
euros, versus 6.424 billion euros at the end of June 2003.
Repsol YPF's debt ratio has been reduced from 25.9% at the end
of the first half of 2003, to 22.6% for the same period in 2004.

CONTACT: Repsol YPF, S.A.
         Paseo de la Castellana 278
         Madrid, 28046
         Spain

         Phone: 34-1-348-8100
         Website: http://www.repsol.com/


QUEMAG S.A.: Court Declares Company Bankrupt
--------------------------------------------
Judge Paez Castaneda, serving Court no. 21 of Buenos Aires'
civil and commercial tribunal, declared local company Quemag
S.A. "Quiebra", relates La Nacion. Ms. Ines Gutierrez filed the
involuntary bankruptcy petition.

The Company will undergo the bankruptcy process with Ms. Silvana
Cirigliano as its trustee. Creditors are required to present
their proofs of claims to the trustee for verification before
November 1. Creditors who fail to have their claims
authenticated by the said date will be disqualified from the
payments that will be made after the Company's assets are
liquidated at the end of the bankruptcy process.

Dr. Rey, clerk no. 41, assists the court on the case.

CONTACT: Quemag S.A.
         San Jose 1741
         Buenos Aires

         Ms. Silvana Cirigliano, Trustee
         Viamonte 1348
         Buenos Aires


TERBON S.A.: Reorganization Concluded
-------------------------------------
The settlement plan proposed by Terbon S.A. for its creditors
acquired the number of votes necessary for confirmation. As
such, the plan has been endorsed by court no. 1 of Buenos Aires'
civil and commercial tribunal and will now be implemented by the
company.

Local accountant Mr. Mario Sogari supervised the Company's
reorganization as trustee.

CONTACT: Mr. Mario Sogari, Trustee
         Montevideo St. 734
         Buenos Aires


TGS: Rating Not Affected by Debt Restructuring Proposal
-------------------------------------------------------
Standard & Poor's Ratings Services said Tuesday it will closely
monitor the progress of Transportadora de Gas del Sur S.A.'s
(TGS; D/--/--) recently announced proposal to restructure about
US$ 1 billion of financial debt, and will reassess its rating on
the company once the restructuring is completed.

The proposed mechanism includes a cash payment equivalent to 11%
of the principal amount and an exchange of the remaining
existing notes for new obligations to be issued in two tranches
with different final maturity.

The proposal also includes the payment of accrued and unpaid
interests at the original rate of each instrument until December
2003 and at 6.18% from January 2004 until the exchange date. The
company has defined a minimum acceptance level of 96% of the
creditors for the proposal to be implemented as it is. Should
acceptance be lower, TGS said it would implement an out-of-court
agreement, or Acuerdo Preventivo Extrajudicial, including two
different alternatives depending on the level of acceptance
reached.

The company expects to fund cash payments with its cash
reserves, which, as of June. 30, 2004, reached about US$317
million.

About 50% of TGS' revenues are unregulated and derive from the
sale of liquids coming from natural gas processing. Although
this U.S. dollar-denominated revenue stream became more
significant after the devaluation of the Argentine peso, in
Standard & Poor's opinion, TGS' financial profile will continue
to heavily depend on the outcome of the renegotiation of its
concession contract, including, among other things, new tariff-
setting mechanisms and quality of service required. In addition,
the company is still facing the risk of operating in a rapidly
changing economic and regulatory environment, as evidenced in
the unresolved renegotiation of its concession contract, and
increasing risk of mandatory investments.

If the offer is successful, TGS will significantly extend its
maturity schedule and somewhat reduce its debt burden. If the
level of capital expenditures is maintained, TGS should be able
to face the first six years of resulting interest and
amortization with its current generation of US$180 million of
EBITDA after capital expenditures. However, in Standard & Poor's
opinion, the company will need to increase revenues longer term
or obtain other sources of refinancing to meet the requirements
of a growing debt service profile. Standard & Poor's will
closely monitor future developments on the restructuring and the
regulatory environment, and will reassess the rating once it is
completed.

PRIMARY CREDIT ANALYST:  Luciano Gremone, New York
(54) 11-4891-2143; Luciano_Gremone@standardandpoors.com

SECONDARY CREDIT ANALYST: Pablo Lutereau, Buenos Aires
(54) 114-891-2125; pablo_lutereau@standardandpoors.com


TRI-ECO S.A.: Reports Submission Set
------------------------------------
The validated individual claims from the Tri-Eco S.A.
reorganization case are due for court approval on December 16. A
general report will also be submitted on February 25 next year.
Infobae reports that local accountant Ms. Marcela Flora Pazos
supervises the Company's insolvency proceedings as the court-
appointed trustee. This case is under the jurisdiction of court
no. 5 of Buenos Aires' civil and commercial tribunal.

CONTACT: Mr. Marcela Flora Pazos, Trustee
         Montevideo 527
         Buenos Aires


TURBINE POWER: Moody's Maintains `D' Rating on $20M of Bonds
------------------------------------------------------------
Moody's Latin America Calificadora de Riesgo S.A. maintains a
`D' rating on some US$20 million worth of corporate bonds issued
by Turbine Power Company S.A. The rating action is based on the
Company's financial health as of June 30, 2004.

According to the CNV, the action affects bonds called
"obligaciones negociables garantizadas", which matured in
November 2002. The bonds were classified under "Simple Issue".


VANGUARDIA SEGURIDAD: Gets Court Ok for Reorganization
------------------------------------------------------
Vanguardia Seguridad Integral Empresaria y Privada S.A. begins
the reorganization process following the approval of its
petition by Court no. 8 of Buenos Aires' civil and commercial
tribunal, says Infobae. The opening of the reorganization will
allow the company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

CONTACT: Vanguardia Seguridad Integral Empresaria y Privada S.A.
         Luzuriaga 588
         Buenos Aires


* Argentina Won't Back Down on Debt Restructuring Offer
-------------------------------------------------------
Argentina will restructure its US$100 billion in defaulted
sovereign debt quickly and "without backing down," said
President Nestor Kirchner.

"You will see how in the near term we will resolve Argentina's
grave problems regarding the country's foreign debt," Reuters
quoted Kirchner as saying.

"We are working hard to achieve the response that our people
deserve, without backing down, without falling to our knees,"
Kirchner added.

The leader's comments came amid mounting opposition from foreign
and domestic investors. The Global Committee for Argentine Bonds
(GCAB) and the ADAPD - the largest Argentine bondholder
association - are threatening to block the said restructuring.

"We have the numbers to stop Argentine plans to impose debt
restructuring measures. If we fail to witness serious openings,
coupled with a willingness to negotiate, we will pursue all
actions, including legal," said the Co-Chairman of GCAB, Nicola
Stock, currently in Washington to discuss due measures with IMF
analysts.

The GCAB and the ADAPD, if joined, would reach the minimum
amount required for blocking the restructuring process, as has
already happened with the negotiation of the bonds of the
Argentinean Province of Mendoza, the Aconcagua bonds.

What they want is an improvement on the offer that the Argentine
Government will be presenting to the U.S. Securities and
Exchange Commission as early as next week.



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B E R M U D A
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LINES OVERSEAS: Auditor Can't Form Opinion on 2003 Figures
----------------------------------------------------------
PricewaterhouseCoopers, the auditor for Lines Overseas
Management, informed shareholders that it cannot form an opinion
on LOM's 2003 financial figures due to legal investigations and
inquiries, the Royal Gazette reports, citing David Marchant,
Editor of Offshore Alert.

Mr. Marchant has been following investigations of LOM being
conducted by the US Securities Exchange Commission and by
Deloitte & Touche on behalf of the Bermuda Monetary Authority.

In a July 13 letter to LOM shareholders, PricewaterhouseCoopers
said that while it conducted the audit of LOM's financial
statements in accordance with generally accepted standards, it
has been informed of "certain regulatory investigations and
enquiries" from which the company may "become liable to monetary
fines or other regulatory action."

"The Company's (LOM's) legal counsel has advised that full
access by us to all information would constitute a waiver of
attorney/client privilege and such a waiver is not in the
Company's best interests. Because of this we have been unable to
obtain sufficient appropriate audit evidence to form an opinion
with respect to the possible impact of any such matters on the
consolidated financial statements," the statement said.

"In view of the possible material effects of the matters to the
financial statements, and our inability to form an opinion with
respect to their effect thereon, we are unable to express an
opinion whether these financial statements present fairly the
financial position of the Company as at December 31, 2003 and
the results of its operations and its cash flows for the year
then ended in accordance with accounting principles generally
accepted in Bermuda and Canada."

CONTACT:  (Bermuda)
          LOM Group
          The LOM Building
          27 Reid Street
          Hamilton, HM 11
          Bermuda
          Telephone: (441) 292-5000
          Facsimile: (441) 295-3343



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

HIDROELECTRICA BOLIVIANA: Likely to Enter Default
-------------------------------------------------
Bolivian generator Hidroelectrica Boliviana (HB) is thinking of
getting into default, Business News Americas indicates, citing
an executive of the company.

"We are having some financial problems and we are at the point
where we are thinking about entering into default," Business
News Americas quoted Isabel Maldonado, the company's
administrative manager, as saying.

On October 1, HB failed to pay US$3.4 million in interest
corresponding to the seventh interest coupon on its US$65
million debt, prompting Bolivia's securities regulator to block
the company from issuing new bonds. In a statement, the
regulator said that the company can only issue new bonds after
it pays the interest or restructures its debt.

The company issued the US$65 million 12-year bonds at 10.5%
annual interest in April 2001 to finance the construction of new
plants. But the company couldn't keep up with the interest
payments.

In July, HB reached an agreement with Tenaska Capital Inc. and
Futuro de Bolivia AFP to repurchase the bonds at a market cost
of US$74 million and issue new bonds at half the interest rate
(5.25%), but the agreement fell through, Maldonado said.

The main problem, according to Maldonado, is that "drastic"
changes in the power sector regulations in 2002 have allowed
power prices to drop to US$6-8/MW - well below the US$14-16/MW
projected by HB in its revenue calculations. HB had projected a
cash flow of US$14 million a year, but now it is only seeing
about US$8mn-10mn, she said.

In addition, HB took its Chojlla Nueva plant out of operation
for a scheduled 10-day maintenance in June, which dragged on for
three and a half months and only re-started operations on
September 27.

Fitch rates HB's bonds D reflecting the nonpayment of the
interest installment on October 4.



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

CEMIG: Announces New Board Resolutions
--------------------------------------
The Board of Directors of Companhia Energetica de Minas Gerais
(Cemig), approved these proposals during the meeting held
September 29, 2004:

1. Bases for the signing of adherence agreements with Forluz,
arising from the "unbundling" (elimination of verticalization
organization) of the company.

2. Contracting of a law firm to file for an order of Mandamus
against Aneel to restore Cemig's tariff adjustment.

3. Contracting of Deloitte Touche Tohmatsu to provide services
of ratification of the revenues obtained from application of the
resolutions of Aneel.

4. Amendments to the Contract of Constitution of the Consortium
of the Aimores Hydroelectric Plant.

5. Contract, and amendments, with the Areva Itajuba Consortium,
formerly the Alstom Itajuba Consortium, for implementation of
the Itajuba 3 Substation.

6. Participation in Aneel Auction No. 002/2004.

7. Terms for the Company to participate in Aneel Auction No.
001/2004.

8. Revision of the Project for the Neves 3 Substation /
Construction.

9. Signing of undertaking for future partnership in part of the
bid for Aneel Auction No. 001/2004.

10. Signing of an amendment to the Contract for Implementation
of the Bom Despacho 3 Substation.

11. Contracting of services for recovery of reactors with ABB
Ltda.

12. Exchange of real estate properties in Juiz de Fora, Itajuba
and Patos de Minas.

13. Agreement with the members of the Igarapava consortium on
payment of transport of the electricity generated, losses in the
basic network and increase of "take".

14. Signing of a Convention Agreement with Incra, to serve land
allocation projects relating to the "Light for All" (Luz para
Todo s) Program.

15. The Protection Relay Replacement Program.

16. Contracting of security guard services for the Pai Joaquim
Small Hydroelectric Plant.

17. Provision of services of operation and maintenance of
government and installations of the Igarapava Hydroelectric
Plant /Signing of Contract and amendments.

18. Alteration in the Technology and Information Technology
Project.

19. Advance to the Barreiro S.A. Thermal Generating Plant
against future capital increase.

20. Private issue of nonconvertible debentures for subscription
by the State of Minas Gerais.

21. Renewal of the employees' and retirees' group life insurance
policy.

22. Raising of funds for rollover of debt.

23. Contracting of Deloitte Touche Tohmatsu to provide services
for assessment of the present internal controls environment and
planning of the activities necessary for obtaining of the
certification relating to Section 404 of the Sarbanes-Oxley Law.

24. Changes in the Vehicle Fleet Replacement Program.

25. Continuation of the negotiations with Petrobras on modeling
of economic optimization of the transaction to sell shares in
Gasmig.

26. Proposal for acquisition of the Rosal Hydroelectric Plant.

27. Waiver of the right on which court actions for recovery of
losses that occurred during the period of electricity rationing
are based.

CONTACT: Cemig - Companhia Energetica de Minas Gerais
         AV. Barbacenda 1200
         Bello Horizonte MG, 30161-970
         Brazil

         Fax (0XX31)3299-3934
         Phone: (0XX31)3299-4524


CEMIG: Pays Fractional Amounts From Bonus
-----------------------------------------
Companhia Energetica De Minas Gerais (Cemig), pursuant to the
minutes of the Extraordinary General Meetings of Stockholders
held on 30 April 2002, hereby advises its stockholders that the
fractional amounts arising from the bonus authorized by that
meeting have been conjoined and the resulting sale proceeds was
paid September 30, 2004.

The estimate of the amount in Reais of the fractions arising
from the calculation of the bonus has not exceeded the total of
R$ 0.05 (five centavos) per stockholder listed in the company's
Nominal Share Register at that time.  The payment was made will
be made by transfer to stockholders' current accounts.

CONTACT: Cemig Companhia Energetica de Minas Gerais
         AV. Barbacenda 1200
         Bello Horizonte MG, 30161-970
         Brazil


GERDAU: Files Prospectus for Common Shares Offering
---------------------------------------------------
Gerdau Ameristeel Corporation (TSX: GNA.TO) announced Tuesday
that it has filed a preliminary short form prospectus with the
securities regulatory authorities in all provinces and
territories of Canada, and a registration statement on Form F-10
with the United States Securities and Exchange Commission, in
connection with a proposed offering in the United States and
Canada of 70 million of its common shares.

Gerdau S.A. currently owns approximately 72% of the approximate
225 million outstanding common shares of Gerdau Ameristeel as of
September 24, 2004, and will purchase 35 million of the common
shares from Gerdau Ameristeel in the proposed offering.

Merrill Lynch, Pierce, Fenner & Smith Incorporated and BMO
Nesbitt Burns Inc. will act as joint book-running managers for a
proposed public offering in the United States and Canada of the
remaining 35 million common shares. CIBC World Markets Corp.,
J.P. Morgan Securities Inc. and Morgan Stanley & Co.
Incorporated will act as underwriters.

Gerdau Ameristeel has also granted to the underwriters an
overallotment option to purchase up to an additional 5.25
million common shares within 30 days following the closing date.
Gerdau S.A. has agreed to purchase an equivalent number of
additional common shares to those purchased under the
overallotment option within two days after any exercise by the
underwriters of the overallotment option. Therefore the maximum
aggregate number of additional common shares issuable to the
underwriters and to Gerdau S.A. is 10.5 million. The final terms
of this offering will be determined at the time of pricing.

The purpose of this offering will be to finance Gerdau
Ameristeel's previously announced proposed acquisition of
certain assets and working capital of four long steel product
mills and four downstream facilities, which are referred to as
North Star Steel, from Cargill, Incorporated, to fund capital
expenditures and working capital and for general corporate
purposes.

A copy of the preliminary prospectus may be obtained by
contacting:

Merrill Lynch
World Financial Center
250 Vesey St. New York, NY 10080
or
181 Bay Street
Suite 400
Toronto, Ontario M6G 2S9
Or
BMO Nesbitt Burns
1 First Canadian Place
4th Floor
Toronto, Ontario M5X 1H3.

A registration statement relating to the common shares has been
filed with the United States Securities and Exchange Commission
but has not yet become effective. The common shares to be issued
under this offering may not be sold, nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. Similarly, these common shares may not be sold in
Canada until a receipt for a final prospectus is obtained. This
news release shall not constitute an offer to sell or the
solicitation for an offer to buy, nor shall there be any sale of
the common shares in any state, province, territory or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state, province, territory or
jurisdiction.

Gerdau Ameristeel is the second largest minimill steel producer
in North America with annual manufacturing capacity of over 6.4
million tons of mill finished steel products. Through its
vertically integrated network of 11 minimills (including one
50%-owned minimill), 13 scrap recycling facilities and 32
downstream operations, Gerdau Ameristeel primarily serves
customers in the eastern half of North America. The company's
products are generally sold to steel service centers,
fabricators, or directly to original equipment manufacturers for
use in a variety of industries, including construction,
automotive, mining and equipment manufacturing. Gerdau
Ameristeel's common shares are traded on the Toronto Stock
Exchange under the symbol GNA.TO.

CONTACT: Mr. Tom J. Landa
         Vice President and Chief Financial Officer
         Gerdau Ameristeel
         Phone: (813) 207-2300
         e-mail: tlanda@gerdauameristeel.com



===================
C O S T A   R I C A
===================

ICE: To Initiate Probe on Tendering Processes
---------------------------------------------
Costa Rica's electricity and telecoms monopoly ICE said it will
create a special commission to investigate the company's
tendering processes, according to Business News Americas. The
plan comes amid reports that the director of ICE's business and
project development unit, Oscar RodrĄguez, has received some
US$70,000 in connection with the money transfer scandal from
French equipment supplier Alcatel to former ICE workers who
reportedly secured some 400,000 cellular contracts in ICE.



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

AIR JAMAICA: Unveils Restructuring Plan
---------------------------------------
National airline Air Jamaica has outlined a restructuring plan
aimed at keeping its operations viable, reports Europe
Intelligence Wire.

The new plan seeks a US$50 million reduction in costs and aims
to generate savings of US$15 million through staff givebacks,
according to the airline's CEO Christopher Zacca.

The Company has hired US consultancy firm Sabre Consulting to
re-evaluate the business and the new plan by looking at revenues
and costs as well as working with the airline to analyze its
fuel management, staff, finance and aviation operations.



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

AXTEL: Inks Telephony Services Deal With Nortel Networks
--------------------------------------------------------
Mexican telecom operator AXTEL, S.A. de CV, has chosen Nortel
Networks (NYSE:NT)(TSX:NT) to accelerate the convergence of its
voice and data networks over an IP (Internet Protocol) network,
positioning the service provider to broaden its service
offerings, expand its coverage area and reduce operating costs.

"AXTEL plans to migrate all of its telephony traffic to a voice
over IP (VoIP) network," said Alberto de Villasante, vice
president, Negotiations, Alliances and Institutional Affairs of
AXTEL. "Nortel Networks packet-based convergence solutions will
allow us to offer our subscribers IP services that are unique in
the market -- services like integrated voice and video
communications, secure instant messaging and instant file
transfer, while at the same time reducing our capex and network
operation expenses."

AXTEL will deploy Nortel Networks Succession Communication
Server (CS) 2000 and Nortel Networks Passport Packet Voice
Gateway (PVG) to build a single, converged IP infrastructure
that will enable AXTEL to offer local and long-distance services
by the end of 2004 in Mexican markets where it does not yet have
a local presence, such as Saltillo, Aguascalientes, Tijuana and
Ciudad Juarez. With design and implementation support from
Nortel Networks, the next generation network will position AXTEL
to more quickly respond to market opportunities.

In the second phase of the project, AXTEL plans to migrate its
voice and data traffic in the markets it currently serves, onto
the new IP infrastructure to offer new VoIP services. This
includes around 400,000 lines in service, supported by AXTEL's
extensive fixed wireless access network.

"Nortel Networks IP solutions allow innovative service providers
like AXTEL to simplify and transform their networks into more
flexible and powerful infrastructures that can help them speed
the deployment of value-rich services to their subscribers while
driving down the cost of operation," said Manuel Terrero, vice
president, Wireline Networks, Caribbean and Latin America,
Nortel Networks.

Nortel Networks Succession CS 2000 Superclass softswitch enables
service providers to deliver the full suite of traditional voice
services to business and residential customers on a packetized
network with voice and data traffic sharing the same
communications lines to provide more efficient and cost-
effective use of existing transmission capacity. As a trunk
gateway, Passport PVG is an integral part of Nortel Networks
Carrier VoIP solutions. It offers complete carrier-grade options
for long distance, local exchange, wireless and cable operators.

For the entire year 2003 and the first half of 2004, Nortel
Networks ranked #1 in the global markets for carrier packet
voice and softswitch revenue, according to Synergy Research
Group (SRG). Nortel Networks, which has a proven portfolio of
products and services for packet voice services, is providing
Succession voice over packet solutions to a number of leading
operators, including Bell Canada, Cable & Wireless Cayman
Islands, Charter Communications, China Netcom, China Railcom,
Cox Communications, Hong Kong Broadband Network, MCI, Sprint and
Verizon Communications.

AXTEL is a Mexican telecommunications company that provides
local telephone services, national and international long
distance services, data, internet, virtual private nets, and
value added services. Axtel has provided Mexico with a basic
telecommunications infrastructure through an intelligent net
that offers wide coverage to all markets. At present, it is
operating in Mexico City, Monterrey, Guadalajara, Puebla, Leon,
Toluca, Queretaro and San Luis Potosi. AXTEL has brought to the
market various access technologies that include fixed wireless
telephony, point-to-point radio links, point-to-multipoint radio
links, and fiber optics, all of which are offered to match the
communication solutions that its customers require. Fifty eight
percent of AXTEL capital is Mexican. The remaining 42% belongs
to foreign investors, among which are, mainly, AIG-GE Capital
Latin American Infrastructure Fund (LAIF); AIG Latin American
Equity Partners; Blackstone Group; American International
Underwriters Overseas Ltd., and Soros Group. For more
information, please visit: www.axtel.com.mx.

As a global innovation leader, Nortel Networks enriches consumer
and business communications worldwide by offering converged
multimedia networks that eliminate the boundaries among voice,
data and video. These networks use innovative packet, wireless,
voice and optical technologies and are underpinned by high
standards of security and reliability. For both carriers and
enterprises, these networks help to drive increased
profitability and productivity by reducing costs and enabling
new business and consumer services opportunities. Nortel
Networks does business in more than 150 countries. For more
information, visit Nortel Networks on the Web at
www.nortelnetworks.com or www.nortelnetworks.com/media_center.

Nortel Networks, the Nortel Networks logo, the Globemark,
Business Without Boundaries, Succession and Passport are
trademarks of Nortel Networks.

CONTACTS:  NORTEL NETWORKS
           Ferngene Kook, 954-858-7101
           Email: fkook@nortelnetworks.com
                  or
           AXTEL
           Jose Manuel Basave, +52 (81) 8114-1122
           Email: jmbasave@axtel.com.mx


CFE: Struggles to Fend Off Labor Lawsuits
-----------------------------------------
Labor lawsuits filed against the Comision Federal de
Electricidad (CFE), Mexico's largest provider of electrical
energy, are increasing, prompting the state-owned company to
seek court protection, reports El Universal.

In the last 18 months, 3,757 lawsuits - alleging unjustified
dismissals, violation of contract terms, unfair treatment and
even negligence on behalf of authorities responsible for
attending to the needs of the CFE's staff - have been filed
against the company.

Besides being a financial burden to the company, the lawsuits
are also a concern for the firm's general management as it shows
that conflict prevention and controversy resolution policies,
which have been in effect since 2001, are failing.


PLIANT CORP.: S&P Places Ratings On Watch Negative
--------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Pliant
Corp. (B+/Watch Neg/--) on CreditWatch with negative
implications, reflecting concerns about the company's ability to
improve earnings and operating cash flows sufficiently to
support the debt reduction necessary at the current ratings.

"Challenging industry conditions have limited Pliant's ability
to reduce its very high debt leverage this year, and a weaker-
than-expected financial performance during the third and fourth
quarters could result in a downgrade," said Standard & Poor's
credit analyst Liley Mehta.

The company is expected to report its results for the third
quarter ended Sept. 30, 2004, by Nov. 15, 2004. Schaumburg,
Ill.-based Pliant had total debt outstanding of about $814
million at June 30, 2004.

Increasing raw-material costs (particularly plastic resins)
arising from a steep oil and natural gas price environment have
pressured Pliant's operating performance in the fragmented and
highly competitive films and flexible packaging industry.
Standard & Poor's is concerned that these issues, which have
resulted in deterioration in the company's already stretched
financial profile, may have persisted through the third quarter.

Lower operating results in the first six months of 2004 compared
to the prior year reflect the impact of increased raw-material
costs in the flexible film and packaging segments and
underperformance in Mexico and in the Pliant Solutions segment.
Management has implemented restructuring actions--including
plant rationalizations and headcount reductions--which are
expected to generate cost savings. Still, the inability to fully
pass through higher resin costs to customers, coupled with
competitive pricing pressures and downguaging by customers has
contributed to lower operating margins of about 10% in 2004,
from the low- to mid-teens percentage area in 2003.

The company is very aggressively leveraged with total debt
(adjusted for capitalized operating leases) to EBITDA at about
9x for the 12 months ended June 30, 2004. Accordingly, credit
measures are subpar with EBITDA to interest coverage near 1x,
and the company has not generated free cash flows for the past
four years. At June 30, 2004, Pliant had about $3.7 million in
cash and about $48 million in availability under its new $100
million revolving credit facility after borrowing base
calculations. Borrowings are limited to 75% of the revolving
credit facility as the company is not in compliance with the
minimum fixed-charge coverage ratio of 1.1x.

Standard & Poor's will meet with Pliant's senior management in
the near future to review the company's prospects, and to
determine the company's strategies, time frame and capacity for
achieving operating improvements that would support management's
objective to reduce debt leverage. If the company's operating
performance weakens and results in further deterioration of the
financial profile or if prospects for achieving a meaningful
turnaround are not greatly improved, ratings will be lowered.


TV AZTECA: SEC Issues "Wells Notice" To Company, Executives
-----------------------------------------------------------
Azteca Holdings, the holding company of Mexico's second-largest
broadcaster TV Azteca SA (TZA), expects the U.S. Securities and
Exchange Commission to sue TV Azteca and four of its executives
over a debt transaction at its telephone unit, Unefon SA.

In a filing to the SEC, Azteca Holdings revealed that on or
around August 27, 2004, the SEC issued "Wells Notices" to TV
Azteca, Ricardo B. Salinas Pliego, Pedro Padilla, Luis Echarte
and Francisco X. Borrego Hinojosa. TV Azteca's Wells Notice
states that the staff of the SEC intends to recommend that the
Commission bring a civil injunctive action.

In January, the SEC opened an investigation regarding
transactions between Unefon SA, a subsidiary of Azteca Holdings,
Nortel Networks Corp. (NT) and Codisco Investments LLC. The move
came after Salinas and his business partner, Moises Saba, made a
US$218 million profit by buying Unefon debt. Salinas and Saba
bought at a discount debt that Unefon owed Nortel Networks
Corp., paying US$107 million. Two months later, Unefon paid
Salinas and Saba full face value on the US$325 million of debt.

TV Azteca said it cannot predict the outcome of the SEC's
investigation but cautioned that the SEC "may impose fines or
penalties that could have a material adverse effect on our
financial condition and result of operations."

TV Azteca further revealed that Mexico's Banking and Securities
Commission (CNBV) has also requested information and
documentation from the company regarding the Unefon-Nortel-
Codisco transactions and its related public disclosures.

TV Azteca said it has satisfied CNBV's information requirements
but said it cannot predict the outcome of review by the CNBV.
This particular review could have a material adverse effect on
its financial position and results of operations, it added.

CONTACT: TV Azteca S.A.

         Investor Relations
         Mr. Bruno Rangel
         Phone: 5255 1720 9167
         e-mail: jrangelk@tvazteca.com.mx

         Mr. Omar Avila
         Phone: 5255 1720 0041
         e-mail: oavila@tvazteca.com.mx

         Media Relations
         Mr. Tristan Canales
         Phone: 5255 1720 5786
         e-mail: tcanales@tvazteca.com.mx

         Mr. Daniel McCosh
         Phone: 5255 1720 0059
         e-mail: dmccosh@tvazteca.com.mx



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

PDVSA: To Continue Cooperation Talks With Petropar Next Week
------------------------------------------------------------
State oil company Petroleos de Venezuela SA (PDVSA) expects to
carry on negotiations with the officials from Paraguay's state
oil company Petropar regarding cooperation programs next week,
reports Business News Americas.

"There is a decided political will, and we are only waiting for
evaluations and definitions of the technical and specific
aspects that will be included in the agreement, whose central
lever will be the energy and foodstuff sectors," said PDVSA
chairman Ali Rodriguez, who met with Paraguay's President
Nicanor Duarte and Petropar chairman Angel Recalde on Monday.

Recalde reportedly proposed that PDVSA supplies diesel to
Paraguay and offers 40% financing repayable over 15 years with
2% annual interest, with Petropar paying the other 60% within
120 days of receiving the fuel. But PDVSA made a better proposal
by offering below-market prices.

A final agreement is likely to be signed when President Duarte
visits Caracas in November.



                            ***********


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

This material is copyrighted and any commercial use, resale or
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