TCRLA_Public/041021.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 21, 2004, Vol. 5, Issue 209

                            Headlines


A R G E N T I N A

BANCO SUQUIA: Considering Public Equity Listing
BINARY S.A.: Debt Payments Halted, Set To Reorganize
BIOTRIT S.R.L.: Bankruptcy Initiated by Court Order
CALVANI S.A.: Liquidates Assets to Pay Debts
CLAXSON INTERACTIVE: Launches Turbo Video VOD in Brazil

CURVASUR S.R.L.: Court Authorizes Reorganization Process
DELCO SERVICIOS: Court Declares Company Bankrupt
FE DE IMAGENES: Proceeds to Liquidate Assets
GUSTAVO NAVAL: Court Issues Bankruptcy Ruling
INDUSTRIAS ALIMENTICIAS: Court Rules for Liquidation

MILLICOM INTERNATIONAL: Records 47% EBITDA Increase
PETROBRAS ENERGIA: Fitch Ups International Ratings to 'B'
TELEFONICA DE ARGENTINA: Inks Agreement With Germany's Siemens
ZOOMP S.A.: Begins Liquidation Proceedings


B R A Z I L

BRASKEM: To Buy Back Bonds Maturing in 2007
DIRECTV LA: Latin American Deal Suffers Legal Setback
EMBRATEL: Staying the Course Despite Weak 3Q Results
GERDAU: To Proceed With Mill Construction
USIMINAS: S&P Raises Local Currency Rating To 'BB'


D O M I N I C A N   R E P U B L I C

AES CORP.: In Violation of DR's Electricity Law


M E X I C O

GRUPO DESC: Sales, Exports Up 15% YoY; EBITDA Improves
HYLSAMEX: Excellent 3Q04 Performance To Boost Parent's Results
TFM: Tax Exemption Confusion May Impact Results


V E N E Z U E L A

BELLSOUTH VENEZUELA: Ordered to Pay $403M to Grupo Cisneros


     - - - - - - - - - -

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

BANCO SUQUIA: Considering Public Equity Listing
-----------------------------------------------
Argentine bank Banco Suquia, which was recently acquired by
local private bank Banco Macro Bansud, is mulling the
possibility of placing an unspecified amount of capital on the
stock market. According to Business News Americas, the bank
would first list on the Cordoba bourse, and then eventually move
to the Buenos Aires stock exchange.

Invertironline brokerage financial analyst Juan Ignacio Gomez
told Business News Americas that high demand for the stock can
be expected because of the lack of alternate investments in the
Argentine market and because of the possible identification of
Cordoban investors with Banco Suquia.

Suquia is one of the largest banks in Cordoba, Argentina's
second wealthiest province.

State-owned bank Banco de la Nacion took control of Suquia and
two other banks when French banking conglomerate Credit Agricole
left Argentina during the 2002 financial crisis. Early this
month, Macro Bansud formally agreed to buy Suquia from Nacion.


BINARY S.A.: Debt Payments Halted, Set To Reorganize
----------------------------------------------------
Judge Fernandez, working for court no. 19 of Buenos Aires' civil
and commercial tribunal, is currently reviewing the merits of a
petition to reorganize submitted by Binary S.A..

La Nacion recalls that the company filed the petition following
cessation of debt payments since May 3 this year. Reorganization
will allow the Company to avoid bankruptcy by negotiating a
settlement with its creditors.  

The Company has stated assets of US$1,179,721.45 with
liabilities of US$1,518,112.58. Clerk no. 37, Dr. Durao, assists
the court with the proceedings.

CONTACT: Binary S.A.  
         Reconquista 737
         Buenos Aires


BIOTRIT S.R.L.: Bankruptcy Initiated by Court Order
---------------------------------------------------
Biotrit S.R.L. enters bankruptcy protection after court no. 25
pf Buenos Aires' civil and commercial tribunal , with the
assistance of clerk no. 50, ordered the company's liquidation.
The bankruptcy 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 Mr. Luis M. Escobar  as
trustee. He will be verifying creditors' proofs of claims until
the end of the verification phase on December 2.

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 February 14, 2005 followed by the general report, which is
due on March 30, 2005.

CONTACT: Mr. Luis M. Escobar, Trustee
         Viamonte 1646
         Buenos Aires


CALVANI S.A.: Liquidates Assets to Pay Debts
--------------------------------------------
Calvani S.A. of Buenos Aires will begin liquidating its assets
following the bankruptcy pronouncement issued by court no. 3 of
the city's civil and commercial tribunal. Infobae reports that
the ruling places the company under the supervision of court-
appointed trustee, Mr. Moises Gorelik. The trustee will verify
creditors' proofs of claims until December 17. The validated
claims will be presented in court as individual reports on March
1, 2005.

Mr. Gorelik 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 April 13, 2005. The
bankruptcy process will end with the disposal company assets in
favor of its creditors.

CONTACT: Mr. Moises Gorelik, Trustee
         Avda Cordoba 850
         Buenos Aires


CLAXSON INTERACTIVE: Launches Turbo Video VOD in Brazil
-------------------------------------------------------
Brasil Telecom (BOVESPA: BRT03/BRT04)(NYSE: BTM), the second-
largest broadband company in Latin America and one of the
largest telecommunications companies in Brazil, and Claxson (OTC
Bulletin Board: XSON), a multimedia company providing branded
entertainment content to Spanish and Portuguese speakers around
the world, launched in Brazil the Turbo Video VOD (Video on
Demand) service on the ESDC (El Sitio Digital Channel) platform,
one of the leading broadband platforms in Latin America
developed by Claxson. At the Futurecom trade show in
Florianopolis, Brazil, both companies will be showcasing Turbo
Video, which will become available to Brasil Telecom broadband
users.

Through this agreement, Brasil Telecom users will have access to
the digital content offered in the ESDC digital platform through
different packages: the best of Fox Sports Latin America, one of
the leading sports networks in the region, featuring, among
other things, the Copa Libertadores and daily sports news
updates; the most sensual productions of Playboy TV Latin
America & Iberia; backstage access to Playboy magazine photo
shoots; Claxson's pay television programming, including
MuchMusic Canada, MuchMusic Argentina, Fashion TV, Infinito,
Venus movies and a selection of classic films featured in the
Retro and Space channels. The offer also includes the contents
of Utilisima, a channel that targets women in the rest of Latin
America and is now available in Brazil. The availability of the
Playboy content is based on a marketing and distribution
agreement signed between Editorial Abril and Claxson.

According to the Marketing Director at Brasil Telecom, Carlos
Costa Pinto, "the service will be offered as a monthly
subscription, with several different packages, or on demand,
where the user only pays for what is accessed. The content
featured is extremely varied, including movies, fashion, music,
sports and adult content."

Roberto Cibrian, senior vice president of the Broadband and
Internet Division at Claxson and responsible for the ESDC
operations said, "It's an honor to partner with Brasil Telecom,
a company of such relevance and prestige which trusted in our
products to materialize its Internet broadband efforts. This
agreement opens the doors for the future expansion of our
company in Brazil, where we already count on Marcos Galassi of
NexTVision, a strategic and knowledgeable ally in IP technology,
for the development of our IP television platform."

Founded in 2004 by Marcos Galassi, NexTVision is the first
Brazilian company to develop technology for the distribution of
interactive contents through IP networks, including operating
systems, applications for setup-boxes and program management
systems. Recently, NexTVision signed an exclusivity agreement
for the distribution of all of Claxson's digital content in
Brazil, including those represented by its ESDC division such as
games, online communities, and other products developed by that
company. NexTVision also represents the Discovery Channel School
brand for IP media distribution.

The Brasil Telecom and Claxson agreement will allow the
operator's broadband users to access three different digital
content packages, tailored to their preferences, including the
option to rent movies. In addition, the 250,000 subscribers of
BR Turbo, Brasil Telecom's portal, will be able to enjoy a
special discount for this service.

Brazil Telecom provides fixed telephone services in local,
national and international long distance calls throughout the
country, as a concessionary in the region II, which includes the
Brazilian states of Acre, Rondonia, Tocantins, Goias, Mato
Grosso, Mato Grosso do Sul, Parana, Santa Catarina e Rio Grande
do Sul as well as the Federal District. The company also has
authorization to provide those services in the remaining
Brazilian regions and international long distance services all
over the country.

By using its SRTT authorization, Brazil Telecom provides data
communication and enterprise network services in the region II,
extending such services locally and internationally, through the
partnership with its allied companies. Through its subsidiary,
Brazil Telecom GSM, the Brazil Telecom also provides mobile
phone services throughout the region II.

Nowadays, Brazil Telecom provides data center services through
its Cyber Data Centers located in Porto Alegre, Curitiba, Sao
Paulo and Brasilia -- it serves over two hundred customers
offering high performance solutions besides infrastructure,
information technology and telecommunications.

Brazil Telecom has more than 10.7 million of lines in operation,
296,000 public telephones and 99% of the network in digital
mode. It operates the second-largest wide-band base in Latin
America. In 2003, Brazil Telecom's total sales was 11 billion
reales.

The Broadband and Internet Division groups all of Claxson's
broadband and Internet properties. ESDC is the leader in the
broadband sector, and it is the first intelligent multimedia
platform, developed by Claxson, to serve the Iberoamerican
Internet market in the region.

This unit also includes all of Claxson's online contents and
interactive marketing tools, all grouped under the brand El
Sitio.com, as well as its pay television sites, Space, Retro,
I.Sat, Infinito, FTV, MuchMusic, HTV, Venus and Playboy TV and
its interactive formats and on-line versions of the radio
stations of the Broadcasting division.

CONTACT: Claxson Interactive Group, Inc.
         Avenida Melian 2752
         Buenos Aires, C1430EYH
         Argentina
         Phone: 011-5411-4546-8000
         Website: http://www.claxson.com

        
CURVASUR S.R.L.: Court Authorizes Reorganization Process
--------------------------------------------------------
Curvasur S.R.L. will begin reorganization proceedings following
the approval of its petition by court no. 2 of Lomas de Zamora's
civil and commercial tribunal. The opening of the reorganization
will allow the company to negotiate a settlement with its
creditors in order to avoid a straight liquidation.

Court-appointed trustee Mr. Maria del Carmen Perez Alonso will
oversee the reorganization proceedings as the court-appointed
trustee. She will verify creditors' claims until November 5. The
validated claims will be presented in court as individual
reports on December 23.

The trustee is further required by the court to submit a general
report essentially auditing the company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. This report will be presented
in court on February 25, 2005.

The Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the company's
creditors for approval, is scheduled on July 8, 2005.

CONTACTS: Curvasur S.R.L.
          Cabildo 815
          Avellaneda
   
          Ms. Maria del Carmen Perez Alonso, Trustee
          Belgrano 269
          Lomas de Zamora


DELCO SERVICIOS: Court Declares Company Bankrupt
------------------------------------------------
Judge Santacchita, temporarily serving for court no. 18 of
Buenos Aires' civil and commercial tribunal, declared local
company Delco Servicios S.R.L. "Quiebra", relates La Nacion. The
order comes in approval of the petition filed by the Company's
creditor, Mr. Enrique Acuna.  

The Company will undergo the bankruptcy process with Ms. Alicia
Kurlat as its trustee. Creditors are required to present their
proofs of claims to the trustee for verification before December
3. 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. Estevarena, the city's clerk no. 35 assists the court on the
case.

CONTACT: Delco Servicios S.R.L.
         Azara 1342
         Buenos Aires

         Ms. Alicia Kurlat, Trustee
         Carlos Pellegrini 1079
         Buenos Aires


FE DE IMAGENES: Proceeds to Liquidate Assets
--------------------------------------------
Court no. 26 of Buenos Aires' civil and commercial has issued a
resolution opening the bankruptcy of local company Fe de
Imagenes S.R.L., says Infobae. The trustee who will supervise
the proceedings has not been named and no dates have been fixed
for the submission of the individual and general reports.

CONTACT: Fe de Imagenes S.R.L.
         Parana 230
         Buenos Aires


GUSTAVO NAVAL: Court Issues Bankruptcy Ruling
---------------------------------------------
Judge Vasallo, serving for court no. 5 of Buenos Aires' civil
and commercial tribunal, declared local company Gustavo Naval
S.R.L. bankrupt, says La Nacion. The ruling comes in approval of
the bankruptcy petition filed by Union de Obreros y Empleados
Plasticos for unpaid debts totaling US$1,892.11.

Trustee Maria del Carmen Amandule will examine and authenticate
creditors' claims until December 6. The claims review process is
undertaken 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. Djivaris, clerk no. 10, assists the court on the case that
will conclude with the liquidation of the Company's assets.

CONTACT: Gustavo Naval S.R.L.
         Mr. Pedro Chutro 3260
         Buenos Aires

         Ms. Maria del Carmen Amandule, Trustee
         24 de Noviembre 1226
         Buenos Aires


INDUSTRIAS ALIMENTICIAS: Court Rules for Liquidation
----------------------------------------------------
Court no. 3 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Industrias Alimenticias Inojosa S.A.
after the company defaulted on its obligations, Infobae reveals.
The liquidation pronouncement will effectively place the
company's affairs as well as its assets under the control of Mr.
Javier Hernan Gandara, the court-appointed trustee.

Mr. Gandara will verify creditors' proofs of claims until
December 7. The verified claims will serve as basis for the
individual reports to be submitted in court on February 18,
2005. The submission of the general report follows on April 1,
2005.

Clerk no. 5 assists the court on this case that will end with
the disposal of the company's assets in favor of its creditors.

CONTACT: Industrias Alimenticias Inojosa S.A.
         Avda Rivadavia 746
         Buenos Aires

         Mr. Javier Hernan Gandara, Trustee
         Riobamba 719
         Buenos Aires


MILLICOM INTERNATIONAL: Records 47% EBITDA Increase
---------------------------------------------------
Millicom International Cellular S.A. (Nasdaq Stock Market: MICC,
Stockholmsborsen and Luxembourg Stock Exchange: MIC), the global
telecommunications investor, announced Tuesday results for the
quarter and nine months ended September 30, 2004.

HIGHLIGHTS:

- Record quarterly total subscriber increase for Q3 04 of
480,866 - 51% increase in revenues for Q3 04 to $235.3m (Q3 03:
$156.1m) - 42% increase in EBITDA for Q3 04 to $117.4m (Q3 03:
$82.7m)

- Profit for Q3 04 of $12.8m (Q3 03: loss of $13.2m)

- Earnings per common share for Q3 04 of $0.14 (Q3 03: loss of
$0.20)

- Total shareholders equity as at Sept 2004 of $8.4m (Dec 2003:
$(85.2)m)

- 52% increase in revenues for the nine months to Sept 2004 to
$663.6m (2003: $437.7m)

- 47% increase in EBITDA for the nine months to Sept 2004 to
$331.5m (2003: $224.8m)

- Profit for the nine months to Sept 2004 of $42.3m (2003:
$189.1 m)

- Earnings per common share for the nine months to Sept 2004 of
$0.53 (2003: $2.90)

Marc Beuls, MIC's President and Chief Executive Officer stated:

"In the third quarter MIC added 480,866 net new total cellular
subscribers, a record for the Group, providing clear evidence of
how fast MIC is able to grow its businesses organically. The
strongest growth has come from South East Asia, where price cuts
are enabling Millicom to drive penetration at a faster rate than
was previously possible, evidenced by our Vietnam operation
passing the 1.5 million subscriber mark and, from Africa, where
the pace of subscriber acquisition continues to grow quarter on
quarter, the direct result of the increased level of investment
in the region during the last year. These strong subscriber
numbers have also translated into some exceptionally strong
financial numbers as not only is MIC able to grow its subscriber
base but it also reported a 10% increase in prepaid minutes of
use compared to last quarter, as lower tariffs encourage greater
use of telephony.

"Revenues are up 51% year on year and 9% on the quarter. In
Guatemala, Honduras, Paraguay, Ghana, Tanzania and Vietnam
revenue growth from the second quarter of 2004 is in excess of
10%, showing the broad base of growth. In Latin America the
growth recovery has been driven by the successful launch of Tigo
GSM services. EBITDA is up 42% year on year and MIC has
maintained margins of 50%. Quarterly EBITDA growth of 14% in
Latin America, 20% in Africa and 9% in South East Asia shows the
acceleration in earnings growth on a global basis.

"Paktel and Pakcom are currently negotiating the launch of the
GSM network as well as the renewal of their licenses with the
Government of Pakistan. Constructive talks are being held
between parties with the intention to achieve a settlement that
would address both parties' issues. We will inform the market
once the deal is closed with the PTA, the Pakistan regulator. A
resolution of the Pakistan issues will definitely be accretive
to the future growth of Millicom."

FINANCIAL AND OPERATING SUMMARY

Subscriber growth:

- An annual increase in total cellular subscribers of 29% to
6,853,233 as at September 30, 2004

- An annual increase in proportional cellular subscribers of 24%
to 4,737,721 as at September 30, 2004

- In the third quarter of 2004 MIC added 480,866 net new total
cellular subscribers

- Proportional prepaid subscribers increased to 4,199,068 from
3,341,001 as at September 30, 2003

Financial highlights:

- Revenues for the third quarter of 2004 were $235.3 million, an
increase of 51% from the third quarter of 2003. Excluding El
Salvador the increase was 31%. Compared to the second quarter of
2004, revenues increased by 9% from 215.2 million.

- EBITDA increased by 42% in the third quarter of 2004 to $117.4
million, from $82.7 million for the third quarter of 2003.
Excluding El Salvador, the increase was 22%. Compared to the
second quarter of 2004, EBITDA increased by 9% from 107.5
million.

- Total shareholders' equity became positive reaching $8.4m as
at September 30, 2004 compared to ($85.2m) as at December 31,
2003.

- Profit for the third quarter of 2004 was $12.8 million,
compared to a loss of $13.2 million for the third quarter of
2003.

- Capital expenditure for the nine months ended September 30,
2004 was $160.2 million.

- The quarterly EBITDA margin for Africa was 43%, up from 40%
for the second quarter of 2004.

- Revenues for South America increased by 18% from the third
quarter of 2003, highlighting the economic turnaround of this
market.

- Total cellular minutes increased by 50% for the three months
ended September 30, 2004 from the same quarter in 2003 and by
38% excluding El Salvador. Prepaid minutes increased by 57% in
the same period and by 49% excluding El Salvador.

- During the third quarter Millicom's operations in Paraguay
Guatemala, El Salvador and Honduras, launched GSM services in
the 850MHz frequency, under the brand name of Tigo.

- On September 22, 2004 MIC sold its 65% holding in Millicom
Argentina S.A., the high speed wireless data joint venture to
the local partner, after having obtained regulatory approval,
for a nominal amount.

REVIEW OF OPERATIONS

SUBSCRIBER GROWTH

In the third quarter of 2004 MIC's worldwide operations in Asia,
Latin America and Africa added 480,866 net new total cellular
subscribers. On a proportional basis, MIC added 316,536
subscribers, bringing the number of proportional cellular
subscribers as at September 30, 2004 to 4.7 million.

At September 30, 2004, MIC's total cellular subscriber base
increased by 29% to 6,853,233 cellular subscribers from
5,303,841 as at September 30, 2003. Particularly significant
percentage increases were recorded in Ghana (163%), Senegal
(97%), Tanzania (79%) and Vietnam (74%). MIC's proportional
subscriber base increased to 4,737,721 as at September 30, 2004
from 3,806,646 as at September 30, 2003, an increase of 24%.

Within the 4,737,721 proportional cellular subscribers reported
at the end of the third quarter, 4,199,068 were prepaid
subscribers. Prepaid subscribers currently represent 87% of
total and 89% of proportional cellular subscribers.

FINANCIAL RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004

Total revenues for the three months ended September 30, 2004
were $235.3 million, an increase of 51% from the third quarter
of 2003, reflecting the increasing trend of growth in MIC's
operations and the reconsolidation of El Salvador since
September 15, 2003. MIC recorded revenue growth in Africa of 83%
to $38.8m in the third quarter of 2004 compared with the same
period in 2003, with Ghana producing growth of 118%.

Revenues for Asia for the third quarter of 2004 increased by 26%
from the same period last year. Third quarter revenues for South
East Asia were $59.6 million compared to $41.8 million in the
third quarter of 2003. Third quarter revenues for South Asia
were flat compared to the third quarter of 2003.

Third quarter revenues for Latin America increased by 70% from
the third quarter of 2003, mainly because of the reconsolidation
of El Salvador since September 15, 2003, or by 21% if El
Salvador is excluded. The Central American market continued to
perform strongly, producing a 104% increase in revenues from the
third quarter of 2003 and by 24% excluding El Salvador.

In South America, revenue growth was 18% and Paraguay produced a
revenue increase of 27%, its highest year-on-year quarterly
increase for several years, pointing to a sustained recovery in
the region.

Compared to the second quarter of 2004, revenues increased by
9%. Revenues grew by 13%, 17% and 16% in Guatemala, Honduras and
Paraguay respectively, reflecting the successful launch of GSM
and strong growth in those countries.

Compared to the second quarter of 2004, revenues grew by 15% in
South East Asia, with revenues in Vietnam growing by 18% due to
increased penetration enabled by price reductions.

EBITDA for the three months ended September 30, 2004 was $117.4
million, an increase of 42% from the quarter ended September 30,
2003. EBITDA for Africa increased by 88% to $16.7 million in the
third quarter of 2004 from $8.9 million in the third quarter of
2003, with the most impressive growth occurring in Ghana.

EBITDA for Asia was $47.8 million for the third quarter, an
increase of 12% from the same period in 2003, with an increase
of 28% for South East Asia. South Asia saw a decline in EBITDA
in the third quarter of 2004 resulting from the build out of the
GSM network that did not generate any revenue yet.

Latin America recorded growth in EBITDA of 72% from the third
quarter of 2003 to $52.7 million, following the reconsolidation
of El Salvador since September 15, 2003. Excluding El Salvador,
EBITDA grew by 18%.

The quarterly EBITDA margin for Asia was 55%, (59% for South
East Asia and 44% for South Asia), for Latin America it was 49%
(53% for Central America and 39% for South America) and for
Africa it was 43%.

Compared to the second quarter of 2004, EBITDA increased by 9%.
There was strong EBITDA growth in Africa, Central America and
South America with respectively 20%, 13% and 15% growth compared
to last quarter, reflecting strong performance and the
successful launch of GSM in Latin America.

FINANCIAL RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004

Total revenues for the nine months ended September 2004 were
$663.6 million, an increase of 52% from the same period of 2003.

Revenues for Africa were $105.6 million, increasing by an
impressive 83%. In Asia revenues for the nine months to
September 30, 2004 increased by 27% from 2003 to $255.5 million,
with $167.2 million recorded for South East Asia and $88.3
million for South Asia. Revenues for Latin America for the nine
months to September increased by 74% to $298.8 or by 16% to
$192.3 million if El Salvador is excluded. Revenues for Central
America (including El Salvador) and South America were $217.1
million and $81.7 million respectively.

EBITDA was $331.5 million for the nine months to September 2004,
an increase of 47% over the same period of 2003. Most notably
Africa recorded an 82% increase to $44.0 million for the nine
months ended September 30, 2004. EBITDA for Asia was $145.3
million, up 24% from the year to September 2003, with $101.0
million and $44.3 million recorded for South East Asia and South
Asia respectively.

EBITDA for Latin America increased by 75% to $142.6 million with
$110.9 million recorded for Central America and $31.7 million
recorded for South America. Excluding El Salvador, EBITDA for
Latin America increased by 17% from the same period in 2003. The
Group EBITDA margin for the nine months to September 30, 2004
was 50%, for Asia it was 57% (60% for South East Asia and 50%
for South Asia), for Latin America it was 48% (51% for Central
America and 39% for South America) and for Africa it was 42%.

The profit for the nine months ended September 30, 2004 and 2003
was $42.3 million and $189.1 million respectively. The basic
earnings per common share for the nine months ended September
30, 2004 and 2003 was $0.53 and $2.90 respectively.

The profit for the nine months ended September 30, 2003 included
amongst others an amount of $189.8 million relating to the gain
and valuation movement on investment in securities, the gain on
debt restructuring and the fair value result on financial
instruments.

Total cellular minutes increased by 51% for the nine months to
September 2004 compared with the same period in 2003.

Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16
cellular operations and licenses in 15 countries. The Group's
cellular operations have a combined population under license of
approximately 387 million people.

To view financial statements:
http://bankrupt.com/misc/millicom3Q.pdf

CONTACTS: Mr. Marc Beuls
          President and Chief Executive Officer
          Millicom International Cellular S.A.
          Luxembourg
          Phone: +352 27 759 327

          Mr. Andrew Best
          Investor Relations
          Shared Value Ltd, London
          Phone: +44 20 7321 5022

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


PETROBRAS ENERGIA: Fitch Ups International Ratings to 'B'
---------------------------------------------------------
Fitch Ratings has upgraded the international local and foreign
currency ratings of Petrobras Energia S.A. (PE) to 'B' from 'B-'
and upgraded the Argentine national scale rating to 'A+(Arg)'
from 'A(Arg)'. Fitch Ratings has also upgraded the short-term
national rating to 'A1(Arg)' from 'A2(Arg)'. All ratings have a
Stable Rating Outlook.

The upgrade reflects the company's improved financial ratios,
increased liquidity and added financial flexibility as well as
continued achievement of productivity and efficiency gains. The
rating is also supported by PE's strong level of dollar
denominated revenues, significant cash generation outside of
Argentina (approximately US$450 million per year), and strong
export proceeds (approximately US$300 million per year). A
degree of implicit parent support from Petrobras, recently
upgraded by Fitch to 'BB-', is also incorporated in the ratings.

Notwithstanding these strengths and improvements, the company's
credit profile continues to reflect fallout from Argentina's
sovereign crisis. The ongoing sovereign default, the shift in
government policies away from market-oriented frameworks and the
government's continued lack of addressing systemic sector
problems remain as constraints, primarily on the international
rating. At this time, the likelihood of further government
interference is uncertain, although these risks could ease
should the Argentine government reach an agreement with
creditors and the International Monetary Fund (IMF).

In June 2004 (six month period) PE reported a recovery in
financial ratios with EBITDA-to-interest improving to 4.0 times
(x) from 2.5x for 2002, primarily reflecting stable operating
income and lower interest expense due to more favorable interest
rates. Through June 2004 (six months), PE reported a
consolidated EBITDA of US$422 million, maintaining a strong
EBITDA margin of 40%. Approximately 40% of the EBITDA is
generated abroad, mainly in Venezuela and Ecuador (29% of total
EBITDA), where the operating environment has improved through
2004 as reflected in Fitch's upgrade of Venezuela to 'B+' from
'B-' in September 2004, and upgrade of Ecuador to 'B' from 'B-'
in October 2004.

PE's total production levels continued recovering reaching in
June 2004 the targeted level of 170 thousand barrels per day
(72% oil, 28% gas) with 53% concentrated in Argentina.
Production levels in Argentina still reflect a declining rate
that is not being offset with sufficient new investment. The
future level of activities of the company is dependent on the
level of investments. Annual capital expenditures of
approximately US$350 million are expected to maintain production
levels in Argentina and gradually increase volumes abroad,
focusing this growth in Venezuela. Future investments will be
mainly related to its upstream activities, focusing in the oil
sector.

At June 2004, the consolidated financial debt of PE amounted
US$2.878 billion of which 66% is attributed directly to PE
(US$1.907 billion). The affiliates debt is non-recourse to PE.
Virtually all of the company's long-term obligations are
denominated in U.S. dollars. The average life of debt is
approximately four years, although the company's strategy is to
gradually reduce its debt level and lengthen maturities via
refinancing efforts. The company has taken steps to improve its
financial flexibility through 2003 and 2004, with total
issuances in the national and international capital markets of
US$200 million with a 10 years length.

PE has scheduled debt maturities for the second semester of 2004
of US$200 million with a cash position of US$235 million as of
June 2004. For 2005, debt maturities amount to US$333 million,
interest expenses to approximately US$170 million and estimated
capital expenditures of approximately US$350 million. Assuming
similar operating performance for 2004 with an EBITDA estimated
in US$750 million, the company is expected to require additional
external financing sources to meet its total obligations.

In the first half of 2004, the company repaid approximately
US$150 million and in April accessed the local capital markets
with a US$100 million issuance. Debt maturities for the rest of
the year (October through December 2004) are approximately US$70
million, which should be manageable given the company's solid
cash position, recent financing successes and strong forecasted
oil prices (even if almost 30% of production is covered at US$19
/bbl). Historically PE has maintained a substantial cash balance
that helps reduce its exposure to financial markets volatility.

PE participates in various public service electric and gas
companies, which have suffered materially from the effects of
the Emergency Law since January 2002, which established the
pesofication and freezing of tariffs. Tariffs of the regulated
businesses in which PE participates have not yet been adjusted,
although the company anticipates some type of adjustment by
year-end. Regardless, Fitch does not anticipate that PE will
receive dividends or management fees from these entities in the
near term. The negotiations between the public service companies
and the government have been delayed and are not likely to be
addressed prior to December 2004.

PE is one of the most vertically integrated energy conglomerates
in Latin America with operations encompassing virtually all
segments of the energy value chain. Core business activities, in
order of importance, include oil and gas exploration and
production; refining and marketing; petrochemicals; and
electricity. PE is controlled by Petrobras Energia
Participaciones, a holding company indirectly controlled by
Brazil's national oil company, Petrobras. PE constitutes
Participacoes' sole operating asset. PE is consolidated as a
Petrobras subsidiary and its obligations are non-recourse to the
Brazilian parent. Fitch rates Petrobras' senior unsecured
foreign currency obligations 'BB-' with a Stable Rating Outlook.


TELEFONICA DE ARGENTINA: Inks Agreement With Germany's Siemens
--------------------------------------------------------------
Fixed-line carrier Telefonica de Argentina formalized an
agreement with German equipment manufacturer Siemens to buy
120,000 telephony terminals, reports Business News Americas. The
agreement, the value of which was not disclosed, includes
100,000 fixed telephones and 20,000 caller IDs manufactured in
Argentina to be provided for new lines and services during first
half of 2005. According to the report, the new equipment will be
manufactured in Argentina with technology developed by Siemens
and encompasses both companies' quality control processes.

CONTACT:  TELEFONICA DE ARGENTINA
          Tucuman 1, 18th Floor, 1049
          Buenos Aires, Argentina
          Phone: (212) 688-6840
          Home Page: http://www.telefonica.com.ar


ZOOMP S.A.: Begins Liquidation Proceedings
------------------------------------------
Zoomp S.A. entered bankruptcy after Judge Hualde of Buenos
Aires' civil and commercial tribunal court no. 9 approved the
motion filed by Ms. Vanesa Gomez. La Nacion reports that the
Company's failure to pay US$23,147.68 in debt prompted the
creditor to file the petition.

Working with Dr. Raisberg de Merenzon, the city's clerk no. 17,
the court assigned Mr. Atilio Mossi as trustee for the
bankruptcy process. The trustee's duties include the
authentication of the Company's debts and the preparation of the
individual and general reports. Creditors are required to
present their proofs of claims to the trustee before December
15.

The Company's assets will be liquidated at the end of the
bankruptcy process to repay creditors. Payments will be based on
the results of the verification process.

CONTACT: Zoomp S.A.
         Acevedo 172
         Buenos Aires

         Ms. Atilio Mossi, Trustee
         Montevideo 527
         Buenos Aires



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

BRASKEM: To Buy Back Bonds Maturing in 2007
-------------------------------------------
Braskem (NYSE: BAK), Brazil's No. 1 petrochemical company, will
use money raised from a recent global share issue to buy back
BRL1.2 billion (US$417 million) of local debt on November 3.
Citing a company statement, Business News Americas reports
Braskem will use the BRL1 billion raised from the sale of new
preferred A shares in September to pay down three-year bonds
issued in February this year.

"The company was able to pay down the debt not only because of
the share sale but also because of the company's higher cash
flow," a Braskem spokesperson told Business News Americas.

This is the second buy-back operation this year. In September,
the company paid down BRL360 million in local debt before
maturity.

These two operations, plus the payment of other debt that
matured in recent weeks, will reduce the company's debt to
BRL6.6 billion from BRL8.6 billion at the end of first half of
2004.

CONTACT: Braskem S.A.
         Av. Nacoes Unidas
         4777 Cep
         San Paulo, 05477-000
         Phone: 55-11-3443-9999
         Web Site: http://www.braskem.com.br


DIRECTV LA: Latin American Deal Suffers Legal Setback
-----------------------------------------------------
Darlene Investments LLC ("Darlene"), a significant minority
shareholder in DirecTV Latin America, filed Tuesday a lawsuit
against News Corporation (NYSE: NWS), DirecTV Group, Inc. (NYSE:
DTV) and their affiliates for fraud and violation of fiduciary,
contractual and other duties in connection with recently
announced transactions in Latin America. Darlene is seeking to
enjoin DirecTV and DirecTV Latin America from implementing the
recently announced transactions that seek to reorganize and
combine DirecTV Latin America with News Corp. affiliates Innova
S. de R.L. de C.V., Sky Brasil Servicos Ltda. and Sky Multi-
Country Partners ("the Sky transactions"). The lawsuit is also
seeking more than $1 billion in damages for fraud committed by
News Corp. and DirecTV prior to the transactions. The suit was
filed in the Circuit Court of the 11th Judicial Circuit in and
for Miami-Dade County, Florida.

The suit alleges that, following a long history of self-dealing
transactions that improperly benefited DirecTV and repeatedly
threatened DirecTV Latin America's prospects and viability, News
Corp. and DirecTV agreed to these Sky transactions in total
disregard for the interests of Darlene in order to be released
from covenants not to compete in Latin America that News Corp.
had previously signed with the Sky entities. News Corp. had
breached these covenants when it acquired its controlling
interest in DirecTV in late 2003.

The suit also charges that the proposed transactions between
DirecTV and Sky are designed primarily to deliver improper
benefits to News Corp. and its partners by grossly undervaluing
the assets of DirecTV Latin America. News Corp. is a major
investor in Sky Latin America and is the largest investor in
DirecTV.

The suit charges that News Corp. and DirecTV purposely misled
the US Bankruptcy Court and Darlene with respect to their future
commitment to the success of DirecTV Latin America.
Specifically, the allegations explain that DirecTV presented the
Sky transactions to the DirecTV Board of Directors Audit
Committee in January 2004 --before DirecTV Latin America's
emergence from bankruptcy -- but concealed this fact from
Darlene. The suit alleges that while News Corp.'s current
subsidiaries were telling a U.S. Bankruptcy Court and Darlene
that they would grow and enhance DirecTV Latin America, News
Corp., DirecTV and DirecTV's Audit Committee knew exactly the
opposite was true. The suit asserts that in fact the defendants
were planning a transaction designed to deliver vast benefits to
News Corp. and its partners while inflicting critical harm to
DirecTV Latin America and Darlene.

The lawsuit contains specific allegations concerning the
significant benefits to be delivered under the proposed
transactions to Grupo Televisa, Globo and other Sky partners in
exchange for not enforcing News Corp.'s covenants not to
compete. In each case, Darlene asserts that the proposed
transactions improperly cause DirecTV Latin America to subsidize
these benefits by shifting value to News Corp. and its partners,
and that News Corp. sacrificed the interests of DirecTV Latin
America in order to enrich itself and escape the consequences of
its covenants not to compete.

Darlene's complaint references independent financial reports
available to DirecTV that support its allegations. Multiple
financial analyses performed by external advisors including
Lazard, Morgan Stanley, Alix Partners, Citigroup and a DirecTV
bankruptcy debt-equity valuation, as well as a valuation
performed by DirecTV itself, valued DirecTV Latin America at
over $1 billion, while the transactions agreed to with Sky and
affiliates reflect a valuation of approximately $217 million.

Defendants

The DirecTV Group, DirecTV Latin American Holdings, Inc.,
DirecTV International Holdings, Inc., The News Corporation Ltd.,
Sky Multi-Country Partners, Innova S. de R.L. de C.V., Globo
Comunicacoes e Participacoes, S.A., and Grupo Televisa, S.A.

About Darlene Investments LLC

Darlene Investments LLC is a limited liability company that
holds a preferred 14.1% interest in DirecTV Latin America.

CONTACT: Michael Buckley, Diana Drobiner, Brunswick Group, +1-
212-333-3810, for Darlene Investments LLC


EMBRATEL: Staying the Course Despite Weak 3Q Results
----------------------------------------------------
Despite ending in the red in the third-quarter, Brazilian phone
company Embratel will not be changing its strategy of
stabilizing long-distance revenues and further diversifying into
local and data services for corporations, Dow Jones Newswires
reports, citing company executives.

Early this week, Embratel, Brazil's largest long-distance
operator, reported a third-quarter net loss of BRL66.6 million
($1=BRL2.879). The result was considerably worse than markets
expected, due to a surprise BRL107-million provision for
possible tax and labor liabilities. Executives warned further
provisions may impact fourth-quarter results as well.

The management team believes that the way to recovery is through
an increase in revenues and not just the normal post-acquisition
route of cutting costs. Embratel was recently acquired by phone
giant Telefonos de Mexico SA de CV (Telmex).

Specifically, the company wants to stabilize long-distance
revenues and increase local and data services, primarily from
more sales to existing customers and bringing back former
clients, mainly in the corporate market.

"Execution is not just a cost-cutting service, we must increase
revenues," said Embratel Director General Jose Formoso Martinez.
"There is no miracle in a company like this. It will take a
while to see all the benefits, but it will come, quarter by
quarter."

Executives also extinguished hopes that Telmex might help
Embratel lower financing costs via debt guarantees.

"The concept of Telmex is to have each company - in our case
Embratel - on a stand-alone basis in terms of funding from the
market with no Telmex support," said Embratel Vice-president
Isaac Berensztejn.

Embratel plans to refinance up to US$600 million of debts by the
end of the year. One of the first tasks for the new Telmex-
linked management team is to prepay some BRL1.2 billion of debts
from a March 2003 restructuring deal, now viewed as an expensive
burden.

"At that time, given the lack of financing options for Brazil,
Embratel had to refinance at very high cost," said Berensztejn.
"The company now has the opportunity to refinance at a lower
cost."

Embratel was able to reduce its net debt to BRL2.8 billion at
the end of the third quarter of 2004.

To view financial statements:
http://bankrupt.com/misc/Emb3Q.pdf

CONTACT: Embratel Participacoes S.A.
         Rua Regenta Feijo
         166 sala 1687-B Centro
         Rio de Janeiro, 20060-060
         Brazil
         Phone: 5521-519-6474
         Website: http://www.embratel.net.br


GERDAU: To Proceed With Mill Construction
-----------------------------------------
Gerdau SA, Latin America's largest steelmaker, announced Monday
that it will invest BRL750 million in a steel mill near Sao
Paulo to take advantage of rising demand. Porto Alegre, Brazil-
based Gerdau said it will go ahead with the construction of a
mill with annual capacity of 1.3 million metric tons of steel.
The plant in Aracariguama, Brazil, 50 kilometers (30 miles) from
Sao Paulo, will start operation in May 2005 making 900,000 tons
per year of structural steel for customers in Sao Paulo state.

The investment will take place in two phases. Gerdau will first
invest BRL500 million between now and 2006 to bring the plant to
an annual capacity of 900,000 tons of steel and 600,000 tons of
rebars. Until early 2006, steel produced at the plant will be
rolled into rebars at other Gerdau plants nearby.

Gerdau said 20% of the initial investment will come from its own
cash flow, while 25% will be financed privately and 55% will be
financed by Brazil's state lender, the national development
bank.

In a second phase, Gerdau will invest another BRL250 million to
bring the plant to full projected capacity. The company didn't
say when the second phase would begin or end.


USIMINAS: S&P Raises Local Currency Rating To 'BB'
--------------------------------------------------
Standard & Poor's Ratings Services raised its local-currency
corporate credit rating on Usinas Siderurgicas de Minas Gerais
S.A. - Usiminas to 'BB' from 'BB-'. At the same time, Usiminas'
'BB-' foreign-currency corporate credit rating was affirmed. The
outlook for both the local- and foreign-currency rating is
stable.

"The local-currency rating action reflects the significant
improvement in Usiminas' financial condition in 2004, resulting
from the company's efforts to reduce its exposure to refinancing
risk and short-term debt," said Standard & Poor's credit analyst
Reginaldo Takara.

The local-currency corporate credit rating on Usiminas reflects
its exposure to the volatile and cyclical steel industry, which
despite its very favorable upturn has faced considerably
stressful conditions in recent past years; its degree of
reliance on the volatile economic and operating environment of
its home market Brazil (to which a substantial portion of its
production is shipped); increasing competition within the
Brazilian steel industry; and potential export restrictions
elsewhere in the world (which in a way undermines the company's
ability to fully benefit from its very strong cost position).

These risks are partly offset by Usiminas' improving financial
profile, thanks to the significant debt reduction accomplished
in 2004 and further decreases projected until the end of this
year; a fair business profile, made evident by a very
competitive cost structure (resulting from easy access to raw
materials and streamlined and modern production facilities);
resilient operating profitability and robust free cash
generation through economic cycles (today essentially freed up
to pay off debt); and a very favorable market position in the
fairly concentrated flat carbon steel sector in Brazil, in
particular in the higher-end, quality-products segments.

The stable outlook on the local-currency corporate credit rating
reflects Standard & Poor's expectations that Usiminas will be
able to sustain adequate operating profitability and preserve
free operating cash generation in 2004 and 2005 to keep up the
pace of debt reduction and credit measures improvement. The
outlook also incorporates the expectation that Usiminas will
manage to sustain little exposure to short-term debt vis-a-vis
projected free cash flow and cash reserves, under the assumption
that global steel market conditions and the economic environment
in Brazil remain benign at least until early 2005. The rating
could come under downward pressure if management's commitment to
prudent financial management slips and Usiminas fails to
continue reducing short-term debt or to achieve financial
metrics that support the 'BB' rating, such as total debt to
EBITDA lower than 2x and FFO to debt higher than 35%.

The stable outlook on the foreign-currency corporate credit
rating reflects the outlook on the foreign-currency sovereign
rating on the Federative Republic of Brazil.



===================================
D O M I N I C A N   R E P U B L I C
===================================

AES CORP.: In Violation of DR's Electricity Law
-------------------------------------------------
The AES Corporation, which operates 876 megawatts of production
in the Dominican Republic, is said to be violating electricity
law. Local daily Diario Libre reports that the company's power
plants supply 50% of the electric demand. This clearly violates
Art. 11 of Electricity Law 125-01, which caps a limit on
companies participating as distributors to generate and sell in
the market 15% of the national demand.

The report also reveals that AES has a lower production cost due
to the fact that its plants are powered by natural gas.

Nevertheless, the newspaper says that the company's generation
division sells to the company's distribution affiliate at a
higher price than that which is established by the market for
this type of generation.

According to the report, the Superintendence of Electricity has
never prevented this type of verticality within the system nor
has the present government shown any indication of correcting
this flouting of the law.



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

GRUPO DESC: Sales, Exports Up 15% YoY; EBITDA Improves
------------------------------------------------------
DESC, S.A. de C.V. (NYSE: DES; BMV: DESC) announced Tuesday its
results for the third quarter ended September 30, 2004 (3Q04).

HIGHLIGHTS:

- Sales and exports were both 15.0% higher when compared to
3Q03. For the first nine months of 2004 compared to the first
nine months of 2003, the increases were of 11.8% and 13.2%,
respectively.

- Operating income increased 84.5% compared to 3Q03, reaching
US$24 million, which was a 101.7% increase for the first nine
months of 2004 versus 2003.

- EBITDA reached US$51 million, representing an increase of
17.7% compared to 3Q03 and up 23.5% for the first nine months of
2004 versus 2003.

- In the Food and Chemical Sectors, volume and sales prices
increased, which partially offset the rise in raw material
costs.

- Desc reported a US$5 million net profit, which it had not been
achieved in the last four quarters.

- During 2004, net debt decreased US $287 million, from US$990
million to US$703 million.

Sales and Exports:

During 3Q04, dollar-denominated sales increased 15.0% compared
to 3Q03, from US$465 million to US$535 million, mainly as a
result of higher revenues in the Automotive, Chemical and Food
Sectors.

Total exports for 3Q04 reached US$246 million, representing an
increase of 15.0% compared to 3Q03. The main drivers were the
increases in export sales in the Automotive, Chemical and Food
sectors, which were 2.7%, 34.4% and 5.9% higher compared to
3Q03.

Operating Income:

Consolidated operating income in dollars for 3Q04 increased by
84.5% when compared to 3Q03 reaching US$24 million. This
increase in the operating income is the result of a strict
control of expenses, which decreased from US $93 million in 3Q03
to US $79 million in 3Q04, as well as Desc's efforts to offset
the rise in raw material costs with increases in the
productivity and increase in prices (Chemical Sector).

EBITDA:

Consolidated EBITDA in dollars for 3Q04 totaled US$51 million.
This represents an increase of 17.7% compared to 3Q03, which
reflects improvements in most of the sectors' results. In
addition, it demonstrates that results have stabilized during
the last three consecutive quarters, despite the increase in raw
materials costs such as steel, natural gas, butadiene and
styrene.

Net Income:

Desc reported a US$5 million net profit, which it had not been
achieved in the last four quarters, mainly due to higher
operating income, lower financing costs and lower taxes.

Debt Structure:

During 3Q04, Desc's net debt declined by US$30 million compared
to 2Q04, from US$733 million to US$703 million, representing a
decrease of 4.1%. For the first nine months of 2004, net debt
decreased US$287 million, from US$990 million to US$703 million,
mainly due to the capital increase, improvements in the
operating cash flow, important efforts to control working
capital, lower financing costs and lower taxes.

As of September 30, 2004, the total debt mix was 61% dollar-
denominated, 11% peso-denominated and 28% in UDIS. The debt
profile at the close of 3Q04 was 95% long-term and 5% short-
term.

The average cost of debt as of this date was 5.14% for the
dollar-denominated debt and 9.27% for the peso denominated debt,
compared to 5.0% and 7.4%, respectively in 3Q03. Financial
expenses for 3Q04 were US$11 million, representing a decrease of
US$7 million compared to 3Q03 due to the decrease in debt
levels.

Key Events

Shareholders' Meetings

At two shareholder meetings held on October 19, 2004, the
shareholders of Desc approved a proposal to, among other things:

- delist the ADSs from the New York Stock Exchange (the "NYSE");

- terminate the registration of the Series B Shares and ADSs
under the Securities Exchange Act of 1934,as amended;

- terminate the Amended and Restated Deposit Agreement, dated
June 29, 1994, as amended, by and among Desc, Citibank, N.A., as
the depositary (the "Depositary"), and the holders of the
American Depositary Receipts ("ADRs") evidencing American
Depositary Shares ("ADSs") issued thereunder (the "Deposit
Agreement");

- cancel the registration of the Series B Shares in the special
section of the Mexican Securities Registry (collectively, the
"Resolution");

The Resolution was based on the following principal factors:

- the fact that the number of Series B Shares represented by
ADSs has remained very small (comprising only approximately
1.09% of the total outstanding Series B Shares and 0.53% of the
total capital stock Series "A" and Series "B" Shares- as of
September 30, 2004);

- the limited trading volume on the NYSE of the ADSs (the
average daily trading volume for the nine months ended September
30, 2004 was 4,155 ADSs);

- the fact that Desc has no plans to access the U.S. public
capital markets as a source of capital;

- the significant regulatory burden and expense of maintaining a
registration in the U.S. and a listing on the NYSE;

- the continuing availability of a trading market for the Series
B Shares provided by Desc's ongoing listing on the Mexican Stock
Exchange; and

- the conclusion that the benefits to Desc and its stockholders
in maintaining a U.S. trading market are outweighed by the costs
and other burdens at the present time.

Further information will be provided shortly regarding the
timing and procedures in respect of the delisting and
deregistration.

RESULTS BY SECTOR

Automotive Sector:

During 3Q04 dollar-denominated sales increased 5.8% compared to
3Q03 due to higher demand for heavy truck components in the
transmission business for GM and Ford; higher sales for the
Tractor project related to the cardan shaft, forge and axle
businesses and the gear business in the manufacture of parts for
Dana.

The aforementioned was able to offset the scheduled downtime in
some of the OEMs such as Renault-Nissan and GM in order to lower
inventory levels, as well as the strike at the Volkswagen plant
in Mexico, which impacted Desc's constant velocity joint and
stamping & wheel businesses.

Exports were US$121 million, which represents a 2.7% increase
compared to the same period of the previous year due to the
Tractor Project and the gear and transmission businesses.

During 3Q04, operating income in dollars registered an
improvement from a break-even point in 3Q03 to US$2 million,
despite the dramatic increase in the price of steel. These price
increases were partially offset by aggressive productivity
programs.

The lack of supply of steel at the global level generated higher
distribution costs (air and land freight) in order to fulfill
client requirements. In September 2004 the year-to-date increase
in the price of steel was of approximately 40%. However, the
Company has been able to maintain the required production
supply, and continues negotiating with clients regarding this
situation.

Despite the aforementioned, EBITDA for 3Q04 was US$16 million,
9.1% lower than in 3Q03.

During 3Q04, the average capacity utilization rate increased to
59% compared to 54% registered for the same period of the
previous year, due to an increase in the gear, front and rear
axles, iron casting foundry, propeller shafts and universal
joints businesses.

Chemical Sector:

Sales for 3Q04 reached US$218 million; an increase of 33.8%
compared to sales for 3Q03, due to higher volumes in all of
Desc's chemical businesses, as well as increased prices. In
addition, exports increased by 34.4%.

The main raw material costs continued to increase due to rising
oil prices, which have reached historic highs (over US$50 per
barrel), and the scarcity of butadiene monomer in the
international market due to the supply-demand imbalance. This
situation has been worsened by the temporary shutdown of one of
Repsol's production units, which has also caused prices to
increase. Despite these issues, as well as the depreciation of
the peso-dollar exchange rate and the appreciation of the Euro
compared to the U.S. dollar, the Company experienced excellent
results, surpassing operating income by nearly 100% compared to
3Q03.

The higher operating margins are fundamentally due to stricter
controls of operating expenses, as well as an improvement in
operating efficiency and the increase in sales volumes.

The combination of the previous factors resulted in an EBITDA
increase of 52.5% during 3Q04 compared to 3Q03, notably from the
contribution of the phosphate, carbon black, synthetic rubber
and acrylic businesses.

Food Sector:

Branded Products

During 3Q04, sales increased 3.2% with respect to 3Q03 due to
higher sales volumes in practically all product lines, notably:
"Del Fuerte" brand tomato paste with an 18% increase over 3Q03,
an excellent performance in powdered beverages "Zuko" and
"Livean" which continue growing successfully with increases in
volume of 75% and 224%, respectively, as well as an increase in
prices, primarily in tuna (25%), but also increases in all of
categories above the rate of inflation. The above has
compensated for the rise in packaging, fish and oil costs.

Another positive factor was the launch of Project "Revolution"
regarding Tetra-Recart packaged vegetables which conserve
nutritional properties, do not contain preservatives and places
the business at the forefront regarding technology we operate
the first plant in Latin America with this packaging technology.
The launch of the new line of Del Fuerte vegetables marks the
beginning of a new era in the healthy foods category.

In ASF, our U.S. business, the supermarket channel as well as
the institutional channel registered an excellent performance
thanks to the turn-around of the North American economy in
relation to 3Q03, as well as an improved product mix with better
pricing and margins.

Operating income and EBITDA had significant increases of 58.9%
and 29.4%, respectively, compared to 3Q03. This is attributed to
improved sales, improved costs from plant efficiency, the use of
fresh tomatoes and excellent tuna sales, in addition to positive
changes in operations and the strict control of expenses that
compensated for the increases in raw materials and packaging.

Pork Business

During 3Q04 sales registered an increase of 30.4% with respect
to 3Q03 due to better pork prices, as well as an improved
product mix with greater export sales.

Pork prices continued their upward trend during 3Q04, increasing
25.5% compared to the previous year, which has compensated
significantly for the increase in the costs of grain and soy
paste, resulting in an important improvement in operating margin
from 3.1% in 3Q03 to 15.1% in 3Q04, as well as an increase of
193% in EBITDA generation. Another positive effect was the
improved sales in the export market due to higher demand from
Japan. The capacity utilization rate remains at 100% in the
southeast region.

Real Estate Sector:

Sales in 3Q04 reached US$31 million, which represents a decrease
of 14.4% compared to sales for 3Q03. This reduction is due to
lower sales in the Bosques de Santa Fe project.

Sales for 3Q04 were distributed as follows:
- Punta Mita 72.9%
- Corporativo Arcos Bosques 24.9%
- Bosques de Santa Fe 2.2%

In this period Desc registered an operating profit of US$5
million and an EBITDA level of US$6 million, both of which were
lower than those obtained during 3Q03, due to the sales mix.

The Punta Mita project continues enjoying excellent acceptance
in the market. In the third quarter Desc finalized the sale of 8
beachfront lots, one golf course lot and a lot to be used in the
development of a Hotel.

In the Arcos Bosques complex, the final two remaining lots were
sold.

In Bosques de Santa Fe one single-family lot was sold for US$0.7
million.

To view financial statements:
http://bankrupt.com/misc/DESC3Q.pdf

NOTES:

Except as noted, all figures were prepared according to
generally accepted accounting principles in Mexico (Mexican
GAAP).

Unless otherwise noted, the results in this report are being
compared to adjusted 3Q03 figures which are pro forma because
they exclude the results for Desc's aluminum wheel and adhesive
and sealant businesses. Management believes that investors can
better evaluate and analyze Desc's historical and future
business trends on a comparative basis if they consider results
of operations without these divested businesses.

In addition, the results for 3Q03 are stated at the peso-dollar
exchange rate of September 2004 as well as in dollars.

CONTACTS: Ms. Marisol Vazquez-Mellado
          Mr. Jorge Padilla
          Phone: (5255) 5261 8000
          e-mail: investor.relationdesc.com.mx


HYLSAMEX: Excellent 3Q04 Performance To Boost Parent's Results
--------------------------------------------------------------
A group of seven analysts surveyed by Reuters expect a boost on
the financial performance of Mexican industrial conglomerate
Grupo Alfa due to an anticipated brilliant performance by its
local steel subsidiary Hylsamex.

Hylsamex, Mexico's third-largest steelmaker, reported
preliminary figures for the third-quarter of 2003, showing
Ebitda of US$232 million, five times that reported for 3Q03. At
the same time, the company has slashed its debts from US$867
million at the end of the second-quarter this year to US$587
million at the end of the third-quarter.

Alfa (BMV: ALFAA) is expected to bring in net profits of some
MXN1.5 billion (US$131mn) for the third-quarter, compared to
MXN92 million for the same period last year, according to the
survey.

CONTACT:  Othon Diaz Del Guante
          (52-81) 8865-1240
          E-mail: odiaz@hylsamex.com.mx

          Ismael De La Garza
          (52-81) 8865-1224
          E-mail: idelagarza@hylsamex.com.mx


TFM: Tax Exemption Confusion May Impact Results
------------------------------------------------
Uncertainty over TFM's continuing exemption from the IEPS
(Impuesto Especial sobre Produccion y Servicios) could severely
impact the Company's growth prospects, said General Manager
Mario Mohar in a report from El Financiero. The cargo railway
company saves an estimated US$30 - US$50 million, equal to its
fuel expenditures, from the IEPS incentive. However, the tax
exemption has to be renewed annually.

This year, TFM has earmarked investments of US$80 million to
improve its services. The Company is currently negotiating with
maritime transportation companies to bring Asian cargo from the
Lazaro Cardenas terminal to the U.S. A successful deal could
increase the Company's share in the Mexican freight market to 16
percent.

TFM needs to secure new contracts to compensate for the slowdown
in the domestic automotive industry that had contributed 22
percent of its revenues in the past.

TFM expects to post a 7 to 8 percent growth in cargo turnover by
the end of the year and hopes that the improved performance
could help curb the US$900 million debt of its parent TMM.



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

BELLSOUTH VENEZUELA: Ordered to Pay $403M to Grupo Cisneros
-----------------------------------------------------------
Venezuela arbitrators ordered the local subsidiary of US telco
BellSouth (NYSE: BLS) to pay Grupo Cisneros some US$403 million,
reports Business News Americas. The payment is linked to Grupo
Cisneros' 11.1% share in mobile operator Telcel. The arbitrators
said BellSouth Venezuela is obliged to pay for Grupo Cisneros'
stake in Telcel under conditions established by a shareholders'
agreement.

The ruling comes ahead of an anticipated takeover of operations
of BellSouth Venezuela by Spain's Telefonica Moviles (NYSE:
TEM).

Grupo Cisneros holds a 21.8% share in Telcel, which is 78%-owned
by BellSouth, which will only be forced to pay for the 11.1%
share and will receive US$150 million from Telefonica Moviles
for the additional participation in Telcel.

BellSouth and Telefonica Moviles recently completed the transfer
of wireless operations in Ecuador, Guatemala and Panama as part
of the US$5.9-billion takeover announced earlier this year.



                            ***********


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

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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