TCRLA_Public/041112.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

         Friday, November 12, 2004, Vol. 5, Issue 225

                            Headlines

A R G E N T I N A

ASKING EDITORES: Court Issues Liquidation Order
ASOCIACION MUTUAL: Court Orders Liquidation
AUREA S.R.L.: Court Designates Trustee for Bankruptcy
AUSOL: Reports Higher Net Profit Following Debt Restructuring
CORREO ARGENTINO: Bankruptcy Status Revoked by Court

CRESUD: Board OKs Dividend Payment
EDENOR: Opens Debt Buyback
IGUAZU PARK: Initiates Bankruptcy Proceedings
INDUSTRIALATINA.COM S.A.: Court Allows Reorganization
IRSA: Pays Interest on Convertible Notes

LOMA NEGRA: Meets With Camargo Correa to Discuss Sale
MD 51 EDITORES S.R.L.: Court Resets Liquidation Schedule
MORON METALES: Court Approves Creditor's Bankruptcy Motion
QUEMAG S.A.: Liquidates Assets to Pay Debts
RURALNET S.A.: Begins Liquidation Proceedings

SIDECO AMERICANA: Posts ARP65.1 Mln Net Loss for 9-Month Period
TELECOM ARGENTINA: Reports Lower Net Loss for 3Q04
* ARGENTINA: Presents Debt Swap Prospectus to Italy


B A H A M A S

ULTRAPETROL BAHAMAS: Ratings Not Affected by $180M Debt Issuance


B E R M U D A

GLOBAL CROSSING: Lands IT Contract With Top Mexican Law Firm
LATIN AMERICAN CAPITAL: Robin Mayor to Serve as Liquidator


B R A Z I L

BANCO VOTORANTIM: To Issue $50M Eurobonds in Local Currency
BRASKEM: Expects to Gain BRL60 Mln at Year-End with Braskem+
ELETROPAULO METROPOLITANA: Profits Evaporate Year on Year
NET SERVICOS: Net Revenues Rise 5.7% From Last Quarter
USIMINAS: Provides Update on COSIPA Public Offering


C H I L E

AES GENER: Declares Earnings of CLP39 Mln for 3Q04


C O L O M B I A

ECOPETROL: Fitch Affirms Ratings at 'BB'
* COLOMBIA: S&P Assigns 'BB' Rating Treasury Bonds


E L   S A L V A D O R

* EL SALVADOR: IMF Staff Mission Statement



M E X I C O

AXTEL: Injects $40M in Tijuana Operation
GALEY & LORD: Completes Sale to Patriarch Partners
GRUPO DESC: S&P Issues Ratings Update
PEMEX: Nine-Month Results Show $1.3B Net Loss


P E R U

NUEVO CONTINENTE: Added to U.S. Drug Trafficker List

U R U G U A Y

ANCAP: Moody's Affirms B3 Foreign Currency Issuer Rating
* URUGUAY: Moody's Changes Ratings Outlook to Stable From Neg.

     -  -  -  -  -  -  -  -

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

ASKING EDITORES: Court Issues Liquidation Order
-----------------------------------------------
Publishing outfit Asking Editores S.A. entered bankruptcy after
Judge Villanueva of Buenos Aires' civil and commercial Court no.
23 approved a bankruptcy motion filed by Massuh S.A., says La
Nacion.

Working with Dr. Ovadia, the city's Clerk no. 45, the Court
assigned Mr. Emilio Reboiras 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 2.

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: Asking Editores S.A.
         Uruguay 651
         Buenos Aires

         Mr. Emilio Reboiras, Trustee
         Lavalle 1882
         Buenos Aires


ASOCIACION MUTUAL: Court Orders Liquidation
-------------------------------------------
Buenos Aires-based Asociacion Mutual Una Luz Azul en el Camino
proceeds to wind-up its operations following the bankruptcy
pronouncement issued by Court No. 26 of the city's civil and
commercial tribunal. The declaration effectively prohibits the
Company from administering its assets, control of which will be
transferred to a Court-appointed trustee.

Infobae reports that the Court appointed Mr. Pablo Kainsky as
trustee. He will be reviewing creditors' proofs of claims until
December 28. The verified claims will be the basis for the
individual reports to be presented for Court approval on March
10, 2005. Afterwards, the trustee will also submit a general
report on April 25, 2005.

Clerk no. 51 assists the Court on this case that will end with
the disposal of the Company's assets to pay its liabilities.

CONTACT: Asociacion Mutual Una Luz Azul en el Camino
         Rio Cuarto 2250
         Buenos Aires

         Mr. Pablo Kainsky, Trustee
         Reconquista 715
         Buenos Aires


AUREA S.R.L.: Court Designates Trustee for Bankruptcy
-----------------------------------------------------
Buenos Aires accountant Jaime Luis Jeiman was assigned trustee
for the bankruptcy proceedings of local Company Aurea S.R.L.,
relates Infobae.

The trustee will verify creditors' claims until December 17, the
source adds. After that, he will prepare the individual reports,
which are to be submitted to the Court on March 3, 2005. The
general report submission should follow on April 13, 2005.

The city's civil and commercial Court No. 9 holds jurisdiction
over the Company's case. Clerk no. 18 assists the Court with the
proceedings.

CONTACT: Aurea S.R.L.
         Gregorio Laferrere 2254
         Buenos Aires

         Mr. Jaime Luis Jeiman, Trustee
         Lavalle 1312
         Buenos Aires


AUSOL: Reports Higher Net Profit Following Debt Restructuring
-------------------------------------------------------------
The conclusion of Autopistas del Sol's (Ausol) debt-
restructuring process resulted to a large increase in the
Argentine tollroad operator's net profit in the first nine-
months of the year.

Citing a statement to the country's securities regulator (CNV),
Business News Americas reports that Ausol posted a net profit of
ARS158 million (US$53.8mn) for the first nine months of 2004, up
611% from the same period last year.

Revenue for the period grew 12.6% to ARS114 million and
operating profit rose 2.9% to ARS29.9 million.

Earlier this year, Ausol completed an out-of-Court debt
restructuring, known in Spanish as an APE. Of Ausol's US$490
million debt burden, creditors representing 99.66% signed onto
the deal.

The completion of the Company's debt restructuring followed the
passage of the country's economic emergency law in 2002. The law
eliminated US dollar-indexed rates, said the filing, adding that
98% of the tollroad's financial debt was in US dollars.

Ausol, which operates 95km of Buenos Aires province's northern
access road and 24km of the General Paz avenue, said its efforts
are now concentrated on reaching an agreement with the
government regarding its concession contract.

Ausol is controlled by a private consortium headed by Sideco
Americana S.A. (SDA.YY).


CORREO ARGENTINO: Bankruptcy Status Revoked by Court
----------------------------------------------------
Sideco Americana (SDA.YY) announced Tuesday that an Argentine
commercial appeals Court has revoked the bankruptcy status of
its local unit, the former postal service operator Correo
Argentino.

Dow Jones reports that the ruling grants a request by Correo
Argentino, the International Finance Corporation (IFC) and the
Inter-American Development Bank.

The IFC is the private equity arm of the World Bank and a
shareholder in Correo Argentino, which had been declared
bankrupt in December.

Media reports suggest that the judge's decision to revoke the
bankruptcy opened a "cramdown" process that will give the
Company time to reach an agreement with creditors.

Correo Argentino has ARS900 million ($1=ARS2.97) in debt and the
government claims a debt of ARS450 million, though the former
concessionaire says the state owes it money.

Correo Argentino became the world's first fully privatized
postal service in 1997. The Argentine government rescinded the
Company's contract in November 2003 and the service remains in
state hands.


CRESUD: Board OKs Dividend Payment
----------------------------------
Cresud S.A.C.I.F. y A. reported Tuesday that in accordance with
the ordinary and extraordinary general shareholders meeting held
on October 22, 2004 and in accordance with the resolution
adopted by the board of directors in its meeting held on
November 3, 2004, the Company resolved to put at the
shareholders' disposal the distribution of the cash dividend
with charge to the financial statement closed on June 30, 2004
in an unique payment, subject to the following conditions:

Payment commencement date: November 17, 2004

Payment domicile: Caja de Valores S.A. 25 de Mayo 362 Capital
Federal

Payment hours: From 10:00 a.m. to 3:00 p.m.

Amount approved by the shareholders meeting: $3,000,000

Percentage of the dividend over the principal: The distribution
shall be calculated over the share capital in circulation at
October 31, 2004 of $151,285,377 (which means 1.98300 %) and in
a relation of $ 0.01983007 per share of nominal value V$N1 each
and $ 0.19830073 per ADR.

The Company stated that in accordance with the issuance and
conversion conditions of the Notes, the only ones that have the
right to the dividend payment are the Company's shares in
circulation and those Notes that were convertible into shares to
the date of the shareholders meeting, excluding any other kind.

CONTACT: Cresud S.A.C.I.F. y A
         Av. Roque Saenz Pena 832
         8th Fl.
         Buenos Aires
         Argentina
         Phone: 001-54-1-3287808


EDENOR: Opens Debt Buyback
--------------------------
Argentine power distributor Edenor launched Wednesday, Nov. 10,
a cash buyback offer for outstanding debt, reports Dow Jones
Newswires. The buyback, a modified Dutch auction with price
ranges between US$700 and US$750, applies to Series 2A floating
rate bonds with a 2003 maturity, "GAIN" trust notes with a 2005
maturity and other credit lines. J.P. Morgan Securities Inc. in
New York is organizing the offer, which closes on Dec. 10.

Edenor, which has the power distribution concession for half of
Buenos Aires city, had approximately US$420.2 million in total
debt as of Sept. 30, 2004.


IGUAZU PARK: Initiates Bankruptcy Proceedings
---------------------------------------------
Court no. 16 of Buenos Aires' civil and commercial tribunal
declared Iguazu Park S.A. "Quiebra," reports Infobae.

Mr. Francisco Napoli, who has been appointed as trustee, will
verify creditors' claims until November 26 and then prepare the
individual reports based on the results of the verification
process. The individual reports will then be submitted in Court
on February 10, 2005 followed by the general report on March 24,
2005.

Clerk no. 32 assists the Court on the case that will close with
the liquidation of the Company's assets to repay creditors.

CONTACT: Mr. Francisco Napoli, Trustee
         Avda Callao 67
         Buenos Aires


INDUSTRIALATINA.COM S.A.: Court Allows Reorganization
-----------------------------------------------------
Industrialatina.com S.A. will proceed with reorganization after
a Buenos Aires Court converted the Company's ongoing bankruptcy
case into a "concurso preventivo", states Infobae.

Under Insolvency protection, the Company will be able to draft a
proposal designed to settle its debts with creditors. The
reorganization also prevents the Company's outright liquidation.

Mr. Nestor Agustin Iribe, the Court-appointed trustee, will
verify creditors' proofs of claims until December 17. Creditors
with unverified claims cannot participate in the Company's
settlement plan.

The trustee will also submit Individual Reports on March 2, 2005
and a General Report on April 18, 2005.

CONTACT: Mr. Miguel Angel Loustau, Trustee
         Viamonte 993
         Buenos Aires


IRSA: Pays Interest on Convertible Notes
----------------------------------------
IRSA INVERSIONES Y REPRESENTACIONES S.A. CONVERTIBLE NOTES IN A
PRINCIPAL AMOUNT OF US$ 100,000,000, DUE 2007

IRSA Inversiones y Representaciones S.A. informs that, on
November 14, 2004, it started the payment to the holders of the
fourth installment of interests related to the Convertible Notes
issued on November 14, 2002.

Payment Agent: The Bank of New York.

Payment date: November 14, 2004

Payment hours: From 10:00 a.m. to 3:00 p.m.

Installment number: fourth installment of interests

Period comprised by the payment: May 14, 2004/November 14, 2004

Concept of payment: Interests (100%)

Payment currency: United States Dollars

Capital Outstanding: US$87,055,920

Annual Nominal Interest: 8.00%

Amount of interests being paid: US$ 3,482,236.8

The interests will be paid to the people who were registered,
with the Register Agent, as holder of the Convertible Notes, on
November 1, 2004.

CONTACT: IRSA Inversiones y Representaciones S.A.
         Bolivar 108
         Buenos Aires
         Argentina
         Phone: 541-342-7555


LOMA NEGRA: Meets With Camargo Correa to Discuss Sale
-----------------------------------------------------
Argentine cement Company Loma Negra is now in sale talks with
Camargo Correa Cimentos, a cement subsidiary of the Brazilian
holding Camargo Correa, El Clarin reports, citing a Loma Negra
source.

Loma Negra, Argentina's largest cement Company, was forced to
put itself on the block due to financial pressure. J.P. Morgan
Chase & Co. has been hired to act as adviser to the transaction.

The Company, which is controlled by Argentina's richest woman,
Amalia Lacroze de Fortabat, had been talking about a preliminary
sale figure of US$1 billion.


MD 51 EDITORES S.R.L.: Court Resets Liquidation Schedule
--------------------------------------------------------
Court no. 18 of Buenos Aires' civil and commercial tribunal
moved key events in the Liquidation of MD 51 Editores S.R.L. to
these dates:

1. Claims Verification Deadline - December 17, 2004
2. Submission of Individual Reports - March 2, 2005
3. Submission of the General Report - April 18, 2005

All proofs of claims should be forwarded to Court-appointed
trustee Nestor Agustin Iribe for authentication by the said
deadline.

Infobae reports that clerk no. 36 assists the Court on this
case.

CONTACT: MD 51 Editores S.R.L.
         Vera 564
         Buenos Aires

         Mr. Nestor Agustin Iribe, Trustee
         Avda Corrientes 1250
         Buenos Aires


MORON METALES: Court Approves Creditor's Bankruptcy Motion
----------------------------------------------------------
Judge Ballerini, serving for Court no. 12 of Buenos Aires' civil
and commercial tribunal, declared Moron Metales Sacim bankrupt,
says La Nacion. The ruling comes in approval of the petition
filed by the Company's creditor, Obra Social de Supervisores.

The Court's trustee, Mr. Humberto Zaina, will examine and
authenticate creditors' claims until December 31 this year. This
is done to determine the nature and amount of the Company's
debts. Creditors must have their claims authenticated by the
trustee by the said date in order to qualify for the payments
that will be made after the Company's assets are liquidated.

Dr. Medina, clerk no. 47, assists the Court on the case that
will conclude with the liquidation of the Company's assets.

CONTACT: Moron Metales Sacim
         Avenida Callao 1243
         Buenos Aires

         Mr. Humberto Zaina, Trustee
         Esmeralda 320
         Buenos Aires


QUEMAG S.A.: Liquidates Assets to Pay Debts
-------------------------------------------
Quemag S.A. will begin liquidating its assets following the
bankruptcy pronouncement issued by Court no. 21 of the city's
civil and commercial tribunal.

The ruling places the Company under the supervision of trustee
Silvana Noemi Cirigliano. The trustee will verify creditors'
proofs of claims until February 16, 2005. The validated claims
will be presented in Court as individual reports on March 30,
2005.

Ms. Cirigliano 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 May 11, 2005.

CONTACT: Ms. Silvana Noemi Cirigliano, Trustee
         San Luis 2481
         Buenos Aires


RURALNET S.A.: Begins Liquidation Proceedings
---------------------------------------------
Ruralnet S.A. will begin liquidating its assets after Court no.
20 of Buenos Aires' civil and commercial tribunal declared the
Company bankrupt. Infobae reveals that the bankruptcy process
will commence under the supervision of Court-appointed trustee
Oscar Chapiro.

The trustee will review claims forwarded by the Company's
creditors until February 15, 2005. After claims verification, he
will submit the individual reports for Court approval on March
29, 2005. The submission of the general report follows on May
10, 2005.

Clerk no. 39 assists the Court on this case.

CONTACT: Mr. Oscar Chapiro, Trustee
         Avda Raul Scalabrini Ortiz 151
         Buenos Aires


SIDECO AMERICANA: Posts ARP65.1 Mln Net Loss for 9-Month Period
---------------------------------------------------------------
Sideco Americana remains in the red at the end of the third
quarter this year with a net loss of ARP65.1 million (US$22
million). Rising sales costs and financial outlays hurt the
Company's bottom line even as net sales slipped 2.3 percent
while operating profit dropped to 185,000 from last year's
ARP26.8 million.

Business News Americas Reports that the public services and
infrastructure holding Company has reported losses in the last
two years with a net loss figure of ARP286 million in 2003 and
ARP451 million in 2002.

Sideco says that it will continue to solidify its domestic and
international operations particularly in Latin America. The
Company's interest in the region extends to Argentina, Brazil
and Chile.


TELECOM ARGENTINA: Reports Lower Net Loss for 3Q04
--------------------------------------------------
Fixed-line carrier Telecom Argentina (TEO) ended the third
quarter of 2004 with a net loss of ARS261 million, lower than
the net loss of ARS509 million in the same year-ago period,
reports Dow Jones.

Net financial and holding loss for the three-month period
decreased to ARS324 million from ARS490 million a year ago.

For the first nine months of the year, Telecom Argentina posted
a net loss of ARS491 million due to higher interest and foreign
exchange losses. The Company had recorded a net profit of ARS779
million in the same period last year.

Telecom Argentina said its revenue in cellular business rose 47%
to ARS1.20 billion in the nine-month period, while fixed
telephone revenue grew 6% to ARS2.0 billion.

The Company reiterated in its earnings report that it expects to
complete its US$2.63-billion debt restructuring in the first
half of 2005. Telecom Argentina reached 94.47% creditor
agreement for its out-of-Court restructuring and filed its offer
with the Courts on Oct. 21. Legal approval will make the
repayment terms binding on all creditors.

CONTACT:  TELECOM ARGENTINA S.A.
          Alicia Moreau de Justo 50, 10th Floor
          Capital Federal (1107) Republica Argentina
          Phone: +54 11 4968 4000
          Home Page: http://www.telecom.com.ar

          Contacts:
          Alberto J. Ricciardi, Chief Financial Officer
          Elvira Lazzati, Finance Director
          Pedro Insussarry, Investor Relations Manager
          Phone: (5411) 4968-3626/3627
          Fax: (5411) 4313-5842/3109
          E-mail: inversores@intersrv.telecom.com.ar


* ARGENTINA: Presents Debt Swap Prospectus to Italy
---------------------------------------------------
Argentina sent the debt swap prospectus for its US$100 billion
restructuring to regulators in Italy on Tuesday, according to
Economy Ministry spokesman Armando Torres.

Argentina first presented its debt offering documents to the
U.S. Securities and Exchange Commission on Nov. 1, later filing
them with Germany and Luxembourg on Friday. The government still
needs to follow suit with regulators in Japan.

The restructuring involves more than 500,000 private creditors,
many of them small investors in Italy, Germany and Japan who
bought Argentine bonds before the economy collapsed and the
government declared the largest-ever sovereign default in
January 2002.

Italian market regulator Consob was expected to take 15 to 30
days to approve or reject the offer in line with its usual
practices, sources close to the operation said last week.

Argentine Economy Minister Roberto Lavagna has said he hopes
regulators in all the countries give approval by Nov. 29, the
date Argentina has chosen to begin the swap.



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

ULTRAPETROL BAHAMAS: Ratings Not Affected by $180M Debt Issuance
----------------------------------------------------------------
Standard & Poor's Ratings Services said Wednesday that an
increase to $180 million from $150 million in the total amount
raised by Ultrapetrol (Bahamas) Ltd. (Ultrapetrol, BB-
/Negative/--) under its new First Preferred Mortgage Notes
program due 2014 will not affect the ratings assigned to the
Company or to the new financing transaction. The additional
proceeds will be exclusively destined to finance the acquisition
or construction of new vessels in the next several years as part
of the fleet renewal plan already factored in the ratings; the
new vessels will be automatically contributed to the 2014 notes
collateral package as they are purchased or delivered. Total
leverage will increase momentarily in 2005, but will then reach
levels not materially higher than those initially expected from
2006 on. Although interest expenses will increase from initially
projected levels across the life of the deal, pre-funding of the
fleet renewal program is seen as a positive development in that
it secures long-term funding for capital expenditures and
maintains a positive trend for debt duration improvement.

PRIMARY CREDIT ANALYST: Reginaldo Takara, Sao Paulo
(55) 11-5501-8932; reginaldo_takara@standardandpoors.com



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

GLOBAL CROSSING: Lands IT Contract With Top Mexican Law Firm
------------------------------------------------------------
Global Crossing (NASDAQ: GLBC) announced Wednesday that Barrera
Siqueiros y Torres Landa (BSTL), a leading Mexican law firm, has
selected Global Crossing IP VPN Service for converging the
Company's private voice, data, Internet and videoconferencing
traffic onto a seamless network. Global Crossing is also
providing the firm with Managed Services, a full end-to-end
lifecycle support for IP VPN, enabling BSTL's IT staff to focus
on core business responsibilities while Global Crossing ensures
a secure, flexible, reliable and high-performing IP VPN.

"We selected Global Crossing because of their superior customer
service, the guidance they provided from the very beginning and
their product offering," said Andres Acedo, one of BSTL's
partners. "With the network recently implemented, we're pleased
to confirm that the Global Crossing IP VPN Service indeed
provides the speed, reliability, security and flexibility
required to support our sensitive data and voice transmissions,
while providing us with an approximately 25 percent cost savings
on a monthly basis."

With this agreement, BSTL offices in Mexico City and Monterrey
will be able to transmit and critical business data, conduct
teleconferences and videoconferences using Global Crossing's
MPLS-based IP network.

"As we continue to grow our customer base in Latin America, we
are very pleased to see clients like Barrera Siquieros y Torres
Landa benefiting from our converged IP services network and
cost-effective management services," said Pablo Mlikota, Global
Crossing's vice president of enterprise sales for Latin America,
Caribbean and the southeastern United States.

Barrera Siqueiros y Torres Landa IP traffic will be transported
over Global Crossing's secure, privately owned and operated
MPLS-based IP backbone, physically separate from the public
Internet and enabling Global Crossing to provide the security
and performance required by multinationals around the globe.
Global Crossing's MPLS-based IP backbone consistently operates
at greater than 99.999 percent availability, above the highest
industry standard. Global Crossing offers business continuity
solution options including diverse and redundant connectivity
between critical locations, partners, suppliers and personnel.

Available today in more than 500 cities and 50 countries, Global
Crossing provides one of the highest performance and versatile
IP VPN solutions currently in place, providing true global
reach, scalable connectivity, multiple access, flexible billing
options, and supporting convergence of corporate data, VoIP, IP
Video and Internet access, all over one connection. Global
Crossing's IP VPN Service allows carrier and enterprise
customers to create secure, private intranets and extranets
globally. It's a perfect solution for moving traffic such as e-
mail, e-commerce, streaming video and/or other data applications
between multiple sites across the Global Crossing worldwide
network based on differentiated Quality of Service (QoS) across
multiple Classes of Service (CoS) on MPLS.

Global Crossing Managed Services provides value-added pre-sales
engineering and CPE design, equipment procurement, provisioning
and installation, and network monitoring and management backed
by global SLAs. The service also provides ongoing end-to-end CPE
and network management and maintenance support for corporate
locations around the globe, permitting customers to focus on
their core businesses.

About Global Crossing

Global Crossing provides telecommunications solutions over the
world's first integrated global IP-based network. Its core
network connects more than 300 cities and 30 countries
worldwide, and delivers services to more than 500 major cities,
50 countries and 6 continents around the globe. The Company's
global sales and support model matches the network footprint
and, like the network, delivers a consistent customer experience
worldwide.

Global Crossing IP services are global in scale, linking the
world's enterprises, governments and carriers with customers,
employees and partners worldwide in a secure environment that is
ideally suited for IP-based business applications, allowing e-
commerce to thrive. The Company offers a full range of managed
data and voice products including Global Crossing IP VPN
Service, Global Crossing Managed Services and Global Crossing
VoIP services, to more than 40 percent of the Fortune 500, as
well as 700 carriers, mobile operators and ISPs.

CONTACTS: Global Crossing
          Press Contacts:
          Ms. Kendra Langlie
          Phone: + 1 305-808-5912
          e-mail: LatAmPR@globalcrossing.com

          Ms. Fernanda Marques
          Phone: + 55 21-3820-4712
          e-mail: LatAmPR@globalcrossing.com

          Analysts/Investors Contact:
          Ms. Laurinda Pang
          Phone: +1 800-836-0342
          e-mail: glbc@globalcrossing.com

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


LATIN AMERICAN CAPITAL: Robin Mayor to Serve as Liquidator
----------------------------------------------------------
           IN THE MATTER OF THE COMPANIES ACT 1981

                            and

IN THE MATTER OF The Latin American Capital Fund (Chile) Limited

The Member of The Latin American Capital Fund (Chile), acting by
written consent without a meeting on November 9, 2004 passed the
following resolutions:

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

2) THAT Robin J. Mayor be and is hereby appointed Liquidator for
the purposes of such winding-up, such appointment to be
effective forthwith.

The Liquidator informs that:

- Creditors of the above named Company, which is being
voluntarily wound up, are required, on or before November 30,
2004 to send their full Christian and Surnames, their addresses
and descriptions, full particulars of their debts or claims, and
the names and addresses of their lawyers (if any) to Robin J
Mayor at Messrs. Conyers Dill & Pearman, Clarendon House, Church
Street, Hamilton, HM DX, Bermuda, the Liquidator of the said
Company, and if so required by notice in writing from the said
Liquidator, and personally or by their lawyers, to come in and
prove their debts or claims at such time and place as shall be
specified in such notice, or in default thereof they will be
excluded from the benefit of any distribution made before such
debts are proved.

- A final general meeting of the Member of The Latin American
Capital Fund (Chile) will be held at the offices of Messrs.
Conyers Dill & Pearman, Clarendon House, Church Street,
Hamilton, Bermuda on December 17, 2004 at 9:30 a.m., or as soon
as possible thereafter, for the purposes of:

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

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

3) by resolution dissolving the Company.

CONTACT: Mr. Robin J. Mayor, Liquidator
         Clarendon House
         Church Street
         Hamilton, Bermuda



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

BANCO VOTORANTIM: To Issue $50M Eurobonds in Local Currency
-----------------------------------------------------------
Banco Votorantim SA, the financial arm of Brazil's largest
industrial group, said it is returning to the international
capital markets with a US$50-million eurobond issued in local
currency for the first time, reports Business News Americas.

In a statement, the bank said the 18-month bonds, whose
principal and coupon are linked to Brazil's real, will yield
18.3% to 18.7%. The issue is being handled by Votorantim Bank.

Investor could begin to place their bids for the bonds Tuesday
while a closing date for the bidding has not yet been announced.

The sale underscores increased confidence in the stability of
Brazil's currency two years after it lost a third of its value,
said Wilson Masao Kuzuhara, vice president of Banco Votorantim.
Investors will pay dollars for the bonds and receive the U.S.
currency for coupon and principal payments based on the exchange
rate at the time.


BRASKEM: Expects to Gain BRL60 Mln at Year-End with Braskem+
------------------------------------------------------------
Braskem S.A. (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK), the
leader in the thermoplastic resins segment in Latin America and
one of the three largest Brazilian privately-owned industrial
companies, announced more detailed information on its
operational excellence program: Braskem+.

Braskem has already begun to reap the first benefits from
Braskem+, an operational excellence program designed to position
Braskem among the most competitive petrochemicals companies in
the world. Braskem+ is a multi-year competitiveness program that
Braskem began to implement this year and that is expected to
generate incremental gains for Braskem, which gains are expected
to reach an estimated value of R$420 million by 2007, on an
annual and recurring basis. By the end of 2004, the initiatives
that have already been implemented and that are being
implemented under the Braskem+ program are expected to result in
gains of approximately R$ 60 million, on an annualized basis.

Braskem+ may be a potential source of value creation that is
more important than the synergies that resulted from Braskem's
operational and corporate integration process, which synergies
in an aggregate amount of R$330 million on an annual and
recurring basis are expected to be captured in full by the end
of 2004. "The Braskem+ program that we are presenting to the
market today establishes levels of competitiveness and
productivity that are consistent with Braskem's goal to become a
world-class Brazilian Company and completely in line with the
growth prospects of the Company," Jos‚ Carlos Grubisich,
President of Braskem, affirmed.

The program identifies 218 specific initiatives, each with their
own performance goals and implementation schedules, and plans to
use the same methodology for acCompanying and evaluating the
results that was used successfully in respect of the
implementation of the synergies. Of the total of R$420 million
in potential gains that have been identified, R$125 million are
expected to be obtained without any investment and the remaining
R$295 million are expected to require investments of
approximately R$330 million over the next three years.

These initiatives were identified based on a broad and careful
analysis by Braskem between July 2003 and the middle of 2004
with the assistance of a leading international consulting firm.
This work consisted of comparing the performance of Braskem's
operating units against the best practices among petrochemical
companies, worldwide. A number of opportunities for improvement
were identified relating to different factors, including
increasing the productivity of raw materials and operational
reliability, reducing fixed and variable costs and increasing
utilities productions (energy, steam, etc.), among others.

Together with the improvements in competitiveness through the
Braskem+ program, the other two legs in the tripod that support
Braskem's growth strategy also include a highly dynamic process
of innovation through the development of new products and
applications, and the expansion of Braskem's production
capacity, including through the construction of new industrial
plants. In respect of innovation, it is important to note the
recent launching of new polypropylene resins for non-carbonated
beverages, disposable cups, containers for cheese and fiber-
cement roofing and water storage systems, as well as
polyethylene manufactured with metallocene catalysts for high-
performance packaging and PVC for windows and window casings.

In relation to increases in production capacity, Braskem intends
to increase its production by approximately 1.2 million tons per
year between 2004 and 2007, including through debottlenecking
initiatives in almost all of its industrial plants at
competitive prices and a project to construct a new
polypropylene plant in Paul¡nia, with an estimated capacity of
300,000 tons per year, which project is in the final stages of
discussion. By the end of the decade, Braskem expects that more
than 600,000 tons of polyethylene per year will be available as
a result of a gas-chemical complex to be built near the border
with Bol¡via.

"The combination of production capacity increases and of the
efforts made to position Braskem among the most competitive
petrochemical companies in the world reflects an important
competitive advantage for the Company, capable of increasing its
profitability and its capacity to create value," concluded Mr.
Grubisich.

Braskem, a world-class Brazilian petrochemical producer, is the
leader in the thermoplastic resins segment in Latin America and
is among the three largest Brazilian-owned private industrial
companies. With 13 manufacturing plants located throughout
Brazil, the Company has an annual production capacity of 5.7
million tons of chemical and petrochemical products.

For additional information, please contact:

CONTACTS: Mr. Vasco Barcellos
          IR Manager
          Phone: (55 11) 3443 9178
          e-mail: vasco.barcellos@braskem.com.br

          Mr. Jose Marcos Treiger
          IR Officer
          Phone: (55 11) 3443 9529
          e-mail: jm.treiger@braskem.com.br

          Mr. Luiz Henrique Valverde
          IR Manager
          Phone: (55 11) 3443 9744
          e-mail: luiz.valverde@braskem.com.br


ELETROPAULO METROPOLITANA: Profits Evaporate Year on Year
---------------------------------------------------------
Eletropaulo Metropolitana, Brazil's largest power distributor,
posted net losses of BRL11.9 million (US$4.2mn) for the first
nine months of 2004, reversing net profits of BRL131 million in
the year-ago period.

Net revenue for the first nine months of 2004 stood at BRL5.37
billion, up 16.5% on the year, while gross profits climbed 17%
to BRL753.73 million.

Operating profits between January and September stood at
BRL359.04 million, 51% lower than in the same period last year.

At the end of September, Eletropaulo's net equity amounted to
BRL2.18 billion.

Eletropaulo is now 73% controlled by Brasiliana, a holding
Company created in December 2003, as a result of the debt
restructuring agreement between U.S.-based AES Corp. and BNDES
(Banco Nacional de Desenvolvimento Economico e Social).

CONTACT:  ELETROPAULO METROPOLITANA
          Avenida Alfredo Egidio de Souza Aranha 100-B,
          13 andar 04726-270 San Paulo
          Brazil
          Phone: +55-11-548-9461, +55 11 5696 3595
          Fax: +55-11-546-1933
          URL: http://www.eletropaulo.com.br
          Contacts:
          Luiz D. Travesso, Chairman and President
          Orestes Gonzalves Jr., VP Finance/Investor Relations


NET SERVICOS: Net Revenues Rise 5.7% From Last Quarter
------------------------------------------------------
Servicos de Comunicacao S.A. (Bovespa: PLIM4 and PLIM3; Nasdaq:
NETC; and Latibex: XNET), the largest Pay-TV multi-service
operator in Latin America (NET), and an important provider of
bi- directional broadband Internet access (V¡rtua) announced
Tuesday its earnings results for the third quarter 2004 (3Q04).

HIGHLIGHTS:

- Sale of Vicom: According to the Relevant Notice disclosed on
August 31, 2004, the Company signed a Purchase and Sale
Agreement to transfer its total stake held in Vicom Ltda. to
Comsat Brasil Ltda. Therefore, only the results for the months
of July and August 2004 are consolidated, what may have caused
some distortions in the quarterly and YTD comparisons. Since
Vicom's results will no longer be included the in Company's
consolidated income statement, a slightly higher impact, but
still wispy significant, is expected for the next quarters
results. For measurement purposes, for the twelve months ended
in the 2Q04, Vicom represented around 4.0% and 2.7% of the
Company's Net Revenues and EBITDA, respectively. For the 3Q04,
excluding the consolidation in September the same calculated
impact was around 2.1% and 0.5%.

- Net Revenues were 5.7% higher in this quarter and totaled US$
122.4 million in comparison to the US$ 115.8 million in the
previous quarter. Pay-TV monthly-fee readjustments, higher PPV
sales, broadband subscriber base growth and the Real
Appreciation were the reasons for such increase.

- The Company registered quarterly Consolidated EBITDA of US$
31.7 million, 6.0% above the US$ 29.9 million recorded in the
2Q04. Part of this increase was due to Real appreciation, once
in BR GAAP, EBITDA grew by 1.6% to R$ 95.2 million. It is
important to highlight that this result does not take into
consideration Vicom's September results, due to its sale by the
end of August.
This performance shows that the Company is able to implement its
sustainable growth strategy and improve its operating
performance, therefore consolidating the feasibility of the
business in the long term. EBITDA margin increased 10 basis
points, from 25.8% to 25.9%. The Real Appreciation mainly
explains this increase in the quarter. Although in BR GAAP
EBITDA margin dropped 50 basis points, it does not represent a
weakness in the operational performance; it is merely a seasonal
effect due to higher selling expenses related to Pay-TV and
broadband promotional campaigns and the provision for the
payment of the 2004 Result Participation Plan, as the results
recorded so far indicate that the Company will meet its goals
for the year.

- Operating Income (EBIT) was, for the third consecutive time,
the best on the Company's history, reaching US$ 18.2 million, a
31.6% increase in relation to the US$ 13.8 million recorded in
the previous quarter. This increase was mainly due to Real
Appreciation, once in BR GAAP, EBIT grew by 14.3% to R$ 35.6
million and has also recorded the highest result in the
Company's history.

- Net Debt rose by 2.5% in comparison to 2Q04, ending this
quarter with US$ 238.5 million. The End period exchange rate
decrease of 8.0% and the effect in the Company's cash balance
provided by the payment of a programming supplier, as the
Company entered in a final agreement with this programmer were
the main reasons for such increase.

- Net Loss for the period was US$ 7.2 million versus a Net Loss
of US$ 24.6 million in the previous quarter. This result was
mainly a consequence of the impact of the Real appreciation in
the period.

- Pay-TV ARPU rose 3.9% during the quarter and reached US$ 32.31
compared to US$ 31.11 presented in 2Q04, mainly due to the
monthly-fee readjustments, higher Pay-Per-View revenues and the
Real Appreciation.

- Broadband ARPU went up by 3.4% against the previous quarter,
reaching US$ 21.88, versus US$ 21.17. This result is mainly due
to the Real Appreciation, since in BRGAAP broadband ARPU
declined 1.0% as a consequence of a promotion occurred during
the quarter to increase the subscribers' base. Despite the
impact on the quarter, this promotion is achieving its goals
and, with no significant impact for the broadband product
payback that is close to 12 months.

OPERATING PERFORMANCE

PAY-TV

- Gross Sales reached 84.7 thousand in the quarter, a 12.3%
growth in comparison to the previous quarter. Since the
remodeling of the Company's sales force and the implementation
of a more aggressive sales strategy back in 2003, sales have
been continuously improving throughout the quarters.

- The highlight for the third quarter was the open media and
internal channels advertising campaigns focused on the Olympic
Games that has also counted with the support of the programming
suppliers. The Company has also benefited from SportTV (a sports
channel) broad coverage of the Olympic Games, that for
promotional purposes, included two temporary extra channels, in
addition to its two regular channels in order to make live
broadcasting of the main events, thus totaling four channels
with exclusive transmissions at no additional charge.

- In addition, two promotions were carried out to attract new
subscribers and to improve the subscribers base mix during the
quarter. The first one was made during the Olympic Games, when a
discount was offered to new Advanced package subscribers, whose
first monthly payment would be equal to the Master package. The
second one took place in September, and offered a discount for
new subscribers of the Advanced package plus one secondary
connection.

- Connected subscriber base rose by the fifth consecutive
quarter, ending the 3Q04 with 1,395.2 thousand subscribers, a
1.1% increase in comparison to the 1,379.9 thousand subscribers
recorded by the end of 2Q04.

- Churn rate for the last 12 months was 13.9%, fairly stable in
comparison to the 14.1% registered in the previous quarter.

- The Customer Relations Department, responsible for the
retention and reversion islands, presented a significant
improvement in its performance, ending September with a
reversion ratio superior to 77%, versus the 70% of disconnection
requests in the previous quarter. This department has been
playing a key role in maintaining the Company's churn rate at
current levels.

- Voluntary disconnection requests accounted for 13.5% of the
total. The main reason for disconnection remains subscriber
relocation to other cities or areas not covered by our cable
network, which represents 25.4% of these disconnections.
Disconnection for financial reasons dropped from 10% to 9%,
beginning to reflect the improvement of the Brazilian economic
scenario, under the consumers' perspective.

- Connected subscriber base mix presented a hike in the Advanced
package in comparison to the previous quarter, from 46.1% to
46.3%, as well as the Master package that posted an increase
from 29.0% to 29.4%. On the other hand, the Plus package and
Standard package dropped from 8.8% to 6.8% and from 9.1% to
8.4%, respectively.

- In Pay-Per-View ("PPV"), the 2004 Brazilian Soccer
Championship ("Brasileirao") full package sales were higher than
the number recorded in 2003. Year to date, the Company
registered 99 thousand package sales versus 92 thousand in the
same period of 2003.

- In early November, the Company has launched "NET Digital".
Available in Sao Paulo and Rio de Janeiro, NET Digital offers a
higher number of channels, shopping through the remote control,
electronic programming guide and two mosaics, each one showing
12 channels simultaneously. There is also available a game
section that can be played through the remote control. To
implement NET Digital, the Company should invest approximately
R$ 100 million over the next 3 years, already foreseen in the
Business Plan approved in March 2003. The Company intends to
have around 100 thousands digital subscribers, by the end of
2006. Besides the existing programming available for the
Advanced package and local broadcasting channels NET Digital
will offer new channels, such as MTV Hits, VH1 Soul, A&E Mundo,
The History Channel, E! Entertainment and NHK.

BROADBAND

- V¡rtua sales have been growing in a quarterly basis since the
product's remodeling in 2003. During 3Q04, the Company increased
its media exposure by producing new advertising campaigns
emphasizing V¡rtua's great competitive advantages in relation to
its main competition. The "double flash" campaign highlights
that V¡rtua subscribers can receive and send data at the hired
speed, unlike the technology offered by competition, which only
offers the hired speed for downloads.

- During the 3Q04, the Company changed its speed packages,
increasing the connection speed from 128Kbps, 256kbps, 384 kbps
and 512kbps to 150kbps, 300kbps, 600kbps and 1,200kbps,
respectively, at no additional cost for its subscribers. In
addition, a more aggressive campaign was carried out in Sao
Paulo, where the subscriber who opted for the 300kbps speed
would pay an R$ 34.90 monthly-fee until year-end. For the other
cities where the Company offers the product, the same promotion
was made at a price of R$ 49.90 per month until year-end.

- V¡rtua's commercial website was also remodeled in this
quarter, hosting a new and more modern design and now more
focused on increasing sales through its online chatting tool.

- As a result of this more aggressive marketing strategy, the
remodeling of the speed packages and improved Brazilian economic
scenario, Gross sales rose 50.2% from 27.4 thousand subscribers
in the previous quarter to 41.2 thousand subscribers in 3Q04.
The subscribers' base went up by 19.4% in comparison to the 131
thousand subscribers in the 2Q04, ending the 3Q04 with 157
thousand subscribers.

- 12 months broadband churn rate rose in this quarter from 11.4%
to 12,3%. The unification of the billing system occurred in the
previous quarter made the Company more efficient in
disconnecting subscribers, resulting in this increase. The
Company estimates that the effect is completely reflected in its
operations and it expects churn rate to remain stable in the
next quarters.

- As a result of the 300kbps speed sales promotion, broadband
connected subscribers' base mix recorded a slight improvement,
with the 150kpbs speed subscribers share down from 53.6% in the
2Q04 to 52.1% this quarter. Also the Pay-TV connected
subscriber's base penetration to the bi-directional area reached
38.2%, versus 35.1% penetration in 2Q04.

CALL CENTER PERFORMANCE

- For the first time since the supplier's replacement in
November 2003, Net's Call Center presented a decrease in its
performance. This drop was due to frequent system failures in
the Sao Paulo region, making this call center to present results
below its target of answering at least 80% of the calls in less
than 20 seconds. This system failure has already been fixed.
Therefore, the Company expects the call center performance to
return to the levels recorded in previous quarters.

CONSOLIDATED EARNINGS ANALYSIS

- Gross Revenues reached US$ 152.7 million in the 3Q04, an 8.6%
increase in comparison to the US$ 140.6 million recorded in the
2Q04. The concentration of Pay-TV monthly-fee readjustments in
June and September, higher PPV sales volume, Broadband
subscriber base growth and the Real Appreciation were the main
reasons for such increase and are set forth:

1. Pay-TV subscription revenue totaled US$ 123.6 million versus
US$ 117.1 million registered in the previous quarter, or a 5.6%
increase in the period, reflecting the 1.1% growth in the
subscriber base during this quarter and monthly-fees
readjustments concentrated in June for the Sao Paulo and Rio de
Janeiro regions and in September for the Southern region. Pay-TV
monthly-fees readjustments are based on the IGP-M inflation rate
(General Market Price Index) and have respectively accumulated
in the last 12 months 5.4% and 11.5%.

2. Average hook-up revenue (per new subscriber) presented a
13.1% negative variation, from US$ 30.27 in the previous quarter
to US$ 26.31 in the 3Q04. This result is mainly due to higher
Loyalty package sales, which exempt subscribers from hook-up fee
in exchange of the commitment to stay in the subscriber base for
no less than 12 months.

3. Pay-Per-View Revenue in the quarter totaled US$ 5.7 million,
14.3% higher than the US$ 5.0 million posted in 2Q04. This
result is mainly explained by higher single games sales of the
2004 Brazilian Soccer Championship. On a year to date
comparison, PPV revenues rose by 14.5%, mainly due to higher
"Brasileirao 2004" full package sales in comparison to the same
period of the previous year.

4. Broadband revenues grew by 21.9%, reaching US$ 9.5 million
this quarter versus US$ 7.8 million in the previous quarter,
mainly as a consequence to the 19.4% subscriber base increase
this quarter.

5. Other Revenues, considering revenues from Corporate Networks,
presented a 38.0% increase in comparison to the previous
quarter, totaling US$ 11.7 million versus US$ 8.5 million in
2Q04. Even though in this quarter the Company accrued a lower
amount of revenues from Corporate Networks business due to the
sale of Vicom by the end of August, this increase was due to an
extraordinary sale of approximately US$ 6.0 million, related to
higher revenues from inventory sales made by Reyc and office
space rentals by some subsidiaries. It is worth mentioning that
these sales practically have no impact the Company's EBITDA,
once such revenue is fully offset by sales deductions and
operating costs.

- Services and Other Taxes, that includes taxes and
cancellations, closed the quarter at US$ 30.3 million, a 22.3%
increase in relation to US$ 24.8 million posted in the previous
quarter. Such raise is mainly a consequence of the ICMS (Value-
added Tax) on the Broadband service in the State of Rio de
Janeiro. The Company was in a legal dispute against this State
in order to lower the tax rate. However, it was decided to
proceed with the payment of the full rate of such tax, including
its past due amount. It is important to mention that the
disputed proceeds were already provisioned in the Company's
balance sheet. Also, the difference remaining from the increase
on this deduction is basically comprised by the difference
between the rate and a higher collection due to the Pay-TV
subscriber base increase.

- The abovementioned factors resulted in 5.7% higher Net
Revenues in this quarter, totaling US$ 122.4 million in
comparison to the US$ 115.8 million recorded in 2Q04.

COSTS AND EXPENSES RELATED TO NET REVENUE

- Direct Operating Expenses in the quarter were 12.7% higher and
totaled US$ 68.4 million versus the US$ 60.7 million registered
in the previous quarter. The breakdown of these expenses is
detailed bellow:

1. Programming and Royalties costs increased 4.7%, reaching US$
40.1 million compared to US$ 38.3 million recorded in the
previous quarter. The main reasons for this increase were the
readjustments based on the IGP-M inflation rate in some of the
programming contracts and the cost of two new channels, "SportTV
2" and "Discovery Health".

2. Network Expenses recorded a 12.7% increase, totaling US$ 7.8
million in the quarter versus US$ 6.9 million in the previous
quarter. This increase reflects a discount of approximately R$
1.7 million recorded in the previous quarter regarding the pole
rental renegotiation for the Sao Paulo operation. Excluding this
effect, this line would not present a significant change.

3. Customer Relations were fairly stable this quarter at US$ 1.5
million.

4. Payroll and Benefits Expenses posted a 12.4% increase this
quarter, reaching US$ 6.3 million in comparison to the US$ 5.6
million in 2Q04, mainly due to the collective labor agreement
that readjusted the payroll in approximately 6% in July, and to
the provision for 2004 Result Participation Plan, as the results
recorded this quarter increased the probability of the Company
meeting its goals.

5. Other Operating Expenses, including third-party services and
V¡rtua link, recorded a 51.3% increase, reaching US$ 12.6
million in comparison to the US$ 8.3 million recorded in the
2Q04. This increase is mainly due to the previously mentioned
revenues from decoder sales, which had an impact of US$ 4.6
million, as previously mentioned, and to the Real Appreciation.

- Selling, General and Administrative Expenses (SG&A) totaled
US$ 22.4 million, an 11.5% drop in comparison to the US$ 25.3
million recorded in the previous quarter. This result is broken
down as follows:

1. Selling Expenses presented a 23.8% increase this quarter,
totaling US$ 7.3 million versus US$ 5.9 million 2Q04. This
increase is due to higher expenses with advertising agencies
media campaigns for Pay-TV and V¡rtua, the highlights being the
Olympic Games and V¡rtua campaigns.

V¡rtua, besides launching its new website, promoted advertising
campaigns that focused on its main advantage versus ADSL
technology, the "Double Flash", that unlike ADSL broadband,
allows users to send and receive data at the hired speed.

2. General and Administrative Expenses went up 7.1%, totaling
US$ 17.9 million, due to July's collective labor agreement
occurred in July, which that increased employee's payroll of
approximately 6% and to the abovementioned provision for the
Result Participation Plan.

3. Bad Debt Expenses reached US$ 2.6 million in the 3Q04 against
US$ 1.9 million in the previous quarter. This increase is
explained by the reversion of loss provision for a Vicom's
client occurred in the 2Q04, due to recurring payment.

- Other SG&A Income (Expenses) were positive US$ 5.5 million in
the quarter versus a negative US$ 0.8 million result in the
previous quarter. This performance is a consequence of the
reversion of provision for contingencies related to ICMS in the
Rio de Janeiro operation, once the Company decided to pay such
tax and related past due figure in this quarter ending the legal
dispute and also, two other provisions for contingencies related
to fiscal and legal disputes, in which the Company had positive
results, were reverted.

- The Company registered quarterly Consolidated EBITDA of US$
31.7 million, 6.0% above the US$ 29.9 million recorded in the
2Q04. Part of this increase was due to Real appreciation, once
in BR GAAP, EBITDA grew by 1.6% to R$ 95.2 million. It is
important to highlight that this result does not take into
consideration Vicom's September results, due to its sale by the
end of August.

This performance shows that the Company is able to implement its
sustainable growth strategy and improve its operating
performance, therefore consolidating the feasibility of the
business in the long term. EBITDA margin increased 10 basis
points, from 25.8% to 25.9%. The Real Appreciation mainly
explains this increase in the quarter. Although in BR GAAP
EBITDA margin dropped 50 basis points, it does not represent a
weakness in the operational performance; it is merely a seasonal
effect due to higher selling expenses related to Pay-TV and
broadband promotional campaigns and the provision for the
payment of the 2004 Result Participation Plan, as the results
recorded so far indicate that the Company will meet its goals
for the year.

1. Pay-TV EBITDA ended the quarter with US$ 28.5 million, 9.6%
above the US$ 26.0 million recorded in the previous quarter.
With costs and expenses under control and a consequent
maintenance of the EBITDA margin, the increase in revenue
provided by monthly fee readjustments, subscriber base and PPV
sales for the Brazilian Soccer Championship resulted in this
higher EBITDA.

2. Broadband EBITDA remained stable at US$ 3.1 million, although
the subscriber base increase registered during the quarter. In
BR GAAP, broadband EBITDA went up 13.3%, reflecting this
subscribers base increase.

- Depreciation and Amortization expenses recorded a 17.8% drop
in the quarter, totaling US$ 13.5 million in comparison to the
US$ 6.4 million in the 2Q04. Such decrease is primarily due to
the reduction of the Company's total consolidated assets, as a
consequence of the sale of Vicom in August. There was also the
full depreciation of some assets that reached the end of its
useful lives.

- As EBITDA, Operating Income (EBIT) was, for the third
consecutive time, the best result on the Company's history,
reaching US$ 18.2 million, a 31.6% increase in relation to the
US$ 13.8 million recorded in the previous quarter. This increase
was mainly due to lower depreciation and amortization expenses,
as a reflect of the sale of Vicom and Real Appreciation, once in
BR GAAP, EBIT grew by only 14.3% to R$ 35.6 million.

NET FINANCIAL RESULT

- Net Financial Result recorded negative US$ 17.3 million,
versus US$ 42.4 million in the 2Q04. This result was the product
of:

1. Monetary indexation, net was negative US$ 1.7 million in the
quarter, 11.7% better than the US$ 1.9 million expense recorded
in the previous quarter. This quarterly decrease is due to IGP-M
(General Market Price Index) inflation rate reduction that stood
at 3.2% in the 3Q04, versus 3.7% in the previous quarter.

2. Loss on exchange rate, net was positive US$ 27.0 million,
versus a negative US$ 22.1 million in the previous quarter. This
increase can be explained by the impact of the 8.0% Real
appreciation over the Company's debt denominated in foreign
currency.

3. Financial Expenses totaled US$ 23.1 million, a 13.4% increase
in comparison to the US$ 20.4 million registered in the 2Q04.
This increase is a consequence of higher interest rates in
Brazil and interest expenses related to some local taxes.

4. Other Financial Expenses reached US$ 21.5 million in this
quarter versus US$ 3.1 million recorded in 2Q04. This
recognition of financial restructuring expenses totaling US$
17.8 million, including financial and legal consulting services
rendered during the whole restructuring process.

5. Financial Income totaled US$ 2.0 million this quarter, versus
the US$ 5.0 million recorded in the previous quarter. This
decrease is related to the Real Appreciation, since the Company
holds a significant portion of its cash equivalents linked to
the US dollar that reduced its financial income.

6. Other Non-Operating Expenses were US$ 5.7 million versus US$
0.1 million in the previous quarter. This result is a
consequence of the net impairment of goodwill from the Vicom,
sold in late August.

- Income Tax and Social Contribution amounted to a expense US$
2.8 million, higher than the positive result from the US$ 2.6
million in the previous quarter. This result is due to: (i) the
booking of deferred tax benefits4 totaling US$ 4.7 million
during 2Q04, which reduced this expense in that quarter; (ii)
the non-recurring reversion of provisions for contingencies of
US$ 1.2 million in 2Q04; and (iii) the reversion of US$ 1.4
million deferred taxes benefits, which were realized during
3Q04. As a consequence of such reversions and the lower profit
for some operations, cash Income Tax and Social Contribution,
were reduced by US$ 0.9 million, from US$ 2.6 million to US$ 1.6
million in 3Q04.

- Net Loss for the period was US$ 7.2 million versus a Net Loss
of US$ 24.6 million in the previous quarter. This result was
mainly a consequence of the impact of the Real appreciation in
the period.

Debt, Capitalization and Cash

- One of the consequences of Vicom's sale in August 2004 was
that Uniao de Comercio e Participacoes Ltda. ("UCP") a Company
of Bradesco Group assumed part of Vicom's debt totaling US$ 1.1
million. As UCP is not a financial Company, NET, in compliance
with accounting principles, had to transfer its debt to another
line of the balance sheet. Such debt, however, continues to be
part of the Financial Restructuring plan.

- The Company ended the 3Q04 with Total Debt of US$ 340.2
million, a 3.3% increase in comparison to the US$ 329.2 million
Total Debt recorded in the previous quarter as a consequence of
the Real Appreciation.

- Cash position reached US$ 101.8 million, a 5.4% increase over
the US$ 96.5 million recorded in the previous quarter. Although
the Company paid R$ 25.0 million to a programmer, as a
consequence of the final agreement reached with a programming
supplier and as per the announcement made by the Company in the
previous quarter, the Company had identified some expenses and
investments considered in the 2003 budget and beginning of 2004,
that had not yet occurred. However, the impact of the end-period
exchange rate decrease of 8.0% in the in the Page 10 of 16
quarter offset such expenses. Even so, approximately US$ 17.3
million of these expenses and investments will still be
performed before year-end.

- Therefore, Net debt rose by 2.5% in comparison to 2Q04, ending
this quarter with US$ 238.5 million.

- The dollar-denominated debt dropped from 63.5% to 59.6% of
Total Debt, in response to the Real appreciation this quarter.

- During the 3Q04, weighted average cost of debt, considering
the original debt contracts, was of 20.94% in Reais and 9.06%
for US dollar denominated debt.

- The Company has made total Capex of R$ 78.2 million until the
end of this quarter, mainly regarding new subscribers, already
taking into consideration the macroeconomic scenario. This Capex
has been enough to support the presented Pay TV growth by the
Company quarter over quarter, as well as the huge growth showed
in broadband. For the last quarter of this year, the digital
roll out should increase the Capex, but it will be within the
Company's long-term business plan.

- There was no principal and interest amortization during the
quarter, due to of the Company's decision taken at the end of
2002 to reevaluate its cash flow on a daily basis while pursuing
an adequate capital structure. Therefore, the whole debt
remained classified as short-term liabilities until the end of
3Q04.

- All charges and arrears interest over past due and the end of
the 3Q04 booked not liquidated obligations. However, for the
Financial Restructuring purposes, the debt is based in the
figures recorded in the Balance Sheet as of June 30, 2004, added
to a new interest rate, as agreed with the creditors, of CDI+2%
p.a. for Real denominated debt and Libor+3% p.a. for US dollar
denominated debt, as announced on June 27, 2004. Therefore, the
interest accrued along 3Q04, which are based on the original
contracts, will be deducted from the amounts recorded in the
Balance Sheet as of September 30, 2004, and it will be added the
interest accrued according to the new terms negotiated and
agreed upon with creditors in the conclusion of the financial
restructuring. In addition, penalties will be waived from the
balance sheet, as previously announced.

- Therefore, at the restructuring conclusion date, the Company
will pay interest according to the new rates settled, regarding
the period starting July 1, 2004 until the closing date.

- On a meeting held on November 3, 2004, the Board of Directors
approved the capital increase through a private offering of
shares, as a substitute for the public offering of shares
previously announced at a fixed price of R$ 0.35 for both common
and preferred shares. This alternative provides the necessary
protection to current shareholders, and also allows for the
speedup of the closing of the restructuring plan. At the same
time, it allows for additional cash generation to reduce the
Company's financial leverage beyond the initially expected
levels, in case there are any unsubscribed shares after the
current shareholders decided upon their preference rights. The
Board decision does not constitute an amendment to the Plan,
which already contemplated such alternative. This private
offering of shares is still subject to the completion of the
existing preconditions under the restructuring plan and under
the agreement between Globopar and Telmex, whereby Telmex would
acquire a stake in NET.

- Since the public announcement of the agreement with creditors,
the Company is working on the ducumentation that will be used to
formalize the restructuring. As announced in a Relevant Notice
on November 5, 2004, the necessary documents for the conclusion
of the restructuring plan were already filed with the Brazilian
Securities and Exchange Commission - CVM, and also with the
Security and Exchange Commission - SEC in the USA. Comments from
these commissions should be sent to the Company in a 30-day
term, starting on the filing date. Therefore, the financial
restructuring is very close to its conclusion, solving
permanently the Company's capital structure issue.

To view financial statements:
http://bankrupt.com/misc/3Q04NetServ.pdf

CONTACTS: Mr. Marcio Minoru Miyakava
          Phone: (+55 11) 5186-2811
          e-mail: minoru@netservicos.com.br

          Mr. Rodrigo de Macedo Alves
          Phone: (+55 11) 5186-2637
          e-mail: rodrigo.alves@netservicos.com.br


USIMINAS: Provides Update on COSIPA Public Offering
---------------------------------------------------
Usinas Siderurgicas de Minas Gerais S.A. (USIMINAS) ("Offeror"),
as the controlling shareholder of Companhia Siderurgica Paulista
- COSIPA ("COSIPA"), and COSIPA, in accordance with Instruction
No. 358/02 of the Comissao de Valores Mobiliarios (the Brazilian
Securities and Exchange Commission, or the "CVM") publicly
declare that the Board of Directors of the Offeror, in a meeting
held on November 8, 2004, authorized the Executive Board to,
request the registry of the Obligatory Public Offering for the
Acquisition of the totality of shares issued by COSIPA ("POA",
Public Offering for Acquisition) with the CVM on the day
following the date of the publication of this Public Notice, for
purposes of canceling COSIPA's registry as a publicly traded
Company, as set forth in Article 21 of Law No. 6,385/76, in
accordance with 4 of Law No. 6,404/76 and CVM Instruction No.
361/02.

The outstanding shares, as defined in Article 3, paragraph III
of CVM Instruction No. 361/02, correspond to 250,514,347 shares,
representing 6.3% of COSIPA's total capital, made up of
52,343,659 common shares, equivalent to 3.9% of the voting
capital; and 198,170,688 preferred shares, equivalent to 7.4% of
preferred capital.

The purchase price for both the common and preferred shares will
be R$ 1.20 (one Real and twenty centavos) per share, paid at
sight in Brazilian Reais, adjusted by the Taxa Referencial-TR
(Referential Rate), plus 6% annual interest (365-day basis), pro
rata temporis, as of the date of publication of this Notice
until the closing date of the POA.

The above purchase price is 73.9% and 51.9% higher than the
weighted average price of COSIPA's common and preferred shares,
respectively, calculated from Nov. 1, 2003 to Oct. 31, 2004, on
the Bolsa de Valores de Sao Paulo (the Sao Paulo Stock Exchange)
- BOVESPA, and 224.3% higher than the Book Value per share at
June 30, 2004.

The Offeror will register the POA Notice and Appraisal Report
prepared for purposes of Article 8 of CVM Instruction No. 361/02
by Banco Itau BBA. S.A. with the CVM and Bovespa on the day
following the publication of this notice. For purposes of
Article 4-A of Law No. 6,404/76 and Articles 23 and 24 of CVM
Instruction No. 361/02, the POA Notice and Appraisal Report are
available for consultation at the following addresses:

COMISSAO DE VALORES MOBILIARIOS
(SECURITIES AND EXCHANGE COMMISSION)
Rua Formosa, no 367, 20o andar - Centro, Sao Paulo, SP.
Rua Sete de Setembro, no 111, 5o andar - "Centro de Consultas"-
Rio de Janeiro, RJ
e-mail: www.cvm.gov.br

BOLSA DE VALORES DE SAO PAULO
(SAO PAULO STOCK EXCHANGE) - BOVESPA
Rua XV de Novembro, 275
Sao Paulo, SP
e-mail: www.bovespa.com.br

USINAS SIDERURGICAS MINAS GERAIS S.A.- USIMINAS
Rua Professor Jose Vieira de Mendonca, 3011 - Eng.Nogueira
Belo Horizonte-MG
e-mail: www.usiminas.com.br

COMPANHIA SIDERURGICA PAULISTA - COSIPA
Av. do Cafe, 277 Torre B 8§ e 9§ andares - Vila Guarani
Sao Paulo - SP
e-mail: www.cosipa.com.br

BANCO ITAU BBA S/A
Av. Brigadeiro Faria Lima, 3400
Sao Paulo, SP
e-mail: www.itaubba.com.br

The POA will be held at an auction at the Sao Paulo Stock
Exchange. The financial closing will occur in accordance with
the rules of the Companhia Brasileira de Liquidacao e Custodia -
CBLC (the Brazilian Clearance and Depository Company) at a
future date to be established by public notice. The POA is
subject to prior approval by the BOVESPA and the CVM, in
accordance with the terms of CVM Instruction No. 361/02.
Cancellation of COSIPA's registration as a publicly held Company
is conditioned upon compliance with of Article 16 of CVM
Instruction No. 361/02.



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

AES GENER: Declares Earnings of CLP39 Mln for 3Q04
--------------------------------------------------
AES Gener S.A., the largest thermal electricity generation group
in Chile, reported its results for the period ended September
30, 2004, with earnings of CLP 39,049 million compared with
earnings of CLP 48,724 million in the period ended September 30,
2003.

HIGHLIGHTS:

- Higher demand growth in the first nine months of 2004 as
compared to the same period in 2003, reaching 7.9% in Chile and
2.7% in Colombia.

- On July 6, 2004 the total upfront compensation of US$40
million from Minera Escondida related to the new conditions of
the previous power supply agreement were paid.

- Nacimiento steam plant and the Colombian coal-mine, Carbones
del Cesar, were sold during the third quarter of 2004 for an
aggregate cash amount of USD 22 million.

-Interest expense for the nine-month period ended September 30,
2004 decreased 23%, excluding the extraordinary cost of the
TermoAndes interest rate swap termination cost.

CONSOLIDATED QUARTER ANALYSIS:

Amounts are in accordance with Chilean generally accepted
accounting principles and expressed in constant Chilean pesos as
of September 30, 2004, therefore, figures of September 30, 2003
have been adjusted by Chilean CPI for the period of 1.6%.

Consolidated Revenues

In the quarter ended September 30, 2004 consolidated revenues
increased 13% to CLP 109.2 billion, compared to CLP 96.5 billion
in the same quarter of the previous year. This increase was
mainly due to a) higher sales to regulated customers of CLP 7.5
billion, which include sales to Chilectra, Chilquinta, Rio Maipo
and R.M. 88, attributable to the node price increase and higher
sales to Chilquinta, b) higher sales to the CDEC (spot market)
of CLP 10.7 billion, c) higher fuel sales and others of CLP 7.3
billion and d) higher one time transmission revenues of CLP 6.4
billion from Minera Escondida.

This increase was partially offset by a) lower sales to
Escondida of CLP 3.0 billion as a result of the renewed
contracted prices for both energy and capacity, b) lower sales
of Chivor in Colombia of CLP 4.3 billion and c) lower sales to
other customers in Chile of CLP 4.3 billion.

Consolidated Operating Costs

Consolidated operating costs increased 8% in the third quarter
of 2004 to CLP 66.5 billion compared to CLP 61.7 billion in the
third quarter of 2003. This increase in costs is due to a) a
raise of CLP 9.3 billion in fuel consumption in view of the
higher generation of our thermal plants of 254 GWh, excluding
El‚ctrica Santiago, which generated 99 GWh less than the third
quarter of 2003 due to the scheduled maintenance during
September of 2004, b) the increase of CLP 4.2 billion in higher
costs related to third parties costs and Colombian taxes
recorded in technical consultants and others, c) higher fixed
and fuel sales costs of CLP 1.8 million.

This increase was partially offset by a decrease of a) capacity
purchase of CLP 7.0 billion, as a consequence of the higher cost
provisions, which were reverted in the third quarter as a
consequence of the new regulation about capacity payments, and
b) energy purchased of CLP 2.0 billion due to a lower average
energy price compared to the third quarter of 2003 and c) other
costs of CLP 1.3 billion.

Consolidated Administration and sales costs

There was a slight raise of 1% in consolidated administration
and sales costs during the second quarter of 2004 as compared to
the second quarter of 2003. The main reason for this variation
was an increase of CLP 0.7 billion in the costs related to
salaries and employee benefits, municipality taxes and others.
This effect was offset by a decrease of CLP 0.6 billion in
system and communication items, external services and insurance.

Operating Income and EBITDA

The operating income for the third quarter of 2004 was CLP 38.3
billion, 26% higher than CLP 30.4 billion for the third quarter
of 2003. The operating income decrease is attributable to the
13% revenues increase mainly due to the higher sales to
regulated customers, partially offset by higher fuel consumption
costs In the quarter ended September 30, 2004, EBITDA margin
reached CLP 49.9 billion, 19% higher than the EBITDA of CLP 41.9
billion recorded in the quarter ended September, 2003. In dollar
terms, using the corresponding exchange rate, EBITDA increased
29% from US$ 63 million to US$ 82 million.

Non-Operating Results

During the third quarter of 2004, the Company's non-operating
loss was CLP 2.7 billion, 85% lower than the third quarter of
2003. This was mainly due to a) a lower foreign exchange
variation and price-level restatement of CLP 7.4 billion, b)
higher other non-operating income of CLP 5.8 billion related to
the positive impact form the sales of the Nacimiento steam plant
and the coal mine Carbones del Cesar, c) lower financial
expenses of CLP 3.1 billion due to lower indebtedness of the
Company after the restructuring process closed in the first half
of 2004, b) lower contribution from the equity share in net
income of related companies and other non-operating expenses of
CLP 2.3 billion. On the other hand, financial income decreased
CLP 3.5 billion due to the interests in 2003 related to the
mercantile account between AES Gener and the Holding Company
Inversiones Cachagua, which outstanding interests and principal
were paid on February 27, 2004.

Net Income

Net income for the quarter ended September 30, 2004 was CLP 26.5
billion, CLP 8.3 billion higher than the net income of CLP 18.2
billion for the period ended September 30, 2003. The main
variations are from higher revenues from regulated, fuel and
spot sales, and lower non-operating costs due to lower effect
related to foreign exchange variation, the positive effects of
the assets sold in the quarter and lower financial expenses.
These effects were partially offset by a higher income tax of
CLP 14.4 billion as a consequence of higher taxes in Colombia
due to the Colombian peso 7% appreciation during 2003.

AES Gener S.A. is the second largest electricity generation
group in Chile in terms of operating revenue and generating
capacity with an installed capacity of 2,428 MW composed of
2,157 MW of thermal and 271 MW of hydro generating capacity. The
Company is the first thermal generator in the Chile and serves
both the Central Interconnection System (SIC) and Northern
Interconnection System (SING). Through various subsidiaries and
related companies, AES Gener owns a dam-based hydroelectric
plant in Colombia with a total nominal operating capacity of
1,000 MW; a combined-cycle natural gas-fired unit with 643 MW of
installed capacity in Argentina, connected to the SING by a 345
kV transmission line of 408 kms; a 25% interest in a
thermoelectric generation facility located in Dominican Republic
with approximately 586.5 MW of installed capacity; and a 13%
interest in a natural gas transportation Company in Chile and
Argentina. AES Gener is 98.79% owned by The AES Corporation.

To view financial statements:
http://bankrupt.com/misc/3Q04AESGener.pdf

CONTACT: Mr. Daniel Aninat
         Phone: (562) 686 8940
         e-mail: daniel.aninat@aes.com



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

ECOPETROL: Fitch Affirms Ratings at 'BB'
----------------------------------------
Fitch Ratings has affirmed the foreign currency rating of
Ecopetrol S.A. (Ecopetrol) at 'BB' and the local currency rating
at 'BBB-'. Ecopetrol's ratings are strongly linked with the
credit profile of the Republic of Colombia (local and foreign
currency ratings of 'BBB-' and 'BB', respectively), the
Company's shareholder. The Rating Outlook is Stable.

The assigned ratings are supported by a strong financial
profile, successful reorganization efforts, sizable reserves,
and dominant domestic market share. These positives are tempered
by vulnerability to fluctuations in international commodity
prices, declining reserves and production activity, and
tightening environmental regulations. Fluctuations in energy
prices are mitigated by the Company's hedging policy to
guarantee minimum required payments to the government. As noted,
the rating of Ecopetrol is strongly linked to that of the
Colombian government, based on the Company's nature as a state-
owned entity and the government's ultimate ability to restrict
the Company's financial flexibility, including the possible
widening of the purposes of its borrowing to quasi-sovereign and
fiscal, rather than commercial, uses. The linkage is further
strengthened by the importance of Ecopetrol to public-sector
revenues and by the government's restrictions on Ecopetrol's
budget.

Ecopetrol has been facing declining production of crude oil and
may soon become a net importer of crude without significant new
discoveries. To address this, the Company has recently increased
its capital expenditures to expand its exploration and
production activities. The Company also needs to improve its
refineries to comply with more strict domestic environmental
standards, as well as increase its opportunity for exports.
Completion of a substantial capital-expenditure program at
Barrancabermeja and Cartagena, Ecopetrol's principal refineries,
should improve the Company's ability to grow revenues through
increased production of value-added products, improving
operating cash flow and reducing product import requirements by
2008.

Strong international crude oil and product prices have offset
declining volumes in the Cusiana and Cupiagua fields, which,
coupled with successful cost-reduction efforts, have allowed for
the strengthening of the Company's financial profile. However,
the absence of new exploratory finds and continued decrease in
production may challenge medium-term financial flexibility and
profitability. Current and forecasted credit protection measures
are solid for the rating category.

Ecopetrol is an integrated oil Company majority-owned by the
Colombian government. The Company's activities include
exploration for and production of crude oil and natural gas and
refining, transportation, distribution, and marketing of refined
products. Ecopetrol is Latin America's fourth-largest integrated
oil concern. Operations are organized into exploration and
production, refining and marketing, transportation, and
international commerce and gas.


* COLOMBIA: S&P Assigns 'BB' Rating Treasury Bonds
--------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' long-term
foreign currency rating to the Republic of Colombia's US$375
million worth of peso-denominated 11.75% Treasury bonds. The
bonds are payable in U.S. dollars at the prevailing Colombian
peso/U.S. dollar exchange rate and due in March 2010. Standard &
Poor's also said that it affirmed its 'BB' long- and 'B' short-
term foreign, and its 'BBB' long- and 'A-3' short-term local
currency sovereign credit ratings on Colombia. The outlook on
the ratings remains stable.

According to Standard & Poor's credit analyst Richard Francis,
the rating reflects the prospects of higher economic growth and
continued prudent fiscal policy that should help the government
come close to meeting its 2.5% overall public sector deficit
target in 2004-2005. A modest increase to 2.8%-2.9% would be
allowed in both years, provided the government receives
additional financing from privatization revenue.

"The country's economic growth prospects are also improving,
with economic growth now projected to rise by over 4% in 2004
and a similar level in 2005," said Mr. Francis. "The higher
growth reflects a sharp increase in investment and domestic
confidence due to President Alvaro Uribe's successful strategy
of improving national security while maintaining macroeconomic
stability. A bilateral free-trade agreement with the U.S.,
currently being negotiated, could also underpin growth prospects
over the medium term by increasing foreign direct investment and
boosting nontraditional exports," he added.

However, the government's underlying fiscal position remains
highly inflexible due to large, legally mandated transfers to
local governments and public pension systems and to the interest
on the government's debt.

"Further reform in the areas of taxes, transfers, and pensions
will therefore be needed over the next three years in order to
maintain fiscal discipline," noted Mr. Francis. "If there is
significant fiscal slippage or a sharp deterioration in the
nation's security, there could be renewed downward pressure on
the government's creditworthiness. If, on the other hand, fiscal
prospects improve further and the debt and interest burdens
decline, the ratings could improve," he concluded.



=====================
E L   S A L V A D O R
=====================

* EL SALVADOR: IMF Staff Mission Statement
------------------------------------------
The following statement was issued Wednesday in San Salvador by
an International Monetary Fund (IMF) staff mission:

"A mission from the IMF visited El Salvador during October 25-
November 10, 2004 to conduct the annual Article IV consultation
discussions. The mission met with a broad range of senior
government officials, members of congress, and representatives
of the private sector, labor unions, and analysts. The mission
thanks the authorities for the warm welcome and close
cooperation it has received during its stay in El Salvador.

"El Salvador's economy continued to face a challenging
environment in 2004. In particular, the sharp increase in world
oil prices and strong competition from Asia have dampened the
momentum of growth. On the positive side, while headline
inflation has picked up owing to higher oil prices, a prudent
wage policy has kept underlying inflation stable, and rising
family remittances have helped sustain income levels and contain
the external current account deficit.

"The mission discussed with the authorities the main challenges
that El Salvador faces in order to improve growth prospects and
social conditions, consolidate macroeconomic stability, and
increase the economy's resilience against shocks. We are
encouraged, in particular, by the broad recognition in El
Salvador of the urgent need to reduce the fiscal deficit and
place the public debt-to-GDP ratio on a firm downward path,
while strengthening the government's programs in critical social
and infrastructure areas. In this connection, the recent
approval by congress of new tax measures is most welcome, and
the mission encourages the authorities to take additional steps
in this direction. Their plans to reduce tax evasion and bring
informal activities into the tax base are very important to this
end.

"The mission also had wide-ranging discussions on the gamut of
structural reforms needed to strengthen productivity and
competitiveness. In particular, the mission supports ongoing and
planned steps to further strengthen the banking system, broaden
the role of private investment in infrastructure, and continue
advancing on trade opening. In particular, early approval of the
free-trade agreement with the United States (CAFTA) should
provide a new impetus to exports and investment. It will be
important to capitalize fully on these opportunities by
continuing the implementation of reforms to make the business
climate more favorable, improve human capital, and strengthen
the institutions supporting private economic activity.

"In light of the impressive record of structural reforms
implemented since the early 1990s, El Salvador has a clear
potential to achieve sustained rapid growth and social progress
in the years ahead. The mission encouraged the authorities to
continue to work toward broad national consensus on the
necessary reforms, and looks forward to our continuing close
cooperation and policy dialogue in support of this agenda. Upon
its return to Washington, the mission will prepare a report to
the IMF's Executive Board, as a basis for a Board discussion
tentatively scheduled for January 2005."

CONTACT:  INTERNATIONAL MONETARY FUND
          700 19th Street, NW
          Washington, D.C. 20431 USA

          IMF EXTERNAL RELATIONS DEPARTMENT
          Public Affairs: 202-623-7300 - Fax: 202-623-6278
          Media Relations: 202-623-7100 - Fax: 202-623-6772



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

AXTEL: Injects $40M in Tijuana Operation
----------------------------------------
AXTEL, S.A. de C.V., a Mexican telecommunications Company,
announced Wednesday the official commencement of its operations
in Tijuana, Baja California, the sixth city to be opened in
2004, in the presence of the Governor of the State, Eugenio
Elorduy Walther, who made the first call

During the opening event, Tomas Milmo Santos, AXTEL Chairman of
the Board of Directors and CEO, delivered a brief speech
thanking the Tijuana authorities and society for this
opportunity to become the new telephone Company in the
community.

The event was also attended by Samuel Lee, AXTEL Executive
Director for the North-Western Region; Jaime Charles, AXTEL
Director in Tijuana, as well as members of the state and
municipal cabinets, chairmen of chambers, entrepreneurs, and
other personalities.

It was reported that AXTEL's direct investment in Tijuana is in
the amount of $40 million dollars.

It was also pointed out by the Company that AXTEL's telephony
network has the capacity to provide the metropolitan area of
Tijuana with telephone services, Internet, and advanced data
services for the residential and business sectors.

"With the opening of Tijuana, the most important border town in
the country, we are successfully completing our geographical
expansion plan for 2004, which had been previously announced by
our CEO, Tomas Milmo Santos", said Samuel Lee.

"We are confident that, thanks to our cutting-edge technology
and the emphasis we always place on the quality of the services
we provide to our customers, we will soon become the first-
choice telecommunications Company for the Tijuana society."

AXTEL has reported to have 420 thousand lines operating in
Mexico City, Monterrey, Guadalajara, Puebla, Leon, Toluca,
Queretaro, San Luis Potosi, Aguascalientes, Saltillo, and Ciudad
Juarez.

At present AXTEL has the largest fixed wireless telephony
network in the world as well as the metropolitan fiber optic
networks with the most advanced technology in Latin America.

At present AXTEL has the largest fixed wireless telephony
network in the world as well as metropolitan fiber optic
networks with the most advanced technology in Latin America.

AXTEL is a Mexican telecommunications Company that provides
local telephone services, national and international long
distance services, data, Internet, virtual private networks, and
value added services. AXTEL has provided Mexico with a basic
telecommunications infrastructure through an intelligent network
that offers wide coverage to all markets. At present, it is
operating in Mexico City, Monterrey, Guadalajara, Puebla, Leon,
Toluca, Queretaro, San Luis Potosi, Aguascalientes, Saltillo,
Ciudad Juarez, and Tijuana.

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.


GALEY & LORD: Completes Sale to Patriarch Partners
--------------------------------------------------
Galey & Lord, LLC, a leading global supplier of denim, khaki and
corduroy fabrics for the fashion apparel and uniform markets,
announced that it has completed the sale of its assets to
Patriarch Partners, LLC and that the Company's operations have
emerged from bankruptcy. The U.S. Bankruptcy Court for the
Northern District of Georgia approved the sale on October 27,
2004 and it closed last night.

Galey & Lord, LLC operates domestically and internationally
through joint ventures in Europe, North Africa, Asia and Mexico.
Its customers include: VF, Gap, Old Navy, Banana Republic, Polo
Ralph Lauren, Abercrombie & Fitch, Levi's, Tommy Hilfiger, L.L.
Bean, Nautica, Eddie Bauer, Liz Claiborne, Haggar, Land's End,
and Tropical Sportswear / Savane, among others.


GRUPO DESC: S&P Issues Ratings Update
-------------------------------------
Rationale

The ratings on Desc S.A. de C.V. (Desc) and its auto-parts
subsidiary, Desc Automotriz S.A. de C.V., are equalized and
reflect the consolidation of the administrative and cash
management functions at the parent Company level.

The ratings are constrained by:

-- A weak financial profile;

-- The exposure of the Company's automotive parts business to
the "Big Three" automotive OEMs; and

-- The uncertain business climate faced by North American
chemical companies.

The ratings are supported by:

-- The Company's diversified portfolio of business, which holds
leading positions in Mexico's automotive parts, chemical, food,
and real estate industries;

-- Desc's export activities, which accounted for 43% of the
Company's total sales in 2003; and

-- The restructuring of its debt and recent equity issue.

Desc is a diversified holding Company and one of the largest
companies in Mexico. Its subsidiaries operate in the auto parts
(through Desc Automotriz), chemical, food, and real estate
sectors. Desc Automotriz is one of Mexico's largest independent
auto parts manufacturers. The Company produces 36 different
types of products, including light, medium, and heavy duty
manual transmissions; constant velocity joints; rear and front
axles; tappets; pistons and piston pins; stamped metal products;
propeller shafts; steel wheels; gears; and gaskets and seals.

Desc's consolidated results during 2004 reflect the progress of
the Company's efforts to improve its operating performance and
strengthen its financial position. Through the successful
completion of a capital increase of 2.7 billion pesos (about
$240 million) and other sources of liquidity, the Company has
reduced its total debt by $305 million during the year. The
aforementioned has had a positive impact on Desc's key financial
ratios for the first nine months of 2004. During the period, the
Company posted EBITDA interest coverage, total debt/EBITDA, and
FFO/total debt ratios of 2.5x, 3.6x and 13%, which compare
favorably to the 2.1x, 5.3x, and 4.8% posted in 2003.
Nevertheless, weakness in the automotive sector results
continues to weigh on the Company's operating and financial
performance.

Liquidity

Desc's liquidity remains tight. Nevertheless, it has improved as
a result of the Company's debt restructuring, equity issue, and
asset sales program. The Company's liquidity is supported by a
$112 million facility to support its working capital
requirements and a comfortable debt maturity profile over the
next 15 months, as debt maturities total $19 during the
remainder of 2004 and $20 million in 2005. Debt reduction has
increased the Company's covenant headroom and should aid its
free operating cash flow generation. Operating cash flow
generation during 2004 needed to reach about $100 million in
2004 to meet a CAPEX program of $75 million and debt maturities
of $29 million during the year. So far, operating cash flow
generation has been below expectations as a result of increased
working capital requirements due to higher raw material prices.
However, the aforementioned has been offset by the progress of
the Company's asset sales program.

Outlook

The negative outlook reflects the challenges faced by Desc to
improve its operating performance and financial profile.
Continued weakness in the Company's key financial ratios and
liquidity could lead to a negative rating action. Improvements
in the Company's operating performance, liquidity, and key
financial ratios could lead to a stable outlook.

PRIMARY CREDIT ANALYST: Jose Coballasi, Mexico City (52) 55-
5081-4414; jose_coballasi@standardandpoors.com


PEMEX: Nine-Month Results Show $1.3B Net Loss
---------------------------------------------
PEMEX, Mexico's oil and gas Company and the world's eight
largest integrated oil and gas company, announced its unaudited
consolidated financial results for the nine months ending
September 30, 2004.

FINANCIAL HIGHLIGHTS:

- Total sales increased 15%, compared to the first nine months
of 2003, reaching Ps. 554.6 billion (US$48.7 billion).
- Crude oil exports averaged 1,838 thousand barrels per day
(Mbd), up 1% from the first nine months of 2003.
- Income before taxes and duties increased 18% from the first
nine months of 2003, to Ps. 325.1 billion (US$28.5 billion).
- Net loss for the first nine months of 2004 decreased Ps. 2.1
billion from the comparable period of 2003, resulting in a net
loss of Ps. 14.6 billion (US$1.3 billion).

OPERATIONAL HIGHLIGHTS:

Total liquid hydrocarbons production during the first nine
months of 2004 totaled 3,839 Mbd, 2% greater than the production
achieved during the first nine months of 2003:

- Crude oil production increased 1%, to 3,395 Mbd
- Natural gas production rose 2% to 4,568 million cubic feet per
day (MMcfd)
- Natural gas liquids production increased 7% to 444 Mbd
- During the first nine months of 2004, gas flaring represented
3.5% of total natural gas production

OPERATING ITEMS

Exploration and production

Production Levels

During the first nine months of 2004, crude oil and natural gas
production totaled 3,395 Mbd and 4,568 MMcfd, respectively.
Heavy crude oil represented 73% of total crude oil production
for the period, and nonassociated natural gas was 34% of total
natural gas production.

Gas Flaring

During the first nine months of 2004, gas flaring represented
3.5% of total natural gas production, compared to 5.5% in the
same period of 2003.

Drilling Activity

During the first nine months of 2004, exploration drilling
activity rose 25% compared to the same period of 2003: to 74
exploratory wells from 59. Development drilling activity rose
31%: to 453 development wells from 347.

During the third quarter of 2004 drilling began on the Nap 1
offshore exploration well, in the Gulf of Mexico. Located in 700
meters (2,300 feet) of water, this is PEMEX's deepest offshore
well.

Akal - L

During the third quarter of 2004, the Akal - L processing
center, began operations in the Cantarell field. This state of
the art complex integrates the process of separating crude oil
and natural gas in one facility and provides greater operating
flexibility for the handling and distribution of hydrocarbons
which, among other things, facilitates maintenance of other
complexes in Cantarell without affecting production volumes.

Multiple Service Contracts

Bidding terms were announced on July 29 and August 17, 2004 for
the execution of works and services for four new blocks in the
Burgos Basin: Pandura - Anahuac, Ricos, Pirineo and Monclova.

These four blocks have generated significant interest, based on
the sale of bidding packages. The participation of 100% Mexican-
owned companies in this process is noteworthy. The contract for
the Pandura - Anahuac block will be assigned on November 9,
2004.
The proposals for the Ricos, Pirineo and Monclova contracts will
be received in January 2005. According to the terms of the
program, works for these four blocks will begin in 2005.

GAS AND BASIC PETROCHEMICALS

Gas Processing

Given the greater supply of natural gas and condensates for
processing, the production of dry gas from plants averaged 3,127
MMcfd in the first nine months of 2004. This represents an
increase of 4% compared to the average registered in the first
nine months of 2003. The production of gas liquids including
condensates was 444 Mbd, 7% higher than the first nine months of
2003.

Additional Cryogenic Plants

In the third quarter of 2004, PEMEX signed a contract for the
construction of a third modular cryogenic plant in the Burgos
Gas Processing Center (GPC) in Tamaulipas, in northern Mexico
This plant is in addition to the two modular cryogenic plants
that started operations in March and May of 2004. With a
processing capacity of 200 MMcfd of sweet wet gas and 6 Mbd of
condensates, this plant will increase recovery of liquid
hydrocarbons associated with the sweet wet gas produced in the
Burgos Basin.

In 2005, PEMEX expects to sign a contract for the construction
of a fourth modular cryogenic plant in the GPC Burgos, with the
same capacity as the third plant. Additionally, PEMEX is
currently carrying out the studies and procedures necessary for
the construction of a 30 Mbd pipeline that will transport
liquefied petroleum gas (LPG) from the GPC Burgos to Monterrey,
in northern Mexico.

REFINING

Processing

During the first nine months of 2004, processing of heavy crude
oil increased to 41% of the total crude oil processed, compared
to 35% in the same period of 2003 (see figure 2). This reflects
the improved processing capabilities of the Madero, Cadereyta,
Tula and Salamanca refineries. Diesel and gasoline production
increased 8% and 4%, respectively, while fuel oil production
declined 10%.

Refining Margin

PEMEX's refining margin increased 42%, to US$3.92 per barrel in
the first nine months of 2004, from US$2.76 per barrel in the
prior year period.

Minatitlan

The project for the reconfiguration of the Minatitlan refinery
was divided into six engineering, procurement and construction
(EPC's) packages. The first package (EPC-1) was awarded at the
end of 2003, beginning the reconfiguration project. The EPC-1
includes the construction of an access road, bridges and the
platforms for the plants. During the third quarter of 2004 two
EPC packages were assigned, the EPC-
2, which includes:

- A utilities plant
- A sour water treatment plant
- Integration works, caustic waste and effluents treatment and
the EPC -3, which includes the construction of:
- An atmospheric and vacuum distillation plant
- An intermediate distillates hydro-treatment plant
- A fluid catalytic cracker

Franchises

The number of franchised gas stations rose 13% to 6,755 as of
September 30, 2004, from 5,982 as of September 30, 2003.

PETROCHEMICALS

Petrochemicals Production

During the first nine months of 2004, total petrochemicals
production increased 3%, to 7,914 thousand tons (Mt), from 7,655
Mt in the comparable period of 2003. In particular, the
production of ethylene increased 3%.

Subsidiary Companies

On September 15, 2004, the Secretary of Energy was authorized to
carry out the merger of the following subsidiary companies of
PEMEX Petroqu¡mica:

- Petroqu¡mica Camargo, S.A. de C.V.
- Petroqu¡mica La Cangrejera, S.A. de C.V.
- Petroqu¡mica Cosoleacaque, S.A. de C.V.
- Petroqu¡mica Escol¡n, S.A. de C.V.
- Petroqu¡mica Morelos, S.A. de C.V.
- Petroqu¡mica Pajaritos, S.A. de C.V.
- Petroqu¡mica Tula, S.A. de C.V.

This merger is expected to be completed during 2005.

Fenix Project

On October 21, 2004, PEMEX announced the names of its partners
for the execution of the Fenix Project:

- Indelpro, S.A. de C.V. (affiliate of Alfa)
- Grupo Idesa, S.A. de C.V.
- Nova Chemicals Corporation

The Fenix Project requires budgetary approvals and, therefore,
it is still under discussion.

INTERNATIONAL TRADE

Crude Oil Exports

In the first nine months of 2004, PEMEX's crude oil exports
averaged 1,838 Mbd, 1% higher than the volume registered in the
first nine months of 2003. Approximately 87% of the total crude
oil exports were heavy crude oil (Maya) and the rest was light
and extra-light crude oil (Isthmus and Olmeca). 78% of the total
crude oil exports were to the United States, while the remaining
22% went to Europe (10%), the Far East (2%), and to the rest of
America (10%).

During the first nine months of 2004, the weighted average
export price of the Mexican crude oil basket was US$30.22 per
barrel, compared to US$26.41 per barrel in the comparable period
of 2003.

Refined Products and Petrochemicals

Exports of refined products in the first nine months of 2004
totaled 157 Mbd, 7% less than in the comparable period of 2003.
Exports of refined products consisted mainly of naphtha, long
residue, diesel and jet fuel. Exports of petrochemicals
increased 19%, to 693 Mt. Imports of refined products declined
slightly to 283 Mbd in the first nine months of 2004 from 284
Mbd in the first nine months of 2003. Imports of petrochemicals
decreased 55% to 207 Mt. Natural gas imports increased 2% to 754
MMcfd, compared to 739 MMcfd in the first nine months of 2003.

FINANCIAL RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004

Total Sales

Total sales (including the special tax on production and
services, IEPS) increased 15% in constant pesos to Ps. 554.6
billion (US$48.7 billion) for the first nine months of 2004,
compared to Ps. 480.6 billion in the comparable period of 2003.

Domestic Sales

Total domestic sales (including IEPS) increased 8% to Ps. 322.9
billion (US$28.4 billion) during the first nine months of 2004,
from Ps. 297.9 billion in the first nine months of 2003:

- Refined products sales volume increased 1% to 1,706 Mbd, from
1,685 Mbd. The IEPS generated by these sales decreased 36% to
Ps. 46.2 billion (US$4.1 billion) from Ps. 72.2 billion. Sales
of refined products4, net of IEPS, grew 22% to Ps. 214.4 billion
(US$18.8 billion) from Ps. 176 billion.

- Natural gas sales rose 20% to Ps. 50.3 billion (US$4.4
billion) from Ps. 42 billion. Natural gas sales volume increased
6% to 2,757 MMcfd from 2,592 MMcfd. The average sales price of
natural gas during the first nine months of 2004 was US$5.67 per
million of British Thermal Unit

- Petrochemical sales5 increased 56% to Ps. 12 billion (US$1.1
billion) from Ps. 7.7 billion. Petrochemicals sales volume grew
13% to 2,610 Mt from 2,308 Mt

Export Sales

Exports Export sales totaled Ps. 231.7 billion (US$20.3
billion), 27% higher than the export sales registered in the
first nine months of 2003 of Ps. 182.7 billion:

- Crude oil and condensates export sales increased 27% to Ps.
209.8 billion (US$18.4 billion) from Ps. 165.6 billion. Crude
oil exports volume rose 1% to 1,838 Mbd from 1,828 Mbd

- Refined products export sales rose 25% to Ps. 20 billion
(US$1.8 billion) from Ps. 16 billion. Refined products exports
volume fell 7% to 157 Mbd from 169 Mbd

- Petrochemical products export sales7 increased 73% f to Ps.
1.9 billion (US$0.1 billion) from Ps. 1.1 billion. The volume of
petrochemical products exports grew 19% to 693 Mt from 581 Mt

Costs and Operating Expenses

Costs and operating expenses increased 20% with respect to the
first nine months of 2003, reaching Ps. 225.9 billion (US$19.8
billion).

Cost of Sales

Cost of sales increased 24%, or Ps. 35.8 billion (US$3.2
billion), to Ps. 185.3 billion (US$16.3 billion). The increase
is composed of the following changes:

- Ps. 24.6 billion (US$2.1 billion) increase in operational
maintenance

- Ps. 11 billion (US$1 billion) increase in the cost of the
subsidiary companies' operations (mainly PMI) with third parties

- Ps. 5.7 billion (US$0.5 billion) increase in processing
expenses and purchases of imported products

- Ps. 1.9 billion (US$0.2 billion) increase in the cost of the
reserve for retirement payments, pensions and indemnities

- Ps. 1.2 billion (US$0.1 billion) increase in operating
expenses

- Ps. 0.1 billion (US$0.01 billion) increase in depreciation and
amortization expenses

- An offsetting favorable effect of Ps. 7.2 billion (US$0.6
billion) resulting from variation in inventories

- An offsetting favorable effect of Ps. 1.5 billion (US$0.1
billion) due to the elimination of the specific oil-field
exploration and depletion reserve, as a consequence of the
implementation of the successful efforts method for the
accounting of costs incurred in exploration, acquisition and
development of oil and gas reserves.

Transportation and Distribution Expenses

Transportation and distribution expenses increased 9% to Ps.
13.2 billion (US$1.2 billion) in the first nine months of 2004,
from Ps. 12.2 billion in the first nine months of 2003.

Administrative Expenses

Administrative expenses increased 4% to Ps. 27.4 billion (US$2.4
billion) in the first nine months of 2004, from Ps. 26.4 billion
in the first nine months of 2003.

Cost of the Reserve for Retirement Payments

The cost of the reserve for retirement payments, pensions and
indemnities increased 8% to Ps. 31.7 billion (US$2.8 billion) in
the first nine months of 2004 from Ps. 29.4 billion in the
comparable period of 2003. This cost is distributed among cost
of sales, transportation and distribution expenses and
administrative expenses.

Operating Income

Operating income in the first nine months of 2004 totaled Ps.
328.7 billion (US$28.9 billion), 12% higher than the comparable
figure for the first nine months of 2003 of Ps. 292.6 billion.

Comprehensive Financing Cost

The comprehensive financing cost decreased 58% to Ps. 8.6
billion (US$0.8 billion) in the first nine months of 2004
compared to Ps. 20.4 billion in the same period of 2003 (see
table 2).

Net Interest

Net interest expense increased 21% to Ps. 12.3 billion (US$1.1
billion) in the first nine months of 2004, from Ps. 10.2 billion
in the comparable period of 2003. Interest expense increased Ps.
5.4 billion, while interest income increased Ps. 3.3 billion.
The increase in net interest was primarily due to the Ps. 30.1
billion (US$2.6 billion) increase in the net debt.

Foreign Exchange Loss

The foreign exchange loss totaled Ps. 8.3 billion (US$0.7
billion) in the first nine months of 2004 as compared to a
foreign exchange loss of Ps. 18.4 billion in the first nine
months of 2003. This 55% decrease was primarily a consequence of
a lower depreciation of the Mexican peso against the dollar. The
depreciation of the Mexican peso against the US dollar from
December 31, 2002 to September 30, 2003 was 6.8%, while from
December 31, 2002 to September 30, 2004 it was 1.4%.

Monetary Gain

The monetary gain for the first nine months of 2004 was Ps. 11.9
billion (US$1 billion), representing a 47% increase over the
monetary gain during the first nine months of 2003 of Ps. 8.2
billion.

OTHER REVENUES

Net Revenues

During the first nine months of 2004, other net revenues
increased 28% to Ps. 5 billion (US$0.4 billion). The
corresponding figure for the first nine months of 2003 was of
Ps. 3.9 billion. The Ps. 1.1 billion (US$0.1 billion) increase
was mainly due to higher net income from the Deer Park refinery
in which PEMEX has participation, and to the revaluation of the
investment in shares of Repsol YPF, S.A. In the estimation of
the impairment of PEMEX Refinacion's fixed assets in the first
semester of 2003 -due to the application of the Accounting
Bulletin C-15

"Impairment of fixed assets and their disposal" - the cost of
handling products was completely assigned to distribution and
commercialization, ignoring that the refineries carry out part
of that function by their own means. Inclusively, the
refineries' expenses, already considered the operation of the
infrastructure for handling products As a consequence, the
recognition of the impairment of PEMEX Refinacion fixed assets
in other expenses for the first semester of 2004 was reverted
for the first nine months of 2004.

INCOME BEFORE TAXES AND DUTIES

Income Before Taxes

Income before taxes and duties during the first nine months of
2004 was Ps. 325.1 billion (US$28.5 billion), 18% higher than
the Ps. 276.1 billion observed in the same period of 2003.

Taxes and Duties

16% increase Petroleos Mexicanos and its subsidiary entities pay
taxes and duties equivalent to 60.8% of total sales8. In
addition, they pay a duty for exploration, gas, refining and
petrochemicals infrastructure.

During the first nine months of 2004, taxes and duties
(including IEPS) increased 16% to Ps. 339.7 billion (US$29.8
billion) from Ps. 292.8 billion during the same period of 2003.

Duty for Exploration, Gas, Refining and
Petrochemicals Infrastructure

The duty for exploration, gas, refining and petrochemicals
infrastructure replaces the prior excess gains duty and is equal
to 39.2% of the revenues from crude oil export sales in excess
of a threshold crude oil price set by the Mexican Government. In
2004, the threshold price is US$20.00 per barrel, compared to
US$18.35 per barrel in 2003.

The calculation of this duty is equal to that of the excess
gains duty to which PEMEX was subject prior to 2004. PEMEX paid
Ps. 22.5 billion (US$2 billion) in the first nine months of
2004, 63% above the Ps. 13.8 billion paid in the comparable
period of 2003.

The Income Law (Ley de Ingresos de la Federacion) for the fiscal
year 2004 establishes that: "the proceeds from this duty. will
be allocated to the investment in infrastructure in exploration,
gas, refining and petrochemicals that Petroleos Mexicanos and
its subsidiary entities perform."

Reimbursement of the duty for exploration, gas, refining and
petrochemicals infrastructure

Ps. 12.5 billion was received On September 30, 2004, PEMEX
received Ps. 12.5 billion from the Secretary of Finance for the
reimbursement of the duty for exploration, gas, refining and
petrochemicals infrastructure. PEMEX expects to receive at least
an additional Ps. 17 billion, approximately, for this concept
prior to the end of 2004.

This payment was recorded as an account payable pending
capitalization, in other short-term liabilities. If approved by
PEMEX's Board of Directors, the balance of this account will
capitalize PEMEX.

Net loss

In the first nine months of 2004, PEMEX recorded a net loss of
Ps. 14.6 billion (US$1.3 billion), compared to a net loss of Ps.
16.6 billion in the first nine months of 2003. The Ps. 2 billion
(US$0.2 billion) decrease in the net loss is explained by:

- An increase of Ps. 36.1 billion (US$3.2 billion) in operating
income
- An favorable effect of Ps. 12.9 billion (US$1.1 billion) in
the comprehensive financing cost due principally to the decrease
in the foreign exchange loss and other net revenues
- The offsetting effect of a Ps. 46.9 billion (US$4.1 billion)
increase in taxes and duties

EBITDA

EBITDA increased 22% to Ps. 378.8 billion (US$33.3 billion) in
the first nine months of 2004 from Ps. 310.6 billion in the
first nine months of 2003.

Total assets

As of September 30, 2004, total assets were Ps. 960.3 billion
(US$84.3 billion), representing a 12%, or Ps. 103.6 billion (US$
9.1 billion), increase with respect to total assets as of
September 30, 2003.

- Cash and cash equivalents increased 109%, or Ps. 65.6 billion
(US$5.8billion)
- Accounts receivable increased 20%, or Ps. 13.6 billion (US$1.2
billion)
- Inventory valuation increased 36%, or Ps. 9.6 billion (US$0.8
billion), as a result of higher hydrocarbon's prices.
- Properties and equipment rose 1%, or Ps. 3.4 billion (US$0.3
billion), reflecting new investments
- Other assets increased 8%, or Ps. 11.4 billion (US$1 billion),
mainly as a result of a revaluation of PEMEX's shareholdings in
Repsol YPF, S.A., through RepCon Lux

Total liabilities

Total liabilities increased 23% to Ps. 936.6 billion (US$82.2
billion), with respect to September 30, 2003.

- Short-term liabilities increased 42% to Ps. 161.4 billion
(US$14.2 billion), primarily as a result of the increase in
taxes payable and the reimbursement of the duty for exploration,
gas, refining and petrochemicals infrastructure, which is being
recorded as a liability pending capitalization

- Long-term liabilities increased 20% to Ps. 775.2 billion
(US$68.1 billion), due to the increase in long-term documented
debt Total debt is discussed at greater length under "Financing
Activities".

Reserve for Retirement Payments

The reserve for retirement payments, pensions and seniority
premiums increased 9% to Ps. 325.9 billion (US$28.6 billion)
from Ps. 299.4 billion as of September 30, 2003. The increase of
Ps. 26.5 billion (US$2.3 billion) resulted from:

- Ps. 13.9 billion (US$1.2 billion) increase in the annual
growth of covered employees, seniority, salaries, pensions and
other post-retirement benefits

- Ps. 8.7 billion (US$0.8 billion) increase due to changes in
actuarial assumptions

- Ps. 5.1 billion (US$0.4 billion) increase due to a decrease of
one year in the funding period

- An offsetting favorable effect of Ps. 1.2 billion (US$0.1
billion) due to an increase in pension plan assets Equity

Equity decrease of Ps. 71.5 billion

As of September 30, 2004, PEMEX's equity declined 75%, or Ps.
71.5 billion (US$6.3 billion) to Ps 23.7 billion (US$2.1
billion) from Ps. 95.2 billion as of September 30, 2003. The
reduction is primarily explained by an increase in accumulated
net losses of Ps. 50.3 billion (US$4.4 billion) that includes,
among other items, the payment of the minimum guaranteed
dividends to the Mexican Government of Ps. 10 billion in June
2004.

FINANCING ACTIVITIES

Financing requirements

2004 financing program

As of October 15, 2004, US$7.7 billion have been raised:
- US$4.3 billion in foreign capital markets
- US$2.4 billion in the Mexican capital market
- US$0.6 billion from export credit agencies (ECA's)
- US$0.4 billion in bank loans

Approximately 64% has been raised in foreign capital markets and
the rest in the Mexican market. Depending on market conditions,
PEMEX plans to start pre-funding its 2005 financing requirements
by approximately US$1 billion. The 2004 financing program,
excluding any pre-funding, totals between US$7 and US$8 billion.
The pre-funding will be raised primarily through bank loans and
ECA's.

2005 financing program

In 2005, PEMEX plans to raise approximately US$8.5 billion.
Around 56% will be raised in foreign capital markets and the
rest in the Mexican market.
- US$2 billion in foreign capital markets
- US$3 billion in the Mexican capital market
- US$1.3 billion from export credit agencies (ECA's)
- US$2.2 billion in bank loans

2005 CAPEX allocation

In 2005, projected capital expenditures are US$11.2 billion,
based on an exchange rate of Ps. 11.6 per dollar, and are
expected to be allocated as follows:

- Exploration 13%
- Production 72%
- Refining 10%
- Gas and basic petrochemicals 3%
- Petrochemicals 1.7%
- Others 0.3%

Nearly 88% of 2005 projected capital expenditures, or US$9.9
billion, will be in the form of PIDIREGAS.

Capital markets

Petroleos Mexicanos

On June 30, 2004, Petroleos Mexicanos obtained a syndicated
revolving credit facility that will be used to fund working
capital needs. The facility is divided in two tranches:

- US$600 million maturing on December 31, 2007 with an interest
rate of LIBOR plus 0.55%
- US$650 million maturing on June 30, 2009 with an interest rate
of LIBOR plus 0.75%

This syndicated revolving credit facility replaced two bankers
acceptance credit facilities totaling US$785 million, and a
commercial paper program of US$445 million.

Short-term bond program

Petroleos Mexicanos and the Mexican Trust F/163 established a
Ps.10 billion short term notes program, which will also be used
to fund working capital needs. Under this program, either
Petroleos Mexicanos or Trust F/163 may issue notes having
maturities of less than 360 days.

Master Trust
During the first nine months of 2004, the Pemex Project Funding
Master Trust, a Delaware trust controlled by, and whose debt is
guaranteed by PEMEX, issued:
- On June 15, 2004, US$1.5 billion of its floating-rate notes
due 2010
- On August 5, 2004, ?850 million of its 6.375% notes due 2016
- On September 28, 2004, US$1,750 million of its 7.75% perpetual
bond with an option to redeem in full since year five

Trust F/163

During the third quarter of 2004, Trust F/163 reopened its peso
bond issuances of October 2003. Including the first issuance on
October 24, 2003 and the reopenings of January and March, 2004,
the aggregate amount of the peso bonds issued totals Ps. 32.7
billion, distributed as follows:
- Ps. 13 billion of floating rate instruments due 2007
- Ps. 13.5 billion of floating rate instruments due 2009
- Ps. 6.2 billion of 8.38% instruments due 2010 RepCon Lux On
January 26, 2004, RepCon Lux S.A., a financing vehicle formed in
Luxembourg, issued US$1.37 billion of its 4.5% guaranteed
exchangeable due 2011.

These bonds are guaranteed by PEMEX and are exchangeable into
shares of Repsol YPF, S.A. or, at the option of the issuer, the
cash equivalent thereof.

TOTAL DEBT

As of September 30, 2004, total consolidated debt including
accrued interest was Ps. 485.3 billion (US$42.6 billion). This
figure represents an increase of 25%, or Ps.95.8 billion, as
compared to the figure recorded on September 30, 2003. Total
debt includes:
- Documented debt of Petroleos Mexicanos, the Pemex Project
Funding Master Trust, Trust F/163 and RepCon Lux, S.A.
- Notes payable to contractors
- Sale of future accounts receivable (representing Pemex Finance
debt of US$3.6 billion as of September 30, 2004)

Net debt, or the difference between debt and cash equivalents,
increased Ps. 30.1 billion, to Ps. 359.4 billion (US$ 31.6
billion) as of September 30, 2004, from Ps. 329.3 billion as of
September 30, 2003.

Short-term Debt

Total debt with a remaining maturity of less than twelve months
was Ps. 60.5 billion (US$5.3 billion) as of September 30, 2004,
including:

- Ps. 57.9 billion (US$5.1 billion) in documented debt
- Ps. 2.6 billion (US$0.2 billion) in notes payable to
contractors

As of September 30, 2003, the corresponding amounts were Ps.
48.3 billion and Ps. 2.1 billion, respectively and total short-
term debt was Ps. 50.4 billion.

Long-term Debt

Total long-term debt as of September 30, 2004 was Ps. 424.8
billion (US$37.3 billion). This figure includes:
- Ps. 376 billion (US$33 billion) in documented debt
- Ps. 11.9 billion (US$1 billion) in notes payable to
contractors
- Ps. 36.9 billion (US$3.3 billion) in sale of future accounts
receivable

As of September 30, 2003 these figures were Ps. 277.8 billion,
Ps. 14.1 billion and Ps. 47.2 billion, respectively and total
long-term debt was Ps. 339.1 billion.

Financial Ratios

The ratio of EBITDA to interest expense (excluding capitalized
interest) was 18.4 as of September 30, 2004, compared to 20.5 as
of the same date of 2003. The ratio of EBITDA to net interest
expense was 30.8 as of September 30, 2004, compared to 30.6 as
of September 30, 2003.

Increase of Duration

PEMEX is planning to increase the duration of its outstanding
debt in order to make it comparable to that of other oil and gas
companies with similar credit ratings.

Interest rate risk

PEMEX's policy is to maintain a balance between fixed and
floating rate liabilities, in order to mitigate the impact of
fluctuations in interest rates. As of September 30, 2004,
approximately 60% of PEMEX's debt exposure carried fixed
interest rate and 40% was at floating rates. As a consequence of
issuance of peso-denominated securities, the US dollar debt
exposure decreased nine percentage points from September 30,
2003 to the same date of 2004.

Crude oil price risk

In September 2004, PEMEX arranged a short term hedging program
in order to mitigate the impact of crude oil price volatility in
its cash flows. The program consists of the acquisition of
options in order to hedge against potential price crude oil
reductions for the rest of the year and applies to approximately
7% of its annual crude oil production.

OTHER RELEVANT TOPICS

PEMEX's fiscal regime

On October 28, 2004, the Chamber of Deputies approved a new
fiscal regime for PEMEX. Its effect is subject to the approval
of the Chamber of Senators. Under this scheme, PEMEX's
Exploration and Production fiscal contributions would be
established in the "Ley Federal de Derechos" and the fiscal
scheme of the rest of the Subsidiary Entities would continue to
be established in the "Ley de Ingresos de la Federacion".

The new fiscal scheme for PEMEX Exploration and Production
considers the following duties:
- Duty for hydrocarbons extraction, paid over the value of the
production of crude oil and natural gas (net of the one used for
production). This duty distinguishes crude oil from natural gas
production and separates existing from new hydrocarbons. The
existing crude oil would pay a rate from 35.1 to 74.8%,
depending on the sales price, and the new crude oil would pay a
25% rate. The existing gas would pay a rate of 15%, while the
new gas would pay a 10% rate. This duty would have exemptions of
up to 30 barrels of crude oil per well and up to one million
cubic feet of nonassociated natural gas per well

- Duty for hydrocarbons for the stabilization fund, paid over
the value of the extracted crude oil production, which would be
between 1% and 10%, depending on the average Mexican crude oil
export price, only if it exceeds US$22 per barrel

- Extraordinary duty for crude oil exports, paid over the value
of exports, of 13.1% when the average export price of the
Mexican crude oil basket exceeds the price estimated by the
Congress. This duty is accredited against the duty for
hydrocarbons for the stabilization fund

- Ordinary duty for hydrocarbons of 69% over the value of the
extracted production minus permitted deductions (part of the
investments, some costs and expenses, and the other duties) The
Subsidiary Entities with industrial activities (Refining, Gas
and Basic Petrochemicals and Petrochemicals) would be subject to
the tax regime for oil returns under the terms defined in the
"Ley de Ingresos de la Federacion". The new fiscal regime
pretends to strengthen PEMEX's competitiveness and to contribute
to improve its financial position.

To view financial statements:
http://bankrupt.com/misc/3Q04Pemex.pdf

CONTACT: Investor Relations
         Mr. Esteban Levin
         e-mail: elevin@dcf.pemex.com
                 or
         Ms. Celina Torres
         e-mail: ctorresu@dcf.pemex.com

         Phone: (5255) 1944 9700



=======
P E R U
=======

NUEVO CONTINENTE: Added to U.S. Drug Trafficker List
----------------------------------------------------
The U.S. Treasury Department on Wednesday added Peruvian airline
Nuevo Continente (f.k.a. Aero Continente) to the government's
list of entities suspected of links to drug trafficking, the AP
reports.

This means that Americans are prohibited from doing business
with the airline and maintains the blocking of the airline's
assets in this country, the department said.

In June, the U.S. government ordered, pending further
investigation, the freezing of any U.S. assets belonging to the
airline. That followed President Bush's decision to designate
the airline's founder, Fernando Zevallos Gonzales, as a
significant foreign narcotics trafficker, subject to U.S.
economic penalties.

Since that step in June, "the airline underwent various alleged
changes in ownership and changed its name to Nuevo Continente.
Despite the ostensible ownership changes, the airline was unable
to demonstrate to the satisfaction of the Treasury Department
that all ties with the airline's former owners had been
severed," the department said.

Nuevo Continente's pilots' association said last month it had
taken over the airline and said it was backed by a US$20 million
capital injection by U.S. Company Dream Sport Foundation, after
state oil Company Petroperu stopped selling fuel to the airline
on credit.

The airline was first shut down in July for lack of insurance
after the U.S. government placed Zevallos, the airline's
founder, on its drug kingpins list.



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

ANCAP: Moody's Affirms B3 Foreign Currency Issuer Rating
--------------------------------------------------------
Moody's Investors Service affirmed the B3 foreign currency
issuer rating of Uruguay's state-owned oil, alcohol and cement
Company ANCAP (Administracion Nacional de Combustibles, Alcohol
y Portland).

The ratings agency changed the outlook on the rating to stable
from negative in conjunction with the change of the outlook for
Uruguay's B3 long-term foreign currency country ceiling for
bonds and notes to stable from negative.

Moody's said ANCAP's B3 foreign currency issuer rating is linked
to Uruguay's B3 long-term foreign currency ceiling. The
Company's rating would most likely be upgraded if Moody's were
to upgrade Uruguay's B3 foreign currency ceiling.


* URUGUAY: Moody's Changes Ratings Outlook to Stable From Neg.
--------------------------------------------------------------
Moody's Investors Service changed its ratings outlook for
Uruguay's B3 foreign-currency country ceiling for bonds and
notes to stable from negative.

At the same time, Moody's also changed the outlook on the Caa1
foreign-currency country ceiling for bank deposits and on the B3
local-currency government bonds issuer rating to stable from
negative.

The stable rating outlook reflects Moody's view that, over the
horizon of the outlook, the authorities will take the necessary
policy actions to maintain a primary surplus to at least
stabilize the public debt ratios.

Uruguay's debt ratios remain high and are expected to decline
only gradually over the medium term, thus placing an important
constraint on the ratings, Moody's said.



                            ***********


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

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