TCRLA_Public/050126.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

          Wednesday, January 26, 2005, Vol. 6, Issue 18


                            Headlines


A R G E N T I N A

AGUAS ARGENTINAS: Government's Tarriff Denial Threatens Future
COMPANIA DE INVERSIONES: S&P Maintains 'raD' Ratings on Bonds
REPSOL YPF: Unveils $1.2B Investment Plan for 2005
TRANSENER: S&P Maintains `raD' Rating on Bonds


B R A Z I L

COPEL: Announces 5% Average Tariff Readjustment
VASP: Cancels Flights on Low Occupancy


C H I L E

AES GENER: Announces Acceptance Of Tender Offers


C O L O M B I A

ECOPETROL: Defies Panel's Decision to Rehire Workers
TELECOM: Pays Pension Debt Worth $204M


C O S T A   R I C A

ICE: Steep Rise in Overdue Accounts Prompts Board Query


E C U A D O R

PACIFICTEL: FS Expects Recovery Plan on Feb. 4
* ECUADOR: S&P Ups LT Credit Ratings to 'B-' From 'CCC+'


M E X I C O

DIRECTV HOLDINGS: Moody's Upgrades Ratings To Ba2 From Ba3
DIRECTV GROUP: Files Registration Statement for Offering
GRUPO POSADAS: Fitch Rates $75M Senior Notes Add-on 'BB-'
VITRO: Prepares to Inventory Global Greenhouse Gas Emissions


U R U G U A Y

UTE: Rate Hike Decision Expected This Week


V E N E Z U E L A

PDVSA: Shell Seeks Bigger Budget for 2005
PDVSA: To Analyze Posssible Orinoco Belt Projects With AVHI


     - - - - - - - - - -


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

AGUAS ARGENTINAS: Government's Tarriff Denial Threatens Future
--------------------------------------------------------------
The future of Aguas Argentinas hangs in the balance amid a
deepening dispute between the Argentine water provider and the
government. Aguas Argentinas, which is controlled by France's
Suez, is requesting a 60% tariff hike to fund water-supply
improvements. But the government has rejected the petition and
asked Aguas Argentinas to make an annual investment of ARS400
million (US$136 million) in improvements.

Planning Minister Julio De Vido has offered state help but not
for "free". De Vido said that the Argentine state would not make
a contribution "in the form of a subsidy".

A contribution could be made in return for a seat on the
Company's board, De Vido said, adding that the government is in
discussions with Aguas Argentinas about what role it might take
in the event that a State contribution is agreed.

But Aguas Argentinas said it would not accept any change to its
legal structure and, in practice, this rules out State
participation on its board.


COMPANIA DE INVERSIONES: S&P Maintains 'raD' Ratings on Bonds
-------------------------------------------------------------
Corporate bonds issued by Compania de Inversiones de Energia
S.A. were rated 'raD' by the Argentine branch of Standard &
Poor's International Ratings, Ltd., the National Securities
Commission of Argentina reveals on its web site.

The ratings were based on the Company's financial situation as
of September 30, 2004. The ratings agency added that the 'raD'
rating is issued to debts that are currently in default or whose
obligor has filed for bankruptcy.

The NSC described the affected bonds as "Obligaciones
Negociables autorizadas por AGE de Fecha 13.12.96", worth a
total of US$220 million. These bonds, which matured on April 22,
2002 were classified as "Simple Issue".


REPSOL YPF: Unveils $1.2B Investment Plan for 2005
--------------------------------------------------
Spanish-Argentine oil and energy company Repsol YPF SA (REP)
revealed a plan to invest US$1.2-billion this year, reports Dow
Jones Newswires.

The figure, which is 35% bigger than last year's spending, will
be earmarked for projects including gas and oil exploration and
production, refinery upgrades and a new office building.

Of the US$1.2 billion total, some US$750 million is earmarked
for drilling and oil and natural gas production. Unspecified
amounts will be spent in the modernization of the company's La
Plata and Lujan de Cuyo refineries and exploration that "will
develop traditional productive oil fields as well as new high
risk areas, especially offshore."

Another US$100 million will be spent on an ongoing expansion of
a pipeline in northern Argentina that the Company aims to have
online by midyear.

At the same time, Repsol intends to work with Argentina's new
state-run oil company, Enarsa, on the nation's largely untapped
offshore projects. As part of its charter, Enarsa won exclusive
rights to all offshore projects not under contract before the
state oil company's creation last year.

Repsol also revealed that it is interested in investing in the
construction of another northern pipeline from Bolivia that
would add another 20 million cubic meters a day beginning in
2007 or 2008. However, this year's investment plan excludes
spending on that project. Repsol said it is waiting for a
clearer signal from Bolivia, where congressional debate over a
new hydrocarbons law has been put on hold amid energy-related
protests.


TRANSENER: S&P Maintains `raD' Rating on Bonds
----------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintained the `raD' rating given to US$525 million worth of
corporate bonds issued by Transener S.A., says the CNV.

The bonds, which remain in default level, are described as
"Programa Global de Obligaciones Negociables simples no
convertibles en acciones, aprobado por Asamblea Gral. De
Accionistas de fecha Julio de 2001." These bonds, which were
issued under Program, matured on March 26, 2003.

The rating action is based on the Company's financial health as
of September 30, 2004.



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

COPEL: Announces 5% Average Tariff Readjustment
-----------------------------------------------
Brazilian electric power utility Companhia Paranaense de Energia
(COPEL) informed its shareholders and the capital market that,
by the Company's majority shareholder decision, electric bills
issued from February 1, 2005 will have a discount reduction to
due consumers - what will result in a 5% average tariff
readjustment.

This decision regards the implementation of part of the 14.43%
tariff readjustment granted to COPEL by ANNEL, through
Resolution # 146, of June 24, 2004.

Therefore, average discount granted to due consumers will now be
of 8.2%.

"Financially speaking, the decision is sensational for Copel,"
said Gustavo Gattass, of the UBS investment bank in Sao Paulo.
"The firm can now receive the revenues to which it had a right
but which weren't being charged because of a decision by the
management," he said.

If the 5% price hike is fully implemented, it would add some
BRL230 million per year to Copel's revenues, he said.

However, there are some concerns that the price hike may never
be fully implemented, Gattass said. Parana state Gov. Roberto
Requiao allowed cut some of the discounts in January 2004, only
to reintroduce them later in the year, he said.

CONTACT: Companhia Paranaense de Energia (COPEL)
         Investor Relations team
         Phone: (55-41) 222-2027
         E-mail: ri@copel.com

         Web site: http://http://www.copel.com/


VASP: Cancels Flights on Low Occupancy
--------------------------------------
Debt-laden Brazilian airline Viacao Aerea Sao Paulo SA (VASP)
cancelled flights, which have below 50% occupancy, over the
weekend.

The cancellation is in line with the airline's policy of not
taking off when occupancy falls below 50%, according to company
spokesman Mario Galvao.

VASP has been experiencing financial difficulties since the 2001
recession that hit the industry. The airline's debts include
BRL760 million ($1=BRL2.68) owed to the Federal Airport
Authority, known as Infraero, for airport charges not paid since
the 1990s.

Currently, Vasp is operating on a six-month emergency license
granted by the federal government pending presentation of a
comprehensive financial plan.



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

AES GENER: Announces Acceptance Of Tender Offers
------------------------------------------------
AES Gener S.A. announced Monday that it had accepted tenders
equal to approximately U.S.$ 399,645,000 (99.91%) of its
outstanding unregistered 7.50% Senior Notes due 2014 (the
"Existing Notes") in connection with its offer to exchange its
Existing Notes for 7.50% Senior Notes due 2014 issued by AES
Gener S.A. that have been registered under the Securities Act of
1933. The Company confirmed that, as previously announced, the
exchange offer expired at 5:00 p.m. New York City time, on
January 21, 2005 and the Company expects to settle the exchange
offer as soon as practicable thereafter.

You may request information related to the exchange offer from
Deutsche Bank Trust Company Americas at (800) 735-7777.

This notice shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation
or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state.

CONTACT: AES Gener S.A.
         Mariano Sanchez Fontecilla 310, Piso 3
         Santiago, Chile
         Phone: (56-2) 6868900
         Fax: (56-2) 6868991
         Web site: http://www.aesgener.cl/



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

ECOPETROL: Defies Panel's Decision to Rehire Workers
----------------------------------------------------
Colombia's state oil company Ecopetrol will rehire only two of
the 247 workers who were fired after taking part in a strike by
national labor union USO last April, company president Isaac
Yanovich, said adding 107 will return to their posts in
temporary positions.

The decision goes against a ruling by an arbitration panel that
says Ecopetrol should rehire roughly half of the fired workers.
The panel consisted of two Ecopetrol lawyers, two USO
representatives, and one chamber of commerce official.

Meanwhile, local newspapers report that 22 workers who were
fired will be compensated. Another 85 will receive pensions,
while three cases are pending.

USO called the strike after the government extended contracts
with private sector operators, claiming that such extensions
gave away Colombia's natural resources and would lead to the
privatization of Ecopetrol.


TELECOM: Pays Pension Debt Worth $204M
--------------------------------------
Colombia Telecomunicaciones (Telecom), the state-owned
communications outfit, crossed an important hurdle in its
liquidation with the payment of US$204 million in pension
liabilities over the last 18 months.

Business News Americas reports that the payment was sourced from
a percentage of the Company's revenues. As part of its
liquidation, Telecom has also sold assets in Inmarsat, Telmex
and Comcel. Liquidating agent Fiduciaria La Previsora says
proceeds from the deals came at around COP80 billion.

Overall, Telecom settled an estimated COP324 billion in debts
last year. Among the creditors paid were Banesto, Natexis,
Mitsui, Kleinwort Banco, ICO, Central Hispano and the Inter-
American Development Bank. Also, Telecom has inked debt payment
deals with Ericsson, Nortel and Siemens. The payment schemes
will reportedly result in savings totaling US$839 million for
the Company.

For 2005, Telecom has allotted COP827 billion for expense,
liability and pension payments beginning with a US$47 million
outlay on February 3.



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

ICE: Steep Rise in Overdue Accounts Prompts Board Query
-------------------------------------------------------
State-run electric and communications provider ICE expects to
report CRC11.4 billion in uncollected accounts for 2004. An
estimated 95 percent of this amount comes from the telecom
sector while the remaining 5 percent comes from its electric
operations.

Business News Americas reports that the high percentage of
overdue accounts, almost 5 percent of 2004's estimated CRC190
billion revenue, has triggered an investigation by the ICE
board. In 2004 the Company recorded 4,700 overdue accounts and
cut-off 56,000 mobile lines due to non-payment.

The spike in delinquent subscribers has been blamed on the
reduction in deposits for new lines. Deposits now reach as low
as CRC12,000 from CRC25,000. ICE mobile services director
Orlando Cascante says many costumers do not mind losing the
deposit when their lines are cut due to overdue payments.

Subscribers become delinquent if they have two or more unpaid
bills. Of the CRC11.4 billion in collectibles, CRC700 million
are overdue accounts while CRC10.2 billion are past the
collection phase.



=============
E C U A D O R
=============

PACIFICTEL: FS Expects Recovery Plan on Feb. 4
----------------------------------------------
Local communications provider Pacifictel must present additional
details of its 2005 turn-around plan by Feb. 4 or risk facing
legal sanctions from state holding company Fondo de Solidaridad
(FS), its main shareholder.

Business News Americas reveals that FS is pushing for the Plan's
completion so the Company can proceed with programs aimed at
improving profitability and efficiency. A government committee
overseeing Ecuador's communications sector has cautioned that
the Company could enter receivership if it fails to remedy its
deficiencies.

Pacifictel CEO Alberto Perez-Llona assures that the Company will
submit the documents by early February. Information from these
documents includes expansion plans, cost and debt reduction
programs and financial projections.

While a review of the plan remains pending, Pacifictel is
prohibited from awarding contracts or making purchases of more
than US$140,000. The Company projects capital investments of
US$360 million this year.


* ECUADOR: S&P Ups LT Credit Ratings to 'B-' From 'CCC+'
--------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term foreign
and local currency sovereign credit ratings on the Republic of
Ecuador to 'B-' from 'CCC+'. Standard & Poor's also affirmed its
short-term 'C' foreign and local ratings on Ecuador.

The outlook on the ratings is stable.

According to Standard & Poor's Ratings Services credit analyst
Lisa Schineller, the upgrade reflects more comfortable levels of
financing for the government's 2005 budget given access to
official funding amid a high-oil-price environment and ongoing
improvement in the debt burden.

"The government is expected to improve the profile of its
external debt during 2005, given an important financing cushion
(about US$400 million) from the World Bank and the Inter-
American Development Bank," said Ms. Schineller.

"This funding should be made available following the
International Monetary Fund's on-balance positive assessment of
macroeconomic management by the Ecuadorian government (as
contained in its 'Assessment Letter' to the World Bank)," she
added.

Ms. Schineller explained that Ecuador's plans to pursue a
swap/buy-back of its Global 2012 bond would reduce interest and
principal payments beginning in 2005 and 2006, respectively.
This follows liability management operations undertaken in 2004
using resources from the oil stabilization fund (FEIREP) that
improved the profile of domestically issued debt. Standard &
Poor's does not expect FEIREP to be used to finance the central
government deficit in 2005.

"The improved creditworthiness also reflects the decline in
Ecuador's government debt burden," Ms. Schineller said. "Net
central government debt is projected at around 39% of GDP in
2005, and central government interest payments are projected at
17% of revenue, down from over 20% several years ago. In
addition, President Lucio Guti‚rrez and his economic team, whose
management of demands for higher wages and pensions was better
than expected, are anticipated to continue to hold the line on
increased expenditure amid a high oil-price environment," she
noted.

However, central government payroll expenses are projected to
double by the end of 2005 from 2001 figures. Coupled with
interest and other nondiscretionary spending (earmarked revenue
and transfers to local governments), Ecuador's expenditure
flexibility is very limited. Subsidies on pensions and petroleum
derivatives (including cooking gas) further constrain room to
maneuver. Ms. Schineller added that the government has been
unable to push forward with politically difficult reform that
would fundamentally strengthen the fiscal accounts over the
medium term, which is needed to bolster Ecuador's fiscal
position ahead of a decline in world oil prices.

"The stable outlook balances the risk surrounding the
government's ability to cover its financing needs against calls
for additional spending given continued high oil prices," Ms.
Schineller said. "Advancement of fiscal measures to improve
expenditure and revenue flexibility and a coherent strategy to
increase private sector oil production could support improved
creditworthiness. Conversely, the ratings could come under
downward pressure if oil prices fall and the government cannot
adjust its fiscal balances accordingly," she concluded.

Primary Credit Analyst: Lisa M Schineller, New York
(1) 212-438-7352; lisa_schineller@standardandpoors.com

Secondary Credit Analyst: Sebastian Briozzo, New York
212-438-7342; sebastian_briozzo@standardandpoors.com



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

DIRECTV HOLDINGS: Moody's Upgrades Ratings To Ba2 From Ba3
----------------------------------------------------------
Approximately $2.7 Billion of Debt Securities Affected.

Moody's Investors Service has upgraded the debt ratings for The
DIRECTV Group, Inc.'s (DTVG) 100% owned subsidiary DIRECTV
Holdings LLC (DIRECTV). The DIRECTV ratings upgraded include:

- Senior implied ratings to Ba2 from Ba3;
- $1.012 billion senior secured term loan to Ba1 from Ba2;
- $250 million senior secured revolver (currently undrawn) to
Ba1 from Ba2;
- $1.4 billion senior unsecured notes to Ba2 from B1;
- Issuer rating to Ba3 from B2.

This concludes the review initiated on April 20, 2004 following
DTVG's sale of its 80.5% stake in PanAmSat to a private equity
group led by Kohlberg Kravis Roberts & Co., for a total of
approximately $4.1 billion.

The upgrade reflects the improving operating performance under
DIRECTV's new management team and its increased focus on the
core satellite pay-TV business. Management has simplified DTVG's
strategic focus by selling non-core assets, most of which have
been completed, and accordingly has generated substantial cash
balances for DTVG. The upgrade is also based on Moody's belief
that cash on hand at DTVG (as at September 30, 2004 DTVG held
$3.3 billion in cash) will be used for: maintaining strong
liquidity, funding share repurchases and/or dividends over the
intermediate-term, capital investment at DIRECTV, some minimal
cash needs for the recently restructured DIRECTV Latin America,
and some debt reduction which should positively affect credit
metrics. The upgrade also takes into account DIRECTV's scale of
operations as the second largest pay-TV provider in the US and
an integral part of the global satellite platform for DTVG's 34%
controlling shareholder, News Corporation (Baa3 senior
unsecured).

While Moody's anticipates some de-levering at DIRECTV, it also
expects management to adhere to its stated intention to allocate
cash to the operating subsidiary for capital investment to offer
local-to-local service in additional markets, a broader high
definition service, more advanced customer premise equipment,
and additional exclusive programming, all intended to positively
impact churn and better position DIRECTV for increasing
competition. With an estimated 14 million of owned and operated
subscribers at year-end 2004 and anticipated continued video
subscriber growth outpacing that of the cable industry, DIRECTV
continues to benefit from significant scale of operations which
we expect to drive healthy operating margins, limited
programming cost increases, and healthy free cash flow
generation before the cost of growing the subscriber base.
Subscriber acquisition cost (SAC) expense on a per subscriber
basis is expected to increase in the intermediate-term as the
company aggressively grows subscribers through increased
subsidization of more costly home premise equipment, higher
marketing expenses and increased cost of sales commissions.
Furthermore, we perceive last year's resolutions with the
National Rural Telecommunications Cooperative (NRTC) and Pegasus
and the company's decision to acquire the most suitable NRTC
affiliated subscribers (totaling about 1.4 million) as credit
positives, resolving long standing legal issues and regional
operational control. By acquiring the subscribers, DIRECTV
directly controls access to the newly acquired subscribers, more
easily markets and sells advanced services to them and further
leverages the DIRECTV brand to potential customers in the
related rural areas. As a result, in the acquired markets, we
anticipate DIRECTV increasing penetration, improving churn, and
moderately raising ARPU from this customer base.

The stable rating outlook incorporates Moody's expectation that
over the intermediate-term DIRECTV will experience continued
subscriber growth, offset by moderate growing annual SAC costs
per sub, continued rapid increases in subscriber retention
expenses, and higher churn rates. We expect DIRECTV to finish
this year at or near free-cash-flow break even with improving
prospects for next year.

The ratings reflect the moderate debt leverage and recently
improved credit metrics of the consolidated company (though DTVG
does not guarantee DIRECTV's debt) which are generally stronger
than metrics in the media industry Ba-rating category. However,
Moody's remains concerned given our expectation of an increasing
competitive environment facing the company in the intermediate
to long-term period as RBOCs begin selling video programming to
their existing customers and cable companies aggressively defend
their subscriber base with three or four-service bundled
offerings. Although we expect most of the RBOCs to initially
focus on the urban and sub-urban areas of their existing
footprints and on the more affluent segments of the market which
represents only a portion of DIRECTV's footprint, nevertheless
the inability of DIRECTV to provide its own multi-bundled
product leaves it very susceptible to churn increases,
subscriber erosion, ARPU decreases, and significant increases in
SAC and subscriber retention expenses which have been factored
into the rating. We expect retention costs to more than double
over the intermediate-term period, continuing the rising trend
from 2003 to 2004. Moody's concerns over the competitive
disadvantages of the pay-TV satellite industry, and the ability
of the company to defend its subscriber base from this
competitive threat or a material decline in its operating
margins from price competition and increased expenses, constrain
further credit ratings improvement.

The secured bank debt is secured by substantially all of the
domestic assets of DIRECTV and enjoys a guarantee from all of
DIRECTV's operating subsidiaries which is the reason for the
higher notching above the senior implied. Likewise, the senior
unsecured notes, which enjoy only a senior unsecured guarantee
from all domestic operating subsidiaries of DIRECTV are not
secured and therefore are subordinated to the bank debt and are
rated at the senior implied Ba2 level which requires less
notching between the most senior debt and that which is at the
second priority level. The evidence of operating company
guarantees for the secured and senior unsecured debt results in
the single-notched down Ba3 level for the Issuer Rating as
Issuer Ratings represent senior-unsecured and un-guaranteed
obligations.

Pro-forma for the acquisition of the NRTC affiliates, DIRECTV,
has approximately $3.3 billion of debt outstanding including the
impact of inter-company notes to DTVG. We expect total debt for
DIRECTV to equal slightly under 2.5 times EBITDA by year-end
2005 and just under 2.0 times EBITDA by year-end 2006,
comfortably within the company's existing covenants. Moreover,
total debt-to-free cash flow should fall to under 10 times by
year-end 2006 as well. The ratings also reflect historically
unpredictable operating performance, an intense level of
competition - currently with Echostar and the well entrenched
cable companies, as well as increasingly with the RBOCs -- and
escalating programming costs. As an important part of News
Corp.'s global satellite strategy, DTVG may strive for near-term
scale at the expense of free cash flow generation.

The DIRECTV Group, Inc. formerly Hughes Electronics Corporation,
headquartered in El Segundo, California, is a world-leading
provider of multi-channel television entertainment, and
broadband satellite networks and services. The DIRECTV Group,
Inc. is 34% owned by Fox Entertainment Group, Inc., which is
approximately 82% owned by News Corporation.

New York
Neil Begley
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Andris G. Kalnins
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653


DIRECTV GROUP: Files Registration Statement for Offering
--------------------------------------------------------
The DIRECTV Group, Inc. (NYSE:DTV) has filed a registration
statement with the Securities and Exchange Commission for a
proposed secondary offering of its common stock. The selling
stockholders, The General Motors Special Hourly Employees
Pension Trust, the General Motors Special Salaried Employees
Pension Trust and the Sub-Trust of the General Motors Welfare
Benefit Trust, will be offering to sell an aggregate of 110
million shares of common stock and intend to grant the
underwriters an option to purchase 16.5 million additional
shares held by them. The DIRECTV Group will not receive any of
the proceeds from the sale of shares in the proposed offering.

Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated will
serve as joint book running managers, with Citigroup Global
Markets Inc., Credit Suisse First Boston LLC and J.P. Morgan
Securities Inc. acting as co-managers for the proposed offering.

A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not
become effective. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration
statement becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of these securities in any State
in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws
of any such State.

A copy of the prospectus relating to these securities may be
obtained, when available, from Goldman, Sachs & Co., 85 Broad
Street, New York, New York 10004, (212-902-1171), Attn:
Prospectus Department, or from Morgan Stanley & Co.
Incorporated, 1585 Broadway, New York, New York 10036,
212-761-6775.

The DIRECTV Group, Inc. is a world-leading provider of digital
multichannel television entertainment, broadband satellite
networks and services. The DIRECTV Group is 34 percent owned by
Fox Entertainment Group, which is approximately 82 percent owned
by News Corporation.

CONTACTS:  The DIRECTV Group, Inc.
           Bob Marsocci, 310-964-4656


GRUPO POSADAS: Fitch Rates $75M Senior Notes Add-on 'BB-'
---------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB-' to Grupo Posadas,
S.A. de C.V.'s (Posadas) proposed add-on offering of US$75
million 8.75% unsecured notes due 2011. These notes are an
extension of the US$150 million 2011 senior notes issued this
past September. Proceeds of the offering are expected to be used
to refinance existing indebtedness. Fitch also affirms Posadas'
senior unsecured debt including the US$150 million notes due
2011 at 'BB-'. The Rating Outlook is Stable.

The ratings reflect Posadas' solid business position, strong
brand name, and multiple hotel formats. The company's presence
in all major urban and resort locations in Mexico, consistent
product offerings, and quality brand image have resulted in
occupancy levels above the industry average in Mexico. The
company's use of multiple hotel formats allows it to target both
domestic and international business travelers, as well as
tourists. Posadas' operations are primarily located in Mexico,
which limits diversification; approximately one-fifth of room
capacity is located outside Mexico.

In recent years, Posadas' business strategy has evolved toward
managing and leasing, as opposed to owning new hotel properties.
This strategy has allowed the company to lower capital
investment and related borrowing while maintaining room growth;
the average capital expenditure per additional room has fallen
to US$11,600 at year-end 2003 from more than US$100,000 in 2000.
The company's expansion plans over the next two years include
opening 25 hotels, 20 in Mexico and five in Brazil. These
properties will be mostly under the managed-hotel format, which
will lower Posadas' cash investment to approximately US$11
million versus US$278 million if it were to own the properties.

Posadas has ably managed its cost structure and developed
alternative revenue sources, in spite of the weak economic
conditions that ensued following the events of Sept. 11, 2001.
Expense per available room fell to US$10.50 in 2003 from
US$13.40 in 2000; in addition, Posadas has increased the
diversification of its revenue base through the development of
the Vacation Club concept, selling vacation ownership plans.
This business now accounts for approximately 17% of revenues
compared with 8% in 2000.

The company operates in a competitive and highly fragmented
lodging industry in Mexico. Over the past few years, rates have
been pressured due to growing room capacity in urban locations
and sluggish demand due to a weak Mexican economy. Occupancy
levels/rates in urban locations remain down 2 percentage points
and 9% in constant pesos, respectively, versus 2001
levels/rates. The company is exposed to adverse economic and
political events in Mexico, Argentina and Brazil that could
affect occupancy levels and rates.

The company has relatively high debt leverage with a ratio of
total adjusted debt to EBITDAR of 4.1 times (x), and adjusted
interest coverage, as measured by the ratio of EBITDAR to
financial expense plus rent expense, was 2.9x for the last 12
months ended Sep. 31, 2004. Credit statistics are solid for the
rating category. While profitability margins have been pressured
due to increased competition, lower occupancy/rates, and less
favorable room mix due to new openings, credit protection
measures have been stable, benefiting from lower interest
rates/expense and stable debt levels. Fitch expects gradual
improvement in credit protection measures as EBITDA gradually
recovers to 2000 levels and debt remains stable.

Grupo Posadas is the largest hotel operator in Mexico with more
than 30 years in business. The company operates 87 hotels and
16,487 rooms across Mexico (80% of total rooms), United States
(6%), Brazil (13%), and Argentina (1%). Approximately 73% of
rooms are in urban locations, with the remaining 28% in coastal
destinations. The company manages different hotel formats under
a combination of owned, leased and managed properties including
Fiesta Americana and Fiesta Inn in Mexico and Caesar Park and
Caesar Business in Argentina and Brazil.


VITRO: Prepares to Inventory Global Greenhouse Gas Emissions
------------------------------------------------------------
Consistent with the voluntary commitment made by Federico Sada,
Vitro's Chief Executive Officer, in March 2004, during the World
Economic Forum's summit in Davos, Switzerland, Vitro prepares to
inventory global greenhouse gas (GHG) emissions at its
manufacturing facilities.

Implemented by the World Economic Forum, this voluntary program
requires the active contribution of socially responsible
companies to develop a worldwide GHG inventory, which can lead
to actions to reduce the negative effect of these emissions on
the environment.

"Over the past nine months, we have studied the registration
protocol and the procedures that we must follow to carry out our
emissions inventory. We are ready to go to the next phase of
training the team who will inventory our manufacturing
facilities' emissions and adapt our systems to the registration
standards," said Antonio Silva, Vitro's Quality, Safety, and
Environment Director.

For many years, Vitro has been a leader in environmental
protection. By integrating strict environmental policies into
its total quality management system, the company has reinforced
its commitment to air, ground, and water conservation in the
communities that it serves.

By developing the GHG inventory, Vitro will incorporate a new
and valuable tool into its environmental management system; it
will enable the company to increase the efficiency of its
manufacturing processes by taking actions to reduce emissions
that increase the temperature of our planet.

With its participation in these types of initiatives, Vitro
reinforces its strategic commitment to environmental protection
and underscores its leadership in improving the state of the
world.

Vitro is a member of the World Business Council for Sustainable
Development and the World Economic Forum, two of the most
recognized international organizations to support global
sustainable development. Federico Sada is a member of the World
Economic Forum's International Business Council.

Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA), through its
subsidiary companies, is one of the world's leading glass
producers. Vitro is a major participant in three principal
businesses: flat glass, glass containers and glassware. Its
subsidiaries serve multiple product markets, including
construction and automotive glass; food and beverage, wine,
liquor, cosmetics and pharmaceutical glass containers; glassware
for commercial, industrial and retail uses. Vitro also produces
raw materials, equipment and capital goods for industrial uses.

Founded in 1909 in Monterrey, Mexico-based Vitro has joint
ventures with major world-class partners and industry leaders
that provide its subsidiaries with access to international
markets, distribution channels and state-of-the-art technology.
Vitro's subsidiaries have facilities and distribution centers in
nine countries, located in North, Central and South America, and
Europe, and export to more than 70 countries worldwide.

CONTACT: Media Monterrey
         Mr. Albert Chico Smith
         Vitro, S. A. de C.V.
         Pone: +52 (81) 8863-1335
         E-mail: achico@vitro.com

         Financial Community:
         Ms. Leticia Vargas
         E-mail:lvargasv@vitro.com
         Mr. Adrian Meouchi
         E-mail: ameouchi@vitro.com
         Vitro, S. A. de C.V.
         Phone: +52 (81) 8863-1210

         U.S. Contacts:
         Mr. Alex Fudukidis
         E-mail: afudukidis@breakstoneruth.com
         Mr. Susan Borinelli
         E-mail: sborinelli@breakstoneruth.com
         Breakstone & Ruth Int.
         Phone: (646) 536-7012 / 7018

         Web site: http://www.vitro.com



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

UTE: Rate Hike Decision Expected This Week
------------------------------------------
The board of Uruguay's state power provider UTE is likely to
decide within the week whether to raise rates not only for
industrial clients but also for residential customers, according
to Business News Americas.

UTE has been compelled to boost production from its
thermoelectric plants and to import electricity from Argentina
and Brazil due to lack of rain and higher demand.

Currently, UTE is receiving 400MW of electricity from Brazil and
will continue to do so until the end of February, according to
Uruguay's industry minister Jose Villar.



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

PDVSA: Shell Seeks Bigger Budget for 2005
-----------------------------------------
Royal Dutch/Shell has launched talks with Venezuelan oil company
Petroleos de Venezuela S.A. (PDVSA) to convince the latter to
increase its capital budget for 2005, reports Dow Jones
Newswires.

According to Shell executive Sean Rooney, PDVSA submitted last
year its 2005 budget, which is "lower than what we would like."

Shell produces 50,000 barrels of oil a day in the Lake Maracaibo
region. Rooney, who will become president of Shell's Venezuela
division on March 1, said the budget difference in question is a
fraction of the tens of millions of dollars Shell spends each
year in Maracaibo. Rooney added Shell could probably double its
Maracaibo output with the proper investment.


PDVSA: To Analyze Posssible Orinoco Belt Projects With AVHI
-----------------------------------------------------------
PDVSA president Rafael Ramirez met with the national
hydrocarbons association AVHI Friday to discuss the possibility
of forming a venture to study joint oil, gas and power projects
in the Orinoco belt, reveals Business News Americas.

Ramirez, who is also Venezuela's energy and oil minister, and
AVHI president Luis Grisanti revealed in a joint statement that
they discussed the "possibilities of businesses in the Gulf of
Venezuela for natural gas exploration and in the formation of
new strategic alliances in the Orinoco belt."

The Orinoco belt, which is already home to several large-scale
projects, is a major reservoir of extra-heavy crude, which runs
parallel to the Orinoco river. The Orinoco belt crude must be
improved before it can be refined.

AVHI has 22 member companies, including ChevronTexaco,
ExxonMobil, Mitsubishi, Petrobras, Repsol YPF, Shell and
Statoil.




                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
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Copyright 2005.  All rights reserved.  ISSN 1529-2746.

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