TCRLA_Public/050215.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

           Tuesday, February 15, 2005, Vol. 6, Issue 32

                            Headlines



A N T I G U A   &   B A R B U D A

LIAT: Gets Additional $11M Shareholder Capital


A R G E N T I N A

AGUAS ARGENTINAS: Makes ARS3.68 Million Payment Friday
BOSTON MEDICAL: Seeks Court Authorization to Reorganize
CIENTIFICA MOVI: Reorganization Successfully Finalized
CRESUD: 2Q05 Results Show Huge Gain In Net Profit
ELECTROTECNICA VAQUER: Reorganization Proceeds With Court OK

EPIRO S.A.: Court Designates Trustee for Bankruptcy
IMPSAT FIBER: Forms Special Committee to Seek Recap. Options
IRSA: Reports 6-Month Net Income of Ps.56.8 Mln
KRISCALDIS S.C.S.: Court Orders Liquidation
HISPAPEL S.R.L.: Court Converts Bankruptcy to Reorganization

SARSIS S.A.: Court OKs Voluntary Bankruptcy Plea
TAIPEI S.A.: Initiates Bankruptcy Proceedings
TELEFONICA DE ARGENTINA: Issues ARS250 Mln Worth of New Notes
TSBC SOCIEDAD ANONIMA: Liquidates Assets to Pay Debts


B R A Z I L

BANCO VOTORANTIM: S&P Assigns 'BB-' to $100M MTN


C H I L E

COCA COLA EMBONOR: S&P Releases Report on Ratings
CRT: Parent Teeters on Edge of Bankruptcy


C O L O M B I A

* REPUBLIC OF COLOMBIA: S&P Affirms Ratings; Outlook Stable


J A M A I C A

KAISER ALUMINUM: Court Approves $200M DIP Credit Facility


M E X I C O

BALLY TOTAL: S&P Downgrades Ratings, Lowers Outlook
CINTRA: ASPA Reiterates Approval for New Sale Scheme
GRUPO MEXICO: Bear Stearns Cuts Equity Recommendation
TFM: Fitch Affirms Ratings At 'B+'


P A R A G U A Y

* PARAGUAY: Posts Highest GDP Growth in 10 Years - IMF


U R U G U A Y

YACYRETA: Argentina, Paraguay Ministers to Meet With Residents


V E N E Z U E L A

PDVSA: Meets With Russia, US Heads to Ratify Investment Interest
PDVSA: US Expansion Plans Delayed Pending Negotiations


     - - - - - - - - - -


=================================
A N T I G U A   &   B A R B U D A
=================================

LIAT: Gets Additional $11M Shareholder Capital
----------------------------------------------
Caribbean carrier LIAT will have more room to restructure its
operations after shareholders injected US$11 million to boost
the ailing airline. The Barbados Advocate says that the
Company's Chairman of the Board, Mr. Jean Holder, announced this
development during a press briefing in St. Vincent.

At the same time, Mr. Holder downplayed rumors of an impending
merger between LIAT and BWIA, another troubled Caribbean
carrier. He explained that combining two cash-strapped companies
may not result in a stronger unit and that each company is
opting to iron-out its finances before considering a merger.

Mr. Holder however did not close the door on the possibility of
cooperation between LIAT and BWIA.

CONTACTS:  ANTIGUA (ANU)
           City Ticket Office
           Woods Center, St. John's

           BARBADOS (BGI)
           Oliver Haywood
           E-mail: haywoodo@liatairline.com
           Tel.: 246 428 8888
                 246-436-9753
                 246-426-7140

           ST.LUCIA (SLU)
           Josse Mesmin
           E-mail: mesminj@liatairline.com
           Tel: 758 452 3051/2

           ST.VINCENT (SVD)
           Dominique Patterson
           E-mail: pattersond@liatairline.com
           Tel: 784 457 1821



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

AGUAS ARGENTINAS: Makes ARS3.68 Million Payment Friday
------------------------------------------------------
Water provider Aguas Argentinas met Friday's deadline of a
ARS3.68 million installment payment for a trust fund between
ARS42 million and ARS44 million, reports Dow Jones Newswires.
Aguas Argentinas, which is controlled by French utility Suez,
deposited the funds into an account at state-owned Banco de la
Provincia, a company official said, adding that the company made
the payment as "a symbol of goodwill to keep negotiating."

In a letter delivered to Argentine water regulator ETOSS
Thursday, the company called the payment "a voluntary
contribution...within the framework of the contract negotiation,
in which case it should be taken as a deposit for any trust fund
that the parties will agree on in the future."

The trust fund, which was first established in a January 2001
agreement, calls for Aguas Argentinas to kick in 7.9% of what it
collects from each water bill. Argentine President Nestor
Kirchner has repeatedly blasted the company in public remarks
for failure to meet investment commitments, while Suez says it
is still smarting from the 2002 "pesification" of contracts and
subsequent rate freeze.


BOSTON MEDICAL: Seeks Court Authorization to Reorganize
-------------------------------------------------------
Boston Medical Group S.A., a clinic operating in Buenos Aires,
requested for reorganization after failing to pay its
liabilities. The reorganization petition, once approved by the
court, will allow the company to negotiate a settlement with its
creditors in order to avoid a straight liquidation.

The case is pending before Court No. 17 of the city's civil and
commercial tribunal. Clerk No. 33 assists the court on this
case.

CONTACT: Boston Medical Group S.A.
         Rivadavia 954
         Buenos Aires


CIENTIFICA MOVI: Reorganization Successfully Finalized
------------------------------------------------------
The reorganization of Corrientes-based Cientifica Movi S.R.L.
has ended. Data revealed by Infobae indicated that the process
was concluded after Court No. 9 of the city's civil and
commercial tribunal homologated the debt agreement signed
between the Company and its creditors.

CONTACT: Cientifica Movi S.R.L.
         Cordoba 1491
         Corriente
         Phone: 03783-432869
         E-mail: movi@arnet.com.ar


CRESUD: 2Q05 Results Show Huge Gain In Net Profit
-------------------------------------------------
Cresud S.A.C.I.F. y A. (Nasdaq: CRESY) (BCBA: CRES), a leading
Argentine producer of agricultural products, announced Friday
results for Second Quarter Fiscal Year 2005 ended December 31,
2004. Results for the first semester of fiscal year 2005 showed
a net profit of Ps. 9.5 million as compared to a Ps. 4.8 million
profit registered during the same period of the previous Fiscal
Year, denoting a 100.2% increase.

The increase in the net result is mainly a consequence of: (i)
the higher results registered in our cattle stock holdings
(generated by a stronger market value), which went from Ps. 1.3
million during the same period of fiscal year 2004 to Ps. 6.3
million for the current semester, (ii) and the performance of
our share in IRSA Inversiones y Representaciones S. A. (NYSE:
IRS) (BASE: IRSA), which went from Ps. 1.8 million for December
2003 to Ps. 14.0 million at December 31, 2004; mainly offset by
lower results from exchange differences generated by assets and
liabilities, which decreased from a Ps. 1.9 million profit
during the first semester of fiscal year 2004 to a Ps. 1.0
million loss for the current semester.

    HIGHLIGHTS

-- Net profit corresponding to the first semester of FY 2005
amounted to Ps. 9.5 million, 100% above that registered for the
same period of the previous fiscal year.

-- Sunflower, corn and soybean farming are having satisfactory
developments and higher yields are expected to offset lower
prices expected for the fiscal year.

-- At December 31, 2004, 87% of the area destined to wheat was
harvested, obtaining a 3.98 tons per hectare yield, surpassing
Company's forecasts.

-- We are close to the inauguration of dairy farm facilities
with state-of-the-art technology, which will allow us to
increase our production to 36,000 liters of milk per day.

-- We have signed bills of sale for two farms that will generate
earnings of US$ 7.0 million, which will be reflected in the next
quarters of the current fiscal year.

-- We expect the development of the additional 6,000 Has. in Los
Pozos to be finished in the short term, in order to exploit them
during the next fiscal year.

                            Cresud S.A.C.I.F. y A.
                             Financial Highlights
                         Expressed in Argentine Pesos

                               IIQ  FY 2005         IIQ FY 2004

    Total Sales                  35,242,675          29,398,444
    Gross Income (Loss)           6,443,402           8,210,240
    Operating income              7,058,416           5,486,663
    Financial results, net       (2,194,831)            602,205
    Net Income (Loss)             9,533,737           4,762,156
    Earnings per share                 0.06                0.04
    Earnings per share diluted         0.04                0.04

    Current Assets               94,272,433          71,651,858
    Non-current Assets          604,353,092         523,600,188
    Total Assets                698,625,525         595,252,046
    Current Liabilities          66,430,787          12,520,393
    Non-current Liabilities     152,099,365         151,890,701
    Total Liabilities           218,530,152         164,411,094
    Minority Interest                 5,366             104,178
    Shareholder's Equity        480,090,007         430,736,774

Cresud is a leading Argentine producer of basic agricultural
products and the only such company with shares listed on the
Buenos Aires Stock Exchange and Nasdaq. The Company is currently
involved in various operations and activities, including crop
production, cattle raising and fattening, milk production and
certain forestry activities. Most of its farms are located in
Argentina's pampas, one of the largest temperate prairie zones
in the world and one of the richest areas of the world for
agricultural production.

CONTACT:  Gabriel Blasi -- CFO
          +011-54-11-4323-7449
          E-mail: finanzas@cresud.com.ar
          Web site: http://www.cresud.com.ar


ELECTROTECNICA VAQUER: Reorganization Proceeds With Court OK
------------------------------------------------------------
Electrotecnica Vaquer S.A. will begin reorganization following
the approval of its petition by Court No. 22 of Buenos Aires'
civil and commercial tribunal. The opening of the reorganization
will allow the company to negotiate a settlement with its
creditors in order to avoid a straight liquidation.

Mr. Alberto D. del Castillo will oversee the reorganization
proceedings as the court-appointed trustee. He will verify
creditors' claims until March 29. The validated claims will be
presented in court as individual reports on May 10.

The trustee is also required by the court to submit a general
report essentially auditing the company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. This report will be presented
in court on June 21.

The Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the company's
creditors for approval, is scheduled on October 18.

CONTACT: Electrotecnica Vaquer S.A.
         Avda General Hornos 1300
         Buenos Aires

         Mr. Alberto D. del Castillo, Trustee
         Presidente Peron 1558
         Buenos Aires


EPIRO S.A.: Court Designates Trustee for Bankruptcy
---------------------------------------------------
Buenos Aires accountant Maximo Conrado Piccinelli was assigned
trustee for the bankruptcy of local company Epiro S.A., relates
Infobae. Mr. Piccinelli will verify creditors' claims until
March 14 next year, the source adds. The city's Court No. 13
holds jurisdiction over the Company's case. Clerk No. 26 assists
the court with the proceedings.

CONTACT: Mr. Maximo Conrado Piccinelli, Trustee
         Montevideo 666
         Buenos Aires


IMPSAT FIBER: Forms Special Committee to Seek Recap. Options
------------------------------------------------------------
Impsat Fiber Networks, Inc. (the "Company"), a leading provider
of integrated broadband data, Internet and voice
telecommunications services in Latin America, announced the
formation of a Special Committee of the Company's Board of
Directors (the "Special Committee") constituted by Mr. Ricardo
Verdaguer (Chairman and Chief Executive Officer) and Mr. Ignacio
Troncoso, acting in their capacity as disinterested directors.

The remaining board members are affiliated with Morgan Stanley &
Co. Incorporated ("Morgan Stanley") or WRH Partners Global
Securities L.P. and its affiliates ("WR Huff"), two of the
Company's principal securityholders.

The formation of the Special Committee follows the November 23,
2004 filing by the Company with the U.S. Securities and Exchange
Commission ("SEC") reporting that the Company had been informed
that pursuant to a bidding procedure, Morgan Stanley and WR Huff
(via participation) had acquired from Nortel Networks Limited
("Nortel") all of the debt securities originally issued to
Nortel by the Company or its operating subsidiaries as part of
the Company's Chapter 11 plan of reorganization which was
consummated in the first quarter of 2003.

The Special Committee will explore recapitalization alternatives
for the Company. These alternatives may take the form of a
repurchase, refinancing or rescheduling of payment terms of
indebtedness of the Company and/or its operating subsidiaries, a
potential capital infusion, or other types of transactions.
There can be no assurance, however, that any such transaction
will be successfully negotiated or consummated.

The Special Committee has retained Lehman Brothers Inc. as its
exclusive financial advisor.

About Impsat

Impsat Fiber Networks, Inc. is a leading provider of private
telecommunications network and Internet services in Latin
America. The Company offers integrated data, voice, data center
and Internet solutions, with an emphasis on broadband
transmission, including IP/ATM switching, DWDM, and non-zero
dispersion fiber optics. Impsat provide telecommunications, data
center and Internet services through its networks, which consist
of owned fiber optic and wireless links, teleports, earth
stations and leased satellite links. The Company owns and
operates 15 metropolitan area networks in some of the largest
cities in Latin America, including Buenos Aires, Bogota,
Caracas, Quito, Guayaquil, Rio de Janeiro and Sao Paulo. It has
also deployed fifteen facilities to provide hosting services.
Impsat currently provides services to nearly 3.000 national and
multinational companies, financial institutions, governmental
agencies, carriers, ISPs and other service providers throughout
the region. Impsat operates in Argentina, Colombia, Brazil,
Venezuela, Ecuador, Chile, Peru and the United States and also
provide services in other countries in Latin America.

CONTACT: Impsat Fiber Networks, Inc.
         Mr. Hector Alonso
         Chief Financial Officer
         Mr. Santiago F. Rossi
         Investor Relations
         Phone: 54.11.5170.6000

         Web site: www.impsat.com

                  or

         Citigate Financial Intelligence
         Mr. Robin Weinberg
         Mr. John McInerney
         Phone: 201.499.3500


IRSA: Reports 6-Month Net Income of Ps.56.8 Mln
-----------------------------------------------
IRSA Inversiones y Representaciones Sociedad Anonima (NYSE: IRS)
(BCBA: IRSA), the largest real estate company in Argentina,
announced second quarter fiscal year 2005 results.

Net income for the six-month period ending December 31, 2004,
was Ps.56.8 million, or Ps.0.224 per share, while earnings per
diluted share totaled Ps.0.121, compared with a gain of Ps.32.4
million, or Ps.0.152 per share (Ps.0.101 per diluted share) for
the same period in the previous year.

Consolidated net sales for the six-month period totaled Ps.185.2
million, compared with Ps.124.1 million in the same period the
previous year.

The various segments' share in net sales was the following:
Sales and Development, Ps.27.5 million; Office and Other Rental
Properties, Ps.8.9 million; Shopping Centers, Ps.103.6 million;
and Hotels, Ps.45.3 million.

Operating income recorded significant growth of 142.4%, from
Ps.24.5 million in the second quarter of FY 2004 to Ps.59.3
million in the second quarter of FY 2005.

HIGHLIGHTS

-- Net income for the second quarter of FY 2005 was Ps.56.8
million, compared to Ps.32.4 million for the second quarter FY
2004. Operating income grew 142.4% from Ps.24.5 million to
Ps.59.3 million. EBITDA was Ps.93.6 million, 55.7% higher than
the same quarter of the previous fiscal year.

-- In view of the great opportunity presented by the attractive
market prices and the boom and great potential the shopping
center industry is experiencing, the company decided to increase
its stake in APSA, reaching 60.7%.

-- In December, the exercise of IRSA warrants generated US$1.1
million. Furthermore, during the six-month period, financial
debt was reduced by US$0.9 million as a result of the conversion
of IRSA Convertible Notes.

-- Average occupancy of offices continues to recover, reaching
85% for the first six months of FY 2005, compared with 73% for
the second quarter of the previous fiscal year.

-- The hotel industry showed a highly positive performance.
Average occupancy rates grew significantly, reaching 77% in the
second quarter of FY 2005, compared to 67% for the second
quarter of FY 2004. Average prices increased from Ps.265 to
Ps.314.

-- Boosted by the ABC1 segment boom, we are evaluating several
projects. Furthermore, we continue developing San Martin de
Tours, Cruceros Dique 2, Edificios Dique 3 and Emprendimiento El
Encuentro.

-- APSA's operating income grew 97.6% over the same quarter a
year ago, reaching Ps.42.4 million. EBITDA grew 42%, reaching
72.5 million during the semester.

-- Tenants sales increased 32%; shopping center occupancy was
98.5%.

-- APSA acquired 49.9% of Perez Cuesta S.A.C.I., controlling
company of Mendoza Plaza Shopping, increasing its ownership in
the corporation to 68.8%.

-- On November 9, we opened the first stage of Alto Rosario
Shopping, with the occupancy rate at 99.1%.

                             Financial Highlights
                      (In thousands of Argentine Pesos)
                                12-31-04                12-31-03

    Total Sales                   185,245                124,081
    Operating Income               59,323                 24,470
    Financial Results, Net         -9,744                 33,970
    Net Income                     56,760                 32,413
    Net Income per GDS               2.24                   1.52
    Net Income per GDS Diluted       1.21                   1.01

                                 12-31-04               06-30-04
    Total Current Assets          303,105                261,651
    Total Non Current Assets    2,042,997              1,941,293
    Total Assets                2,346,102              2,202,944
    Short-Term Debt               174,362                135,127
    Total Current Liabilities     331,753                256,022
    Long-Term Debt                458,796                468,807
    Total Non Current Liabilities 543,767                516,831
    Total Liabilities             875,520                772,853
    Minority Interest             430,009                470,237
    Shareholders' Equity        1,040,573                959,854

IRSA is Argentina's largest, most well-diversified real estate
company, and it is the only company in the industry whose shares
are listed on the Bolsa de Comercio de Buenos Aires and The New
York Stock Exchange. Through its subsidiaries, IRSA manages an
expanding top portfolio of shopping centers and office
buildings, primarily in Buenos Aires. The company also develops
residential subdivisions and apartments (specializing in high-
rises and loft- style conversions) and owns three luxury hotels.
Its solid, diversified portfolio of properties has established
the Company as the leader in the sector in which it
participates, making it the best vehicle to access the Argentine
real estate market.

CONTACT:  Alejandro Elsztain - Director
          Gabriel Blasi - CFO
          +(5411) 4323 7449
          E-mail: finanzas@irsa.com.ar
          URL: http://www.irsa.com.ar


KRISCALDIS S.C.S.: Court Orders Liquidation
-------------------------------------------
Kriscaldis S.C.S. prepares to wind-up its operations following
the bankruptcy pronouncement issued by Court No. 6 of Buenos
Aires' 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. Juan Gerchkovich as
trustee. He will be reviewing creditors' proofs of claims until
April 13. Clerk No. 12 assists the court on this case that will
end with the disposal of the company's assets to repay its
liabilities.

CONTACT: Mr. Juan Gerchkovich, Trustee
         Lavalle 1882
         Buenos Aires


HISPAPEL S.R.L.: Court Converts Bankruptcy to Reorganization
------------------------------------------------------------
Hispapel S.R.L. of Buenos Aires proceeds with reorganization
after Court No. 6 of the city's civil and commercial tribunal
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 an outright liquidation.

Mr. Mauricio Rosemblum, the court-appointed trustee, will verify
creditors' proofs of claims until April 13. Creditors with
unverified claims cannot participate in the Company's settlement
plan.

CONTACT: Mr. Mauricio Rosemblum, Trustee
         Bartolome Mitre 2296
         Buenos Aires


SARSIS S.A.: Court OKs Voluntary Bankruptcy Plea
------------------------------------------------
Court No. 6 of Buenos Aires' civil and commercial tribunal
declared Sarsis S.A. bankrupt, says La Nacion. Court-appointed
trustee Reinaldo Pireni will examine and authenticate creditors'
claims until April 8. 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. The city's Clerk
No. 11 assists the court on the case that will conclude with the
liquidation of the Company's assets.

CONTACT: Sarsis S.A.
         Culpina 178
         Buenos Aires

         Mr. Reinaldo Pireni, Trustee
         Avenida Callao 930
         Buenos Aires


TAIPEI S.A.: Initiates Bankruptcy Proceedings
---------------------------------------------
Court No. 6 of Buenos Aires' civil and commercial tribunal
declared Taipei S.A. "Quiebra," reports Infobae. Mr. Roberto
Boffa, who has been appointed as trustee, will verify creditors'
claims until April 26 and then prepare the individual reports
based on the results of the verification process.

The city's Clerk No. 12 assists the court on the case that will
close with the liquidation of the Company's assets to repay
creditors.

CONTACT: Mr. Roberto Boffa, Trustee
         Uruguay 390
         Buenos Aires


TELEFONICA DE ARGENTINA: Issues ARS250 Mln Worth of New Notes
-------------------------------------------------------------
Telefonica de Argentina (NYSE: TAR) issued Friday two tranches
of new notes worth ARS250 million (US$85.6 million), completing
the third placement under a ARS1.5-billion program approved last
year.

According to a Business News Americas report, the first class
series is for ARS200 million with an annual interest rate of 8%
due February 11 2006. The second series for ARS50 million is due
one year later with a variable interest rate of 2.5%.

The company, which is a unit of Spain's Telefonica (TEF),
received offers worth ARS371 million, more than doubling the
ARS150 million initially considered for this issue. The company
finally accepted a total of 250mn pesos.

Main investors include pension funds administrators that
acquired 47% of the notes, followed by financing institutions
(19%), insurance companies (18%) and minor investors (13%).

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


TSBC SOCIEDAD ANONIMA: Liquidates Assets to Pay Debts
-----------------------------------------------------
TSBC Sociedad Anonima de Comunicacion will begin liquidating its
assets following the bankruptcy pronouncement issued by Court
No. 6 of Buenos Aires' civil and commercial tribunal.

Infobae reports that the ruling places the company under the
supervision of court-appointed trustee Luis Aristides Traverso.
The trustee will verify creditors' proofs of claims until March
28. Afterwards, the validated claims will be presented in court
as individual reports on May 9.

The trustee 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 June 22. The bankruptcy
process will end with the disposal company assets in favor of
its creditors.

CONTACT: Mr. Luis Aristides Traverso, Trustee
         Reconquista 642
         Buenos Aires



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

BANCO VOTORANTIM: S&P Assigns 'BB-' to $100M MTN
------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' foreign-
currency long-term credit rating to Banco Votorantim S.A.'s $100
million MTN, which will be converted into Brazilian reais upon
payment of interest and principal, to be issued in February 2005
and maturing in three years.

"Even though the transaction notional amount and the interest
rate are calculated based on the nominal amount converted in
Brazilian reais, this is an international issue and the payment
of interest and principal will be done offshore in hard
currency, and therefore the issue was assigned the same foreign
currency rating as that on the bank," said Standard & Poor's
credit analyst Tamara Berenholc.

The counterparty credit ratings on Banco Votorantim S.A. (LC:
BB/Stable/B; FC: BB-/Stable/B) incorporate the potential risks
associated with the bank's treasury business; its exposure to
sovereign risk through its securities portfolio, a common issue
for Brazilian banks; and the risks associated with the volatile
economic environment in Brazil. The ratings benefit from the
implicit support of the Votorantim Group (FC: BB-/Stable/--;
LC: BBB-/Stable/--); the group's strong brand-name recognition;
and the bank's good profitability, experienced management team,
and efficient decision-making processes.

Banco Votorantim's treasury is very active in providing hedge
instruments to its clients. For this reason, the bank carries
exposure to Brazil's sovereign risk through its securities
portfolio and open-market operations equivalent to approximately
4.3x its equity (based on consolidated figures) as of September
2004.

The Votorantim Group is one of the largest and most influential
industrial conglomerates in Brazil. Its brand-name recognition
has helped the bank to leverage on its business, and the images
of both organizations are closely linked. The conglomerate
supervises the bank's activities and operations, and its
conservatism permeates the bank's activities. Banco Votorantim's
management is made up of professionals with vast experience in
the financial markets and the Group's companies.

The stable outlook on Banco Votorantim's local-currency
counterparty credit rating incorporates the economic risks of
the Brazilian banking industry and the balance between its good
business profile, good management, high profitability, and the
potential risks related to the quality of its growing private
loan portfolio, especially its consumer loans segment and its
government securities.

The stable outlook on the foreign currency counterparty credit
rating on Banco Votorantim reflects the outlook on the sovereign
credit rating on the Federative Republic of Brazil. At current
levels, a change in the foreign currency sovereign credit rating
would lead to a similar action on the foreign currency rating on
Banco Votorantim.

Primary Credit Analysts: Daniel Araujo, Sao Paulo (55) 11-5501-
8939; daniel_araujo@standardandpoors.com;

Tamara Berenholc, Sao Paulo (55) 11-5501-8950;
tamara_berenholc@standardandpoors.com



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

COCA COLA EMBONOR: S&P Releases Report on Ratings
-------------------------------------------------

ISSUER CREDIT RATING
  Corporate Credit Rating:                         BB+/Stable/--

AFFIRMED RATING
  Senior unsecured debt
     Local currency                                NR
  Senior unsecured debt
     Foreign currency                              BB+

Major Rating Factors

Strengths:
- Leading competitive position in served territories in Chile
   and Bolivia
- Adequate operating performance
- Positive industry growth trends in the region
- Some degree of expected parent support

Weaknesses:
- Geographic concentration
- Intense competition from lower-priced brands and substitutes
- Improving yet somewhat weak financial measures
- Relatively high financial leverage

Rationale
The ratings on Coca Cola Embonor S.A. (Embonor) reflect
moderately high leverage for the rating, a low degree of
diversification, a significantly diminished critical size, and
the challenge of improving its financial performance in spite of
the highly competitive nature of the carbonated soft drink
market, price-sensitive consumption habits, and a moderate
inflexibility to increase final prices to consumers. These
factors are offset by the leading position of this Chilean Coca-
Cola bottler within its franchised territories in Chile and
Bolivia, Coca-Cola Co.'s (KO) 45.5% ownership level (and
inclusion of the Coca-Cola name in the bottler's name), and
corresponding ongoing (but to a lesser extent) credit
enhancement derived from some degree of implied support by KO.

Compared to all other Latin American Coca-Cola bottlers, Embonor
and the Mexican bottler, Coca-Cola Femsa S.A. de C.V., were the
two bottlers whose ratings benefited the most from expected
support from KO. Nevertheless, with the significant decline in
its volume relative to the overall Coca-Cola system after the
sale of the Peruvian operations and lessened strategic
importance to the Coca-Cola system, Embonor no longer fulfills
Standard & Poor's Ratings Services' criteria for maintaining
such high credit enhancement. Nevertheless, the ratings will
continue to factor in some lower degree of parent support
(comparable to that of Embotelladora Andina S.A.) based on the
continued operating importance of Embonor to the Coca-Cola
system, given its positioning within the Chilean and Bolivian
territories, the remaining high-equity participation of KO in
the company's equity, and the fact that it shows the Coca-Cola
label on its own corporate name.

During the first nine months of 2004, both Embonor's sales and
EBITDA generation declined by about 25% as a result of the sale
of the Peruvian operations in early 2004. However, excluding the
Peruvian operations, EBITDA increased by about 8.9%, compared to
the first nine months of 2003 as a result of volume increases in
the served areas of about 8% and the higher dollar realized
prices in Chile, due to the domestic currency appreciation (that
helped offset the exchange rate volatility in Bolivia). Overall,
profitability is expected to improve moderately over the medium
term based on positive long-term soft drink consumption growth
fundamentals in the region, particularly in Chile. Given
relatively stable current price levels, the EBITDA margin is
expected to move in the range of the 21%-23% level during the
next two years (versus 18.3% in the first nine months of 2004),
making the bottler more comparable to its industry peers in the
region. In addition, lower debt and interest levels, moderate
investment plans, and modestly improving cash generation
projected for the next two years are expected to translate into
more adequate coverage measures of EBITDA interest coverage of
3.5x or funds from operations-to-debt ratio of about 20% by
2006. Stronger cash flows derived from the more consolidated and
stable Chilean operations should provide enhanced strength to
overcome the potential for unfavorable macroeconomic conditions
in Embonor's Bolivian territories, should they develop.

Given that the Bolivian operation is very small in terms of
contribution to the consolidated entity, we do not factor
Bolivian sovereign risks into our rating on Embonor. This
approach would be reassessed if growth in more volatile
territories is much greater in the future (which seems unlikely
at this point) or cash flow from Chilean operations covers less
than 1x consolidated interest. Furthermore, excluding EBITDA
from Bolivia, we estimate EBITDA from Chile alone would provide
a manageable more-than-2x interest coverage under severe stress,
in the event that unfavorable volatility temporarily limited
cash generation in its Bolivian franchise.

Embonor is the second-largest Coca-Cola bottler in Chile, where
after selling its Peruvian bottling franchise, it generated
about 85% of its cash flow in the first nine months of 2004
(measured as a percentage over consolidated EBITDA), and the
largest Coca-Cola bottler in Bolivia, where it has a leading
market share of 57.8%.

Liquidity
We consider Embonor's liquidity position to be somewhat weak.
The company's cash reserves as of September 2004 were only $4
million, as the proceeds from the sale of the Peruvian
subsidiary were mostly used for the repayment of debt.

Nevertheless, because of its adequate position within the
Chilean market and its unique relationship with KO, Embonor
enjoys very good access to the domestic and global financial
markets. In this sense, in December 2004, Embonor obtained a
syndicated credit facility for up to $180 million (to be drawn
through March 2006) to pay, prepay, and/or refinance most of its
existing debt. This new line would result in significant
interest savings from 2006 (as the interest rate is based on
LIBOR plus a margin compared to the 9.875% rate for the existing
bonds) and would improve the debt maturity profile. In addition,
Embonor benefits from access to additional committed credit
lines totaling approximately $29 million with banks in Chile and
Bolivia (which tends to be relatively unusual within Latin
American countries).

Before the divestiture of the Peruvian operations, we were
concerned that negative free operating cash flows would require
the reliance on additional debt; however, pro forma for the sale
and debt repayment, free cash flow turned positive and is
expected to strengthen in the course of the following two years.
After the repayment of a substantial portion of the debt
denominated in local currency (with the proceeds of the sale of
the Peruvian operations), Embonor's exposure to foreign-
denominated debt increased to 95% of its total debt, increasing
currency mismatch risks, which is partially mitigated by hedges
applied by the company.

Outlook
The stable outlook on Embonor reflects our view that, while
challenged by intense competition (in a still volatile but
gradually improving macroeconomic environment in most of its
territories), Embonor is well positioned to progressively
strengthen its positioning within its franchised territories.
Rating stability still relies on continued implied operational
support by KO, and incorporates expectations for improved
financial performance through the strengthening of its internal
cash-flow generation during the next two fiscal years. Rating
stability also assumes that Embonor will be able to maintain
positive free operating cash and a conservative investment plan
during that period.

Business Description
Established in 1962, Embonor is the oldest Coca-Cola bottler in
Chile with a single continuous majority ownership structure,
which is held by the Vicu¤a family. The company's activities
consist of the production, commercialization, and distribution
of Coca-Cola products under a bottling license agreement, as
well as of other non-Coca-Cola brand products, such as mineral
and table water, noncarbonated fruit juices, and carbonated soft
drinks.

Primary Credit Analyst: Ivana Recalde, Buenos Aires (54) 114-
891-2127; ivana_recalde@standardandpoors.com

Secondary Credit Analyst: Marta Castelli, Buenos Aires (54) 114-
891-2128; marta_castelli@standardandpoors.com


CRT: Parent Teeters on Edge of Bankruptcy
-----------------------------------------
Ailing network-equipment vendor SR Telecom Inc. must secure
early this week a waiver for breaching the covenants governing
the debt of its Chilean subsidiary. Otherwise, it will have to
seek bankruptcy protection, says a Dow Jones report. The
subsidiary, Communicacion y Telefonia Rural SA (CTR), owed
Export Development Canada and Inter-American Development Bank a
total principal amount of US$31-million as of Sept. 30.

SR Telecom's financial statements for the third quarter stated
that EDC and Inter-American have full recourse against SR
Telecom for the full amount of the loans if the covenants
governing the debt aren't met. The financial report added that
SR Telecom and CTR were in breach of some of the covenants, but
the lenders had provided a waiver for a one-year period that
ended Monday.

Without the waiver, all amounts owed by CTR could be declared
due and immediately payable. In addition, an acceleration of the
loan would trigger a default under SR Telecom's public
debentures.

SR Telecom is hopeful the lenders would continue to waive the
covenants on an annual basis until the balance of the CTR loan
outstanding is either repaid or refinanced.



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

* REPUBLIC OF COLOMBIA: S&P Affirms Ratings; Outlook Stable
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' long-term
foreign currency sovereign credit rating on the Republic of
Colombia. At the same time, Standard & Poor's affirmed its 'B'
short-term foreign, 'BBB' long-term local, and 'A-3' short-term
term local currency sovereign credit ratings on Colombia. The
outlook remains stable.

"Improved economic prospects, coupled with stronger external
indicators, underpin Colombia's ratings," said Standard & Poor's
Ratings Services credit analyst Richard Francis. "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
its general government debt. Therefore, further reform in the
areas of taxes, transfers, and pensions will likely be needed
over the next three years in order to maintain fiscal
discipline," he added.

Mr. Francis explained that Colombia's general government deficit
improved modestly in 2004, to 3.5% of GDP from 3.8% in 2003,
mainly as a result of higher-than-expected tax collections,
lower-than-expected interest costs (as a result of the
appreciation of the Colombian peso), and higher-than-expected
local government surpluses. Despite the improvement, the deficit
is expected to increase to 3.9% in 2005 as some of these
positive trends reverse themselves. As noted, Colombia's fiscal
position remains highly inflexible due to a large percentage of
fixed expenditure. Furthermore, the outlook for tax reform has
diminished as the country enters an electoral cycle with both
presidential and legislative elections in 2006.

However, improved economic prospects and external indicators
will underpin Colombia's rating despite the expected modest
fiscal deterioration.

Colombia's economy grew by an estimated 3.9% in 2004, and is
expected to grow by the same amount in 2005. The country's gross
financing gap (current account deficit plus amortization of
long-term external debt plus stock of short-term external debt)
fell to below 80% of reserves in 2004 from around 100% in 2003,
and is expected to remain below 80% in 2005. Net external debt
(both private and public) to current account receipts (CAR) has
improved due to an increase in international reserves and to a
substantial increase in exports and remittances, which has
boosted CAR.

"If fiscal prospects improve and the debt and interest burdens
decline, the ratings could improve," noted Mr. Francis. "On the
other hand, significant fiscal slippage or a sharp deterioration
in national security could result in renewed downward pressure
on the government's creditworthiness," he concluded.

Primary Credit Analyst: Richard Francis, New York (1) 212-438-
7348; richard_francis@standardandpoors.com



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

KAISER ALUMINUM: Court Approves $200M DIP Credit Facility
---------------------------------------------------------
Kaiser Aluminum announced that the U.S. Bankruptcy Court for the
District of Delaware has approved the company's previously
announced new financing arrangement.

The new financing arrangement is an agreement with JPMorgan
Chase Bank, National Association, J.P. Morgan Securities Inc.,
and The CIT Group/Business Credit, Inc., under which Kaiser will
be provided with a new $200 million Debtor-in-Possession (DIP)
credit facility intended to remain in place until the company's
emergence from Chapter 11. The new financing arrangement also
provides a commitment to Kaiser for a multi-year exit financing
in the form of a $200 million revolving credit facility and a
fully drawn term loan of up to $50 million upon the company's
emergence from Chapter 11.

The company closed on the new DIP credit facility Friday.

Kaiser President and Chief Executive Officer Jack A. Hockema
said, "Approval of the new financing arrangement demonstrates
Kaiser's continuing financial stability, and it is another
important step as we prepare to file our formal Plan of
Reorganization and Disclosure Statement within the next few
months."

Kaiser Aluminum (OTCBB: KLUCQ) is a leading producer of
fabricated aluminum products and owns interests in alumina and
primary aluminum.

CONTACT: Kaiser Aluminum Corp.
         5847 San Felipe
         Suite 2500
         P.O. Box 572887
         Houston, TX 77257-2887
         USA
         Phone: 713-267-3777
         Web site: http://www.kaiseral.com



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

BALLY TOTAL: S&P Downgrades Ratings, Lowers Outlook
---------------------------------------------------
Standard & Poor's Rating Services lowered its ratings on Bally
Total Fitness Holding Corp., including lowering the corporate
credit rating to 'CCC+' from 'B-'. At the same time, Standard &
Poor's changed its outlook on the ratings to negative from
developing. Total debt outstanding at Sept. 30, 2004, was $747.7
million.

"The rating actions are based on the potential for further
delays in the filing of financial statements and on related
uncertainties, in light of Bally's Audit Committee's recent
findings," said Standard & Poor's credit analyst Andy Liu.

The findings included material weaknesses in the company's
internal control over financial reporting, and certain
accounting errors. Bally's accounting issues create transparency
concerns with respect to the company's operating performance and
could further complicate an ongoing SEC investigation. Moreover,
Standard & Poor's believes that the company may be facing a
narrower cushion of compliance with bank covenants.

The Audit Committee investigation discovered several accounting
errors, and that two former and two current finance executives
had engaged in improper conduct. As a result, Bally has
terminated its controller and its treasurer and ceased severance
payments to the former CEO and the former CFO. The investigation
also concluded that the former CEO and CFO were responsible for
multiple accounting errors and for creating a culture of
aggressive accounting. Bally has reported the investigation
results and its actions to the SEC.

The current management team seems committed to correct past
financial issues. Recently, Bally retained The Blackstone Group
to assist in its turnaround efforts. Blackstone will work with
Bally on evaluating and refining its business plan, and on
developing a long-term financial strategy to improve the
company's capital structure and maximize cash flow. Possible
actions include the divestiture of noncore assets.

The company must still complete its re-audit and file its
financial statements by July 2005 to cure indenture violations
and avoid possible default. The outlook may be revised if Bally
resolves all outstanding accounting issues and allegations,
resumes making timely financial filings, and still retains a
sufficient covenant cushion to accommodate higher professional
fees and a moderate drop in operating performance.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers, with approximately four
million members and nearly 440 facilities located in 29 states,
Mexico, Canada, Korea, China and the Caribbean under the Bally
Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM),
Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of
Canada(R) brands.

Primary Credit Analyst: Andy Liu, New York (1) 212-438-1717;
andy_liu@standardandpoors.com


CINTRA: ASPA Reiterates Approval for New Sale Scheme
----------------------------------------------------
Reaffirming its support to the planned sale of airline operator
Cintra, the Pilots Union (ASPA) said it is quite willing to take
part in the process, relates Notimex. ASPA spokesman Jorge
Sutherland said that the new sales scheme was a frank and open
decision on the part of the board of Cintra.

"We are confident that the directives will make the sector more
viable and give it more security. We are pleased that the
Transportation and Communications Secretariat is finally
becoming involved in this process as it should be a fundamental
axis in the development of these proposals," stated Mr.
Sutherland.

"We pilots declare ourselves ready to participate in the
decision-making process," added Mr. Sutherland.

The board of Cintra recently approved the reorganization and
sale of the company's assets in three packages, scratching
previous plans to merge the country's two biggest carriers.

Under the new scheme, Cintra it will sell leading domestic
carrier Aeromexico together with regional unit Aerolitoral.

The country's top international carrier, Mexicana, will be sold
together with a new low-cost carrier that will offer flights at
a 30% discount to normal fares. Mexicana unit AeroCaribe's
assets will be included in that sale.

Ground services unit Servicios de Apoyo en Tierra will be sold
independently.

Cintra said it will soon decide how to sell off other assets and
what stake, if any, it will retain in them.

The new privatization plan is a departure from Cintra's previous
intention to merge Aeromexico and Mexicana into one carrier for
sale and to combine AeroCaribe and Aerolitoral into another to
compete with the larger entity.


GRUPO MEXICO: Bear Stearns Cuts Equity Recommendation
-----------------------------------------------------
Investment house Bear Stearns downgraded its recommendation on
the shares of Mexican mining company Grupo Mexico SA
(GMEXICO.MX) to "peer perform" from "outperform," says Dow Jones
Newswires. Bear Stearns noted in a research report Friday that
Grupo Mexico's turnaround in 2004 "has been huge," with the
company tripling its earnings before interest, taxes,
depreciation and amortization, or EBITDA, and lowering debt by
US$700 million.

"The huge improvement in the company has not been missed by the
market, with the shares up nearly 100% in 2004 and 400% in two
years," the investment bank said.

Bear Stearns said it expects the company's performance to remain
positive this year, particularly with the planned merger of its
Mexican mining operations with Southern Peru Copper Corp. (PCU),
of which its owns 54%.

However, the bank said the planned merger already appears to be
included in the share price, and that the catalyst from rising
copper prices may be running out.

Grupo Mexico is the world's third largest copper company with
operations in Mexico, Peru and the U.S.

CONTACT:  GRUPO MEXICO S.A. DE C.V.
          Avenida Baja California 200,
          Colonia Roma Sur
          06760 Mexico, D.F., Mexico
          Phone: +52-55-5264-7775
          Fax: +52-55-5264-7769
          Home Page: http://www.gmexico.com


TFM: Fitch Affirms Ratings At 'B+'
----------------------------------
Fitch Ratings has affirmed the 'B+' foreign and local currency
senior unsecured ratings of TFM, S.A. de C.V. (TFM). The Rating
Outlook is Stable. The foreign currency rating applies to the
following debt:

--US$150 million senior notes due 2007;

--US$443.5 million senior notes due 2009;

--US$180 million senior notes due 2012.

TFM's 'B+' ratings reflect the company's challenging operating
environment, high leverage, flat earnings, and tight liquidity.

Over the last two years, TFM has operated in a challenging
environment characterized by higher fuel costs, a depreciating
Mexican peso versus the U.S. dollar and a general shift in
manufacturing to China from several countries, including Mexico.
This latter factor has resulted in a decline in the shipment of
cargo from some sectors served by the company, including
automotive. Through the first nine months of 2004, TFM's
revenues were flat vis-a-vis those of 2003.

TFM remains highly levered. As of Sept. 30, 2004, TFM had about
US$1.4 billion in total debt, consisting of US$773 million in
unsecured bonds, a US$133 million term loan and an estimated
US$495 million of off-balance debt associated with lease
obligations. TFM's EBITDAR, which is defined as EBITDA plus the
company's annual locomotive and railcar lease payments, is
expected to be about US$280 million in 2004 or essentially the
same level as in 2003. The ratio of total debt-to-EBITDAR has
remained at about 5.0 times (x) throughout the last several
years. EBITDAR covered fixed expenses, defined as interest
expense plus lease payments, by about 1.6x as of Sept. 30, 2004,
and in 2003.

TFM's liquidity is poor with only US$11.8 million of cash as
Sept. 30, 2004. Fitch believes, that neither the expected
transaction to sell Grupo TMM's indirect stake in TFM to Kansas
City Southern (KCS) nor the resolution of TFM's value added tax
(VAT) claim is likely to provide any cash for debt reduction at
TFM. Despite the continued favorable court rulings for TFM's
claim to an estimated US$1 billion value added tax refund from
the Mexican government, a considerable amount of doubt exists as
to whether any portion of TFM's VAT refund will be in the form
of cash.

The Mexican government holds a PUT option for its 20% equity
interest in TFM. Grupo TFM's shareholders, Grupo TMM and KCS,
are obligated to acquire the shares that the government holds in
TFM if they are not purchased by the public. In one scenario,
the government could put its 20% of TFM's shares to Grupo TFM,
and Grupo TFM could acquire the Mexican government's 20% stake
in TFM. Because the government has lost most of the steps in
TFM's VAT negotiation process, it could effectively offset the
VAT refund it owes to TFM with the proceeds of the sale of TFM
in a cashless transaction as proposed by Grupo TFM's
shareholders.

Fitch views the proposed transaction in which Grupo TMM would
sell its 51% voting interest in Grupo TFM to Kansas City
Southern (KCS) as being mildly positive for TFM. The transaction
would replace TFM's financially distressed controlling
shareholder, Grupo TMM, with KCS, a U.S. entity that has a
stronger financial profile but one that is also highly
leveraged. In addition, TFM may be able to refinance and borrow
at a lower cost in the future under the control of KCS which is
a somewhat stronger financially vis-a-vis Grupo TMM.
Nevertheless, on a pro forma basis, KCS would continue to be a
small railway and about two-thirds of its operating earnings
would be generated by the Mexican operations.

Fitch's 'B+' ratings incorporate an expectation that the
transaction with KCS will be completed as both parties, Grupo
TMM and KCS, negotiated an amended acquisition agreement
announced in December 2004. The new agreement is similar to the
original one, but also includes US$157 million of contingency
payments tied to the resolution of the VAT and PUT matters. The
amended terms for the sale of Grupo TFM to KCS also include a
US$200 million cash payment, much of which is required to be
used to reduce debt at the Grupo TMM holding company level; cash
available for debt reduction at the TFM operating company level
is unlikely to result from the transaction with KCS. If the
acquisition does not occur by Oct. 5, 2005, the expiration date
of the approval of the transaction by Mexico's Foreign
Investment Commission (FIC), nor does the Mexican Federal
Competition Commission (FCC) extend its approval of the
transaction before April 2005, TFM's ratings would likely be
lowered.

TFM holds the concession to operate Mexico's northeastern rail
lines and is Mexico's largest railroad by volume. The company
transports more than 40% of Mexican rail volume and owns more
than 2,600 miles of rail track. TFM is the only Mexican carrier
to Laredo, Texas, the largest freight exchange point between the
United States and Mexico. TFM also serves three of Mexico's four
primary seaports and approximately 80% of the company's revenue
is related to international freight. In 2003, TFM's revenues
were generated from the following main industries: agro-
industrial (22%), automotive (19%), chemical (18%) manufacturing
and mining (31%) and intermodal (8%). TFM is an operating
company 80% owned by Grupo TFM and 20% owned by the Mexican
government. Grupo TFM, a holding company, is currently 51% owned
by Grupo TMM and 49% owned by Kansas City Southern (KCS).

CONTACT: Anita Saha, CFA, +1-312-368-3179, Chicago
         Joe Bormann CFA, +1-312-368-3349, Chicago
         Alberto Moreno, +52 81 8335-7179, Mexico

MEDIA RELATIONS: Brian Bertsch +1-212-908-0549, New York



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

* PARAGUAY: Posts Highest GDP Growth in 10 Years - IMF
------------------------------------------------------
The following statement was issued Friday in Asuncion by an
International Monetary Fund (IMF) staff mission:

"A mission from the International Monetary Fund (IMF) visited
Asuncion during February 1-11, 2004 to conduct discussions for
the fourth review under the Stand-By Arrangement (SBA). The
mission was headed by Mr. Alejandro Santos and met with Finance
Minister Borda, Central Bank President Gonzalez, senior
officials, as well as business and legislative representatives.
Considerable progress was made towards completing the review and
discussions are expected to continue in the following weeks.

"The mission will conduct the final assessment of this review in
Washington in coming weeks. Some technical issues on the budget
and aspects of the public banking reform agenda are to be
resolved.

"The main findings of the mission were: Macroeconomic
performance was significantly better than anticipated in 2004.
Real GDP grew by almost 3 percent in 2004, the highest in almost
a decade. Inflation fell below 3 percent in 2004, one of the
lowest in the region, and the lowest in Paraguay in more than
two decades. The fiscal accounts were in surplus for the first
time in a decade and international reserves are at record highs.

"The program is broadly on track. The majority of the program
targets for end-December 2004 were observed. An important target
ahead is the approval of the second-tier public banking law by
at least one chamber of Congress.

"Progress was made on all elements of the structural reform
agenda. In particular, several important banking bills were
submitted to Congress, a commission was created to design a
restructuring plan for the first-tier public banks, additional
external audits for public enterprises were completed, the civil
service reform was advanced, and preparations continue to
finalize the domestic bond exchange.

"The main challenges for 2005 will be to consolidate the
macroeconomic gains of the recent past and to continue
implementation of the structural reform agenda. An important
objective for 2005 will be to maintain fiscal discipline while
paying due regard to social spending. On the structural side,
while there are many challenges ahead, efforts should be
concentrated on implementing the public banking reform agenda.
The agreements reached with civil society in designing a
development plan with equity are important steps towards the
consolidation of a medium-term policy framework.

"The mission would like to take this opportunity to thank the
authorities and the citizens of Paraguay for their hospitality.
We would like to encourage the general public to read the IMF
documents related to Paraguay's economic program, which can be
found at our website:
http://www.imf.org/external/country/pry/index.htm."

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

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

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



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

YACYRETA: Argentina, Paraguay Ministers to Meet With Residents
--------------------------------------------------------------
In an effort to stop protests that have slowed down upgrades to
the Yacyreta hydroelectric project on the border of Argentina
and Paraguay, planning ministers from both countries have agreed
to meet with the protestors.

According to Dow Jones Newswires, the ministers will meet in
Buenos Aires on Feb. 25 with the leaders from rural areas that
will be affected by upgrades. These leaders include governors of
Itapua, Paraguay, and Misiones, Argentina, as well the mayors
from the towns of Encarnacion, Cambyreta, Posadas and Garupa.

Rural leaders are seeking dislocation compensation and public
works projects for their constituents who live in poverty near
the dam. Representatives from the World Bank and the Inter-
American Development Bank are also slated to attend the meeting.



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

PDVSA: Meets With Russia, US Heads to Ratify Investment Interest
----------------------------------------------------------------
The CEOs of multinational oil companies - Lukoil, from Russia
and ConocoPhillips, from the United States - met with the
President of the Bolivarian Republic of Venezuela, Hugo Chavez
Frias and the Minister of Energy and Petroleum and CEO of PDVSA,
Rafael Ramirez Carreno, to ratify their interest in investing
over than $10 billion in oil and gas development projects in
Venezuelan for the next five years. This same week the Vice
President of the Bolivarian Republic of Venezuela, Jose Vicente
Rangel, met with the Chairman and CEO of the French Company
Total.

In this sense, the Corocoro Development Plan - Corocoro is an
oil field operated by ConocoPhillips in the Eastern region of
the country- was approved at Miraflores Palace. The production
goal of such field for year 2007 is 75,000 crude barrels a day.
"Undoubtedly, this project is going to be successful. The 2009
production goal is expected to reach 120,000 barrels a day. This
field will be operated in synergy with the Plataforma Deltana
Project and the Gran Mariscal de Ayacucho Complex, and
consistently with the guidelines providing for the participation
of domestic capital and social development plans devised for the
region under adjustment of royalty at 16 2/3 percent", said
Minister Ramirez Carreno.

"We are going to continue with this Project. We are very pleased
for the progress recorded by our investments in Venezuela, such
as Hamaca and Petrozuata, and feel very enthusiastic about our
perspectives with regard to Corocoro field and Plataforma
Deltana Project. We likewise ratify our interest in future
investment opportunities in Venezuela", said James Mulva,
Chairman and CEO of ConocoPhillips, knowing that the expansions
and additional volumes produced within the Orinoco Belt are
governed by the new Hydrocarbons Organic Law.

In addition to the Corocoro field development and Block 2 of
Plataforma Deltana, ConocoPhillips also takes part in Petrozuata
and Ameriven strategic associations for the development of the
Orinoco Heavy-Oil Belt.

Likewise, Vaguit Alekperov, Lukoil's President and CEO, said
that the company he represents is willing to make great
investments in projects dealing with exploration and production,
refining and rehabilitation of wells and the development of the
Orinoco Oil Belt. All these investments are assessed within the
framework of Memorandum of Understanding signed between Lukoil
and PDVSA at the Kremlin, as part of President Chavez's visit to
the Russian Federation in November 2004.

At last, Thierry Desmarest, President and CEO of Total, made
known his interest in investing $5 billion in a new development
project set for the Orinoco Oil Belt (a matter of discussion
with the Venezuelan Minister of Energy and Petroleum) Total
participates in the Sincor Strategic Association, the
exploitation of the Jusepin oil field and the development of the
non-associated gas field Yucal-Placer.

CONTACT: Petroleos de Venezuela S.A.
         Centro Corporativo
         Torre Este, La Campina
         Caracas, Venezuela
         Fax: +58 - 212 - 7084460

         Web site: http://www.pdvsa.pdv.com/en/index.html


PDVSA: US Expansion Plans Delayed Pending Negotiations
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CITGO's expansion plans, as well as the acquisition of a
refinery on behalf of CITGO Asphalt, have been put on hold until
certain issues have been fully resolved, Minister of Energy &
Petroleum, Rafael Ramirez, told Venezuelan daily El Universal in
an interview.

Ramirez, who is also the president of Petroleos de Venezuela SA
(PDVSA), the parent of U.S.-based CITGO, revealed issues include
PDVSA discounts on crude sold to CITGO, tax payments on US soil,
dividend repatriation, Venezuelan personnel, etc.

Venezuelan energy officials, who are currently scrutinizing
PDVSA's International operations, are having conversations with
US government officials in order to activate double taxation
mechanisms, so CITGO will also declare income tax in Venezuela.

Regarding repatriation of dividends, Ramirez said that during
2003, that profit was used to pay off PDVSA's debt, which, at
the time, was decreased to US$3,000 million, while in 2004,
US$400 million in dividends were repatriated.

It was agreed that a local firm would be incorporated into
CITGO's audit processes, as well as the transfer of Venezuelan
personnel to the United States.

Future actions will include investment in the refineries abroad,
so that they can process more Venezuelan crude.



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