TCRLA_Public/050216.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, February 16, 2005, Vol. 6, Issue 33



ADVANCED S.A.: Enters Bankruptcy on Court Orders
AGRICOLA INDUSTRIAL: Court Converts Bankruptcy to Reorganization
AGROIMPULSO CEREALES: Liquidates Assets to Pay Debts
CALERA MARTINEZ: Court Rules for Liquidation
CEREALTAIM S.A.: Enters Bankruptcy on Court Orders

COMPANIA PROVINCIAL: Gets Court OK for Reorganization
INVERCARGO S.A.: Begins Liquidation on Court Orders
JOYITA S.A.: Court Authorizes Plan, Concludes Reorganization
PIPERNO RISTORANTE: Liquidates Assets to Pay Debts
RIO DEL VALLE: Initiates Bankruptcy Proceedings

YPF: S&P Releases Report on Ratings


GLOBAL CROSSING: Boosts Telmex's IP-based Network
LORAL SPACE: Launches X-Band Satellite


BRASKEM: Explores Partnership With PDVSA Subsidiary
CERJ: To Issue BRL400 Mln Worth of Debentures in Two Series
KLABIN: Ends 2004 With $1.1B in Gross Revenues
LIGHT SERVICOS: Various Groups Slam Additional Rates Hike
SADIA: Pays Interest on Equity

UNIBANCO: Bear Stearns Raises Recommendation to Peer Perform


AES GENER: Seeks Approval to Build 740MW Plant
CTR: SR Telecom Obtains Waiver in Respect to Debt
EDELNOR: Swings to a Loss in 2004
ELECTROANDINA: Ends 2004 With $11.6M Net Losses

E L   S A L V A D O R

* EL SALVADOR: IMF Board Wraps Up Article IV Consultation


BALLY TOTAL: Keeps America Going Strong With "Resolution Rescue"
PILGRIM PRIDE: Moody's Upgrades Senior Implied To Ba2 From Ba3
UNEFON: Inks Agreement With QUALCOMM to Offer BREW(R) Services


ANCAP: S&P Issues Report on Ratings


PDVSA: Seeks to Complete 2003 Financial Report By End-March
PDVSA: Strengthens Oil Ties With Brazil
PDVSA: Assures Steady Supply of Fuel in Andean States

     -  -  -  -  -  -  -  -


ADVANCED S.A.: Enters Bankruptcy on Court Orders
Advanced S.A. will enter bankruptcy protection after Court No.
16 of Buenos Aires' civil and commercial tribunal, with the
assistance of Clerk No. 16, ordered the Company's liquidation.
The order effectively transfers control of the Company's assets
to the court-appointed trustee who will supervise the
liquidation proceedings.

Infobae reports that the court selected Mr. Bartolome Horacio
Bavio as trustee. Mr. Bavio will be verifying creditors' proofs
of claims until the end of the verification phase on March 18.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the Company's accounting
and business records. The individual reports will be submitted
on May 3 followed by the general report, which is due on June

CONTACT: Advanced S.A.
         Maipu 327
         Buenos Aires

         Mr. Bartolome Horacio Bavio, Trustee
         Avda de Mayo 1324
         Buenos Aires

AGRICOLA INDUSTRIAL: Court Converts Bankruptcy to Reorganization
Agricola Industrial del Plata S.R.L., which was undergoing
liquidation, will start reorganization on orders from Court No.
6 of San Isidro's civil and commercial tribunal, according to
Infobae. The credit verification process will be done "por via
incidental", adds the report.

CONTACT: Agricola Industrial del Plata S.R.L.
         Rivadavia 154
         San Isidro

AGROIMPULSO CEREALES: Liquidates Assets to Pay Debts
Agroimpulso Cereales S.A. of Buenos Aires will begin liquidating
its assets following the bankruptcy pronouncement issued by
Court No. 9 of the city's civil and commercial tribunal, reports

The ruling places the Company under the supervision of court-
appointed trustee Silvia Monica Tauschek. Ms. Tauschek will
verify creditors' proofs of claims until May 26. The validated
claims will be presented in court as individual reports on
August 3.

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 October 5.

The bankruptcy process will end with the disposal of the
Company's assets to repay its debts.

CONTACT: Ms. Silvia Monica Tauschek, Trustee
         Viamonte 658
         Buenos Aires

CALERA MARTINEZ: Court Rules for Liquidation
Court No. 23 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Calera Martinez S.R.L. after the
Company defaulted on its obligations, Infobae reveals. The
liquidation pronouncement will effectively place the Company's
affairs as well as its assets under the control of Mr. Pedro
Alfredo Valle, the court-appointed trustee.

Mr. Valle will verify creditors' proofs of claims until March
15. The verified claims will serve as basis for the individual
reports to be submitted in court on April 28. The submission of
the general report follows on June 13.

The city's Clerk No. 46 assists the court on this case that will
end with the disposal of the Company's assets in favor of its

CONTACT: Calera Martinez S.R.L.
         Tucuman 1682
         Buenos Aires

         Mr. Pedro Alfredo Valle, Trustee
         Avda de Mayo 1260
         Buenos Aires

CEREALTAIM S.A.: Enters Bankruptcy on Court Orders
Court No. 10 of Buenos Aires' civil and commercial tribunal
declared Cerealtaim S.A. bankrupt after the Company defaulted on
its debt payments. The order effectively places the Company's
affairs as well as its assets under the control of court-
appointed trustee Ricardo Norberto Belli.

As trustee, Mr. Belli is tasked with verifying the authenticity
of claims presented by the Company's creditors. The verification
phase is ongoing until April 1.

Following claims verification, the trustee will submit the
individual reports based on the forwarded claims for final
approval by the court on May 17. A general report will also be
submitted on June 28.

Infobae reports that Clerk No. 19 assists the court on this
case, which will end with the disposal of the Company's assets
in favor of its creditors.

CONTACT: Mr. Ricardo Norberto Belli, Trustee
         Avda Santa Fe 960
         Buenos Aires

COMPANIA PROVINCIAL: Gets Court OK for Reorganization
Compania Provincial de Propiedades S.A. begins its
reorganization following the approval of its petition by Court
No. 15 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. Hector Jorge Garcia will oversee the reorganization
proceedings as the court-appointed trustee. He will verify
creditors' claims until April 1. The validated claims will be
presented in court as individual reports on May 13.

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 27.

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 December 6.

CONTACT: Mr. Hector Jorge Garcia, Trustee
         Paraguay 1591
         Buenos Aires

INVERCARGO S.A.: Begins Liquidation on Court Orders
Invercargo S.A., a Company operating in Buenos Aires, will begin
liquidating its assets after Court No. 10 of the city's civil
and commercial tribunal declared the Company bankrupt. Infobae
reveals that the bankruptcy process will commence under the
supervision of court-appointed trustee Carlos Guillermo Montana.

The trustee will review claims forwarded by the Company's
creditors until March 31. After claims verification, He will
submit the individual reports for court approval on May 13. The
general report will follow on June 28.

Clerk No. 20 assists the court on this case.

CONTACT: Carlos Guillermo Montana
         Ayacucho 457
         Buenos Aires

JOYITA S.A.: Court Authorizes Plan, Concludes Reorganization
Buenos Aires-based Company Joyita S.A. concluded its
reorganization process, according to data released by Infobae on
its Web site. The conclusion came after the city's civil and
commercial Court No. 12, with assistance from Clerk No. 23,
homologated the debt plan signed between the Company and its

CONTACT: Joyita S.A.
         Yerua 2892
         San Justo
         Buenos Aires

PIPERNO RISTORANTE: Liquidates Assets to Pay Debts
Piperno Ristorante S.A. will begin liquidating its assets
following the bankruptcy pronouncement issued by Court No. 10 of
Buenos Aires' civil and commercial tribunal.

The ruling places the Company under the supervision of court-
appointed trustee Juan Carlos Pitrelli. Mr. Pitrelli will verify
creditors' proofs of claims until March 8. The validated claims
will be presented in court as individual reports on April 22.

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 6.

The bankruptcy process will end with the disposal Company assets
in favor of its creditors.

CONTACT: Mr. Juan Carlos Pitrelli, Trustee
         Avda de Mayo 1260
         Buenos Aires

RIO DEL VALLE: Initiates Bankruptcy Proceedings
Court No. 7 of Buenos Aires' civil and commercial tribunal
declared Rio del Valle S.A. "Quiebra," reports Infobae.

Local accounting firm "Estudio Carelli, Martino", who has been
appointed as trustee, will verify creditors' claims until March
16 and then prepare the individual reports based on the results
of the verification process.

The individual reports will be submitted in court on May 16,
followed by the general report on June 29.

The city's Clerk No. 14 assists the court on the case that will
close with the liquidation of the Company's assets to repay

CONTACT: "Estudio Carelli, Martino"
          Lavalle 1118
          Buenos Aires

YPF: S&P Releases Report on Ratings
  YPF S.A.
    Corporate Credit Rating
      Local currency                            BB+/Positive/--
    Corporate Credit Rating
      Foreign currency                          BB/Stable/--

  Repsol-YPF S.A.
    Corporate Credit Rating                     BBB+/Stable/A-2

  YPF S.A.
    Senior unsecured debt
      Local currency                            BB+
    Senior unsecured debt
      Foreign currency                          BB

  Repsol-YPF S.A.
        Senior unsecured debt                   BBB+
           Foreign currency                     A-2
  Pfd stk                                       BBB-
  Preference Stock                              BBB-
        Short-Term Debt
          Local currency                        A-2

Major Rating Factors


    * Repsol incentives for financial support;
    * Major, low-cost, low-risk, upstream operations;
    * Positive impact of the devaluation on YPF S.A.'s cost
structure; and
    * Strong coverage measures and moderate financial policy.


    * Uncertain economic environment in Argentina;
    * Capital-intensive business requires continuous
reinvestment to sustain production levels; under low oil price
scenarios, YPF would be likely to run cash-flow deficits to
sustain production capacity, although its ability to weather
such prices is much stronger than the vast majority of companies
in the oil industry;
    * Concentration in Argentina;
    * Devaluation negatively affected pesified natural gas
prices and fuel retail prices (however, less than 20% of E&P
revenues are related to natural gas); and
    * Aggressive dividend policy.


The ratings on YPF S.A. (YPF) reflect its strategic importance
to its parent, Repsol (BBB+/Stable/A-2); Repsol's economic
incentive to strongly support its Argentine operation; a
conservative financial profile (despite significant dividend
payments in the past three years); and YPF's strong business
position. The ratings also reflect the challenges of operating
in the highly uncertain and rapidly changing Argentine economic
environment, vulnerability to highly volatile international
prices, and a geographically concentrated reserve base.

The strong performance of YPF's operations coupled with the
existence of cross-default clauses in many of Repsol's bonds are
significant incentives for Repsol's support. This is because, as
YPF has been reducing its leverage to a more conservative level
and exhibiting a very smooth maturity profile, any eventual
required assistance should not be significant compared with the
value of the Company. The cross-default clauses specify that
Repsol would default on its bonds if any principal subsidiary,
including YPF, defaulted on more than $20 million of debt
obligations. Standard & Poor's Ratings Services considers the
economic incentives for Repsol to support its Argentine
subsidiary to be very strong, except in the case of total

Standard & Poor's considers the regulatory and institutional
environment in Argentina to be a major risk for YPF's business
position. Nevertheless, Standard & Poor's considers that the
strong financial profile, the economic incentives from its
parent, a very competitive cost structure, sound management, and
a very important reserve base that the Company has been bringing
into production despite the challenging conditions of the past
few years, compensate those weaknesses at the current rating

The hydrocarbon sector in Argentina is conditioned by political
decisions that might affect the sustainability of the industry's
profitability in the medium to long term. In 2004, the Kirchner
Administration has:

    * Modified many regulations jeopardizing the credit quality
of the companies;
    * Curtailed natural gas exports to Chile (for political
rather than technical reasons);
    * Proposed the creation of a new state-owned energy Company
("Enarsa") that will operate in the hydrocarbon industry and
increases uncertainties about the Government's willingness to
interfere in the sector;
    * Pressured producers to invest in infrastructure projects
(mostly pipelines); and
    * Pressured producers and refiners to not increase the price
of retail refined products.

With consolidated sales of Argentina peso (ArP) 20 billion
(approximately $6.9 billion) for the past 12 months ended Sept.
30, 2004, YPF is Argentina's largest Company and Latin America's
fourth-largest integrated energy Company. As of December 2003,
YPF had 2,690 million barrels of oil equivalent (boe) proven
consolidated reserves, almost all of which are concentrated in
Argentina (47.2% oil, 76% developed reserves).

YPF's revenue base, profitability, and cash-flow generation
ability are volatile, influenced by the strong weight of the
exploration and production division, which has contributed
between 74% and 99% of operating income in the past four years.
Despite government intervention that prevented YPF from fully
benefiting from international crude oil prices, funds from
operations (FFO) covered more than 300% of total debt in the
past 12 months ended Sept. 30, 2004, while EBITDA interest
coverage reached a very strong 45x for the same period.
Likewise, future performance will be conditioned by the effect
of international events on prices and by the evolution of
devaluation and inflation and new economic measures in
Argentina. Despite the volatile environment in Argentina, YPF's
financial performance, profitability measures, and cash-flow
generation ability should remain strong due to its good
operating performance and conservative financial profile in
spite of an aggressive dividend policy in the past four years.

YPF has a moderate capital structure, with total debt
representing a conservative 8.8% of capitalization as of
September 2004.


Standard & Poor's considers YPF's liquidity position to be
strong due to its important cash holdings, the interCompany
credits with the parent Company, and healthy cash-flow
generation. As of September 2004, YPF's cash reserves amounted
to $238 million, with total debt at $740 million, including $118
million in the short term. InterCompany credits granted to the
Repsol YPF group (approximately $1.3 billion as of September
2004) constitute an additional liquidity source. However, this
position was reduced in October 2004, after a $590 million
dividend payment.

Given that no acquisition is expected and considering the
Company's strong cash-flow generation ability, Standard & Poor's
expects YPF's capital expenditure needs to be covered by
internally generated funds, and free operating cash flows to
remain positive in the medium term. YPF showed an aggressive
dividend policy in the past three years, and dividend payout for
2004 exceeds fiscal 2003 net income. However, it is still
commensurate with the Company's cash-generation ability.
Standard & Poor's expects YPF's dividend policy to reflect the
Repsol Group's cash management policy, but not to increase the
Company's cash needs or jeopardize its ability to fund capital
expenditure requirements.

Standard & Poor's expects YPF's liquidity situation to remain
strong. However, should foreign-exchange transfer controls be
reinstated (as in the December 2001-May 2003 period), debt
payment capacity could be pressured.


The stable outlook reflects Standard & Poor's expectations that
Repsol has sufficient economic incentives to support YPF,
thereby mitigating direct sovereign risk (particularly an
increase in current transfer and convertibility restrictions).
Standard & Poor's expects YPF to continue strengthening its
solid business position and maintaining sound cash-flow
protection measures despite some additional intervention of the
Argentine government (for example, in the form of new or
additional taxes).

Primary Credit Analyst: Pablo Lutereau, Buenos Aires
(54) 114-891-2125;

Secondary Credit Analyst: Emmanuel Dubois-Pelerin, Paris
(33) 1-4420-6673;


GLOBAL CROSSING: Boosts Telmex's IP-based Network
Global Crossing (Nasdaq: GLBC) announced Monday an agreement
with the Telmex Group of companies, which includes Telefonos de
Mexico, Mexico's largest telecommunications Company. The
agreement enables the Telmex Group to interconnect its
operations in South America, Mexico and the United States,
including its recently acquired assets in the region --
Embratel, AT&T Latin America, Metrored Argentina, Techtel and
Chilesat, among others. Utilizing Global Crossing's premier
global IP-based network, the new services enable the Telmex
Group to deliver voice, Internet Protocol (IP) and network
operation services.

The announcement expands an existing business relationship
between Global Crossing and the Telmex Group. Last year, Global
Crossing and Telmex de Mexico signed a commercial agreement for
bilateral voice interconnection, which allows Global Crossing to
send traffic to Mexico and Telmex to transport long-distance
voice traffic to the United States. Telmex has been Global
Crossing's primary local access provider for data services in
Mexico since 2001.

"Global Crossing's premier IP network will provide Telmex the
top-quality service and reach it needs given its recent number
of acquisitions throughout Latin America," said John Legere,
chief executive officer of Global Crossing. "Our Company is
committed to providing our customers with one seamless service
continuum from access provider to carrier to end user."

Connectivity for the Telmex Group will be provided via several
new and expanded international private line leases with short
and long-term commitments Global Crossing's private line service
provides high- reliability, point-to-point, digital
connectivity. Global Crossing's local presence, multi-lingual
customer support throughout Latin America, global reach and
service flexibility were critical components in gaining the new

"Our presence and customer service throughout Latin America and
the world are key differentiators for major regional carriers
like Telmex," commented Jose Antonio Rios, chief administrative
officer and international president of Global Crossing. "Telmex
is the perfect fit for Global Crossing's network and product

Global Crossing's significant Latin American presence includes
offices and operational facilities in eleven of the region's
major cities. Through its redundant sub-sea and terrestrial
cable systems, Global Crossing seamlessly connects South
America, Mexico, Central America and the Caribbean to the rest
of its global network, delivering services to more than 500
cities in 50 countries around the world.

Global Crossing's unique converged IP data networking solutions
make it the ideal partner for facilities-based
telecommunications carriers. By leveraging Global Crossing's
services in previously un-reached regions, these carriers gain
the ability to serve their end customers with their own services
around the globe.

About Global Crossing

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

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

CONTACT: Global Crossing
         Press Contacts
         Ms. Kendra Langlie
         Latin America
         Phone: + 1 305-808-5912

         Mr. Tom Topalian
         North America
         Phone: + 1 973-937-0154

         Analysts/Investors Contact
         Ms. Laurinda Pang
         Phone: + 1 800-836-0342
         Web site:

LORAL SPACE: Launches X-Band Satellite
XTAR, the world's first commercial provider of X-band services,
announced Saturday that its XTAR-EUR satellite was successfully
launched, sent into space from the European Spaceport in Kourou,
French Guiana aboard an Ariane 5 ECA rocket. XTAR is a joint
venture between Loral Space & Communications and HISDESAT.

"The launch of XTAR-EUR represents the birth of a new dimension
in satellite services. XTAR is designed to provide much-needed
X-band capacity to the U.S. and other friendly nations in
support of their military and government communications
requirements," said Dr. Denis Curtin, chief operating officer,

"The XTAR-EUR satellite's footprint covers a large geographic
area stretching from Eastern Brazil and the Atlantic Ocean,
across all of Europe, Africa and the Middle East to as far as
Singapore, providing critical X-band services at a time when
conventional military X-band systems are frequently at full

The XTAR-EUR satellite will enter commercial service at 29
degrees East longitude in the second quarter of 2005, after the
completion of routine in-orbit tests.

The Spanish Ministry of Defense (SMOD) is XTAR's first customer,
leasing 238 MHz of X-band capacity on XTAR-EUR until its primary
satellite, SPAINSAT, enters service, at which time XTAR will
provide back-up capacity to the SMOD on XTAR-EUR. In addition,
XTAR will lease eight 72 MHz X-band transponders on SPAINSAT, to
be designated XTAR-LANT, in order to provide greater flexibility
and additional X-band services.

The XTAR-EUR satellite features on-board switching and multiple
steerable beams, allowing users access to X-band capacity as
they travel anywhere within the footprint of the satellite.

XTAR-EUR is designed to work with existing X-band terminals, as
well as next generation X-band terminals that feature antennas
smaller than 2.4 meters.

Weighing four tons at launch, XTAR-EUR is based on SS/L's space-
proven 1300 platform and carries twelve wideband and high-power
X-band transponders. XTAR-EUR, which has a specified service
life of 15 years, maintains station-keeping and orbital
stability by using bipropellant propulsion and momentum-bias
systems. In all, SS/L satellites have amassed more than 1,100
years of on-orbit service.

XTAR, LLC is a new satellite communications company committed to
serving the long-haul communications, logistics and
infrastructure requirements of the U.S., Spanish and allied
governments. The Company is a joint venture between Loral, which
owns 56 percent, and HISDESAT, which owns 44 percent. XTAR is
headquartered in Rockville, Md., and has offices in Arlington,
Va., Palo Alto, Calif. and Madrid, Spain.

HISDESAT Servicios Estrategicos S.A. is a Spanish Company
headquartered in Madrid and incorporated on July 17, 2001.
HISDESAT's aims are the acquisition, operation and
commercialization of Government-oriented space systems,
beginning with satellite communications in the X-band and Ka-
band frequencies. HISDESAT is owned jointly by Hispasat, S.A.,
the Spanish commercial satellite services Company, INSA (100%
owned by the Spanish government) and the leaders of Spain's
space industries: EADS-CASA Espacio, INDRA and SENER. HISDESAT
will provide enhanced capabilities, including Ka-band, for
Spain's defense applications.

Space Systems/Loral is a premier designer, manufacturer, and
integrator of powerful satellites and satellite systems. SS/L
also provides a range of related services that include mission
control operations and procurement of launch services. Based in
Palo Alto, Calif., the Company has an international base of
commercial and government customers whose applications include
broadband digital communications, direct-to-home broadcast,
defense communications, environmental monitoring, and air
traffic control. SS/L is ISO 9001:2000 certified.

Loral Space & Communications is a satellite communications
company. In addition to Space Systems/Loral, through its Skynet
subsidiary Loral owns and operates a fleet of telecommunications
satellites used to broadcast video entertainment programming,
and for broadband data transmission, Internet services and other
value-added communications services.

CONTACT: Mr. John McCarthy
         Phone: (212) 338-5345

         Web site:


BRASKEM: Explores Partnership With PDVSA Subsidiary
Braskem and Pequiven, the petrochemical arm of Venezuelan oil
company PDVSA, have signed a memorandum of understanding to
evaluate opportunities of developing business together in
Venezuela within Braskem's strategic focus - thermoplastic
resins. An agreement to this effect was signed within the
context of the bilateral meeting of the presidents of Brasil,
Luis Inacio Lula da Silva, and Venezuela, Hugo Chavez, which
took place on February 14 of this year.

Access to raw materials with the appropriate quality, quantity
and competitive cost is a strategic question for the
petrochemical industry. Within this context, Venezuela offers
major opportunities. It has the largest reserves of oil and
natural gas in Latin America and occupies a strategic position
in geographic and logistical terms compared to other
international markets.

For its part, Braskem is studying the best alternatives for its
sustained growth within a perspective of a strong increase in
demand for thermoplastic resins on the domestic and regional
markets and in line with its commitment to create value for its

The studies to be carried out together with Pequiven are
supplemental to the growth projects that already have been
identified by Braskem, such as a new polypropylene plant in
partnership with Petrobras in Paulinia (SP) and a new integrated
polyethylene center on the Brazil-Bolivia border, based upon
Bolivian gas. Braskem's eventual participation in these projects
will be supported by its own generation of operating cash and
loans from development banks and multilateral lending

About Braskem

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

CONTACT: Ms. Fernanda Zanichelli
         CL-A Comunicacoes
         Phone: 11 3443-9099
                11 3082-3977

CERJ: To Issue BRL400 Mln Worth of Debentures in Two Series
Companhia de Eletricidade Do Rio de Janeiro SA (CERJ), one of
two primary electric distribution utilities in the state of Rio
de Janeiro, plans to issue BRL400 million in debentures, reports
Dow Jones Newswires.

CERJ, which operates under the brand name Ampla, is offering
non-convertible debentures in two series: the first will pay
interest based on the CDI interbank interest rate, with
semiannual interest payments and a bullet maturity in 2008,
according to S&P.

The second will be linked to the IGP-M inflation index and will
have annual interest payments with a bullet maturity in 2010.

The Company plans to price the debentures after a bookbuilding
process, and is holding roadshows in Rio de Janeiro on Feb. 22
and Sao Paulo on Feb. 23, the firm said. Coordinating the issue
are Banco Itau BBA, Unibanco and Banco Santander Brasil.

Proceeds of the operation will be used to cover CERJ's
investment program for this year, prepay some existing BRL150
million of debentures, and pay-down working capital loans.

Spain's Endesa SA (ELE) owns 91.9% of CERJ shares either
directly or through its Chilean subsidiaries, while Energias de
Portugal SA (EDP) owns 7.7%, and the remaining 0.4% is owned by
other shareholders.

KLABIN: Ends 2004 With $1.1B in Gross Revenues
Paper production reached a record level in 2004, totaling 1.5
million tons, up 6% from the previous year. Another record was
registered in the industrial multiwall bags segment, with a
total of 111 thousand tons sold in 2004, i.e. 8% more than in
2003. Corrugated shipments amounted to 413 thousand tons in
2004, a 12% increase when compared to 2003.

The debottlenecking project in Monte Alegre was completed in
late 2004, enabling the Company to expand its pulp production by
100 thousand tons, which will be used to manufacture packaging

Highlights in 2004:

- Paper and packaging paper sales hit a record of 1.3 million
tons, up 13% from 2003.

- Wood sales to third parties also reached a record level of 3.3
million tons, exceeding the volume sold in 2003 by 39%.

- Exports amounted to 555 thousand tons, generating US$ 279
million in revenue or 30% more than in 2003.

- EBITDA totaled R$ 990 million in 2004, with a margin of 36%.

- Supplementary dividends to be paid in April 2005: R$ 92.05 per
1,000 common shares and R$ 101.26 per 1,000 preferred shares.
The total dividends related to the year 2004 will be R$ 165

Initial Considerations

As the restructuring program implemented in 2003 does not permit
an appropriate comparison between the figures reported in 2004
and 2003, pro forma financial statements have been prepared for
the year 2003, disregarding all business operations that are no
longer part of Klabin S.A. Thus, the comments and comparisons
contained in this release regarding the operating results of
2003 refer to pro forma financial statements.

The information presented herewith in connection with the
Company's operations and finances in 2004 and 2003 consists of
consolidated figures stated in local currency (R$), according to
the general accounting principles adopted in Brazil, except
where otherwise indicated.

Sales Volume and Net Revenue

Consolidated paper and packaging paper sales in 4Q04 amounted to
325 thousand tons, up 7% from 4Q03 and 7% down 3Q04. The
domestic market accounted for 61% of this volume, reaching 197
thousand tons, 9% down 3Q04 (216 thousand tons). Net revenue
including wood totaled R$ 702 million, which is 17% more than
the same period of 2003 and 5% lower than 3Q04.

In 4Q04, Klabin exported 128 thousand tons of paper and
packaging paper or 12% more than in 4Q03 and 2% down 3Q04.
Export revenues amounted to US$ 71 million, a 33% and 4%
increase, in dollar, when compared to 4Q03 and 3Q04
respectively, despite the appreciation of the Brazilian real
throughout in the 4Q04.

Operating Result

Gross profit totaled R$ 315 million in 4Q04, with a gross margin
of 45%, 30% higher than 4Q03 and 11% down 3Q04. Sales expenses
in the amount of R$ 66 million (14% lower than 3Q04), accounting
for 9% of net revenue were still influenced by higher export
freight costs, which totaled R$43 million.

General & administrative expenses amounted to R$ 49 million,
representing 7% of net revenue versus 5% in 3Q04. This variation
was primarily due to a salary adjustment for all headquarters
and most of Klabin's 19 industrial plants. Such adjustments
averaged out at 8%.

Operating results before financial expenses (EBIT) totaled R$
190 million in 4Q04, up 86% from 4Q03 and 15% down 3Q04.


Operating cash generation (EBITDA) amounted to R$ 248 million in
4Q04, which is 55% higher than the 4Q03 and 12% lower than the
3Q04. EBITDA margin reached 35% despite the negative effect of
the appreciation of the real against the U.S. dollar on export
revenues in 4Q04.

Financial Result

Net financial expenses totaled R$ 45 million (5% down 3Q04), due
to the impact of a stronger real on dollar-denominated assets,
which exceeded the liabilities stated in the same currency as in
December 31, 2004.

Net Result

The net profit reported in 4Q04 was R$ 89 million or 46% higher
when compared to the R$ 61 million registered in 4T03.

Sales Volume and Net Revenue

Consolidated sales (excluding wood) totaled 1,343 thousand tons
in 2004, up 13% from 2003. This superior performance was due to
a 21% (97 thousand tons) growth in exports and Brazil's economic
recovery, which increased the volume of products sold to the
domestic market by 7% (56 thousand tons).

Wood sales to third parties reached a record volume of 3.3
million tons in 2004, a 39% expansion when compared to 2003.
Gross revenue amounted to R$ 3.2 billion or US$ 1.1 billion in
2004. Consolidated net revenue (including wood) totaled R$ 2.7
billion, up 15% from the previous year. Exports accounted for
30% of this amount, a 24% growth in relation to 2003.

Operating Result

Klabin reported a gross profit of R$ 1.3 billion in 2004, which
is 15% higher than 2003. Gross margin remained leveled at 46% in
2004. Operating results before financial expenses amounted to R$
759 million, up 19% from the year 2003, with an operating margin
of 28%.

Operating Cash Generation (EBITDA)

Operating cash generation (EBITDA) reached R$ 990 million in
2004, which is 14% higher than 2003, with a margin of 36%
despite the negative impact of an 8.1% currency variation of the
real against the U.S. dollar on export revenues.

Financial Result and Indebtedness

Klabin's net debt at the end of 2004 was R$ 498 million. With
emphasis on the extension of debt payment terms from 34% short-
term and 66% long term (in December 2003) to 25% short term and
75% long term.

Foreign currency totaled US$ 256 million, a reduction of US$ 10
million when compared to 2003. They account for 42% of gross
debt, down 10% from 2003. Trade finance (natural hedging)
represents 80% of Klabin's total indebtedness in foreign

Hedged contracts totaled US$ 100 million at the end of December

The EBITDA / Net Financial Expense ratio in 2004 was 6.3 times.
Net debt corresponds to 19% of total capitalization, and the Net
Debt / EBITDA ratio is 0.5 times.

In 2004, Klabin registered in the Comissao de Valores
Mobiliarios (CVM) a program for the issue of debentures not
convertible into shares, in the amount of R$ 1.0 billion. In
December, the Company issued the first series, totaling R$ 314
million, with a 3-year maturity and paying 105.5% of the yield
on Interbank Certificates of Deposit (CDI).

Klabin is applying for an R$ 195 million financing agreement
with BNDES to support planned Capex on its industrial units and
forest implementation projects.

Net Result

The net profit reported in 2004 was R$ 456 million.

Business Evolution


In 2004, Klabin harvested 8.1 million tons of Pine and
Eucalyptus logs or 14% more than in 2003. Of these, 4.8 million
tons were transferred to its paper mills in Parana, Santa
Catarina and Sao Paulo.

Wood sales to sawmills and laminators in Parana and Santa
Catarina reached a record volume of 3.3 million tons in 2004, up
39% from 2003. Demand for Pinus and Eucalyptus logs remained
high practically throughout the year. In addition, prices were
more favorable when compared to those practiced in the previous

Net revenue from wood sales to third parties amounted to R$ 302
million, a 47% increase when compared to the previous year. The
most important factor behind this growth was the U.S.
construction industry, which reflects the economic expansion of
that country.

Highlights in the forest business include the certification of
Klabin's forest farms in Santa Catarina by the Forest
Stewardship Council (FSC). The forest farms in Parana had their
FSC Certificate renewed in 2003. This represents an important
commercial advantage since it facilitates the access of Klabin's
customers to some markets, such as the European Union. However,
it is above all a confirmation of Klabin's good performance in
forest management, from an environmental, economic and social

The Company had 353 thousand hectares of forest area at the end
of 2004, including 185 thousand hectares of forest plantations
and 120 thousand hectares of preserved native forests.

Maintaining a long tradition, Klabin continues to promote the
socioeconomic development of local communities with whom it does
business, such as those in Telemaco Borba (PR), Octacilio Costa
(SC) and Correia Pinto (SC). In these regions approximately 60
sawmills and laminator workshops were set up generating over
4,000 direct jobs.

In 2004 more than 4,500 hectares of forestation were developed,
reaching 50,000 hectares, with the participation of ten thousand
small and medium-sized producers.


Paper and cardboards sales to third parties reached a record
volume of 786 thousand tons in 2004, up 13% from the previous
year. Exports accounted for 65% of the total volume sold in this
segment, an increase of 20% when compared to 2003.

Kraftliner exports amounted to 435 thousand tons in 2004, a 21%
increase in relation to 2003. The products were shipped to
regular clients in Argentina, Chile, Europe, Asia and Africa.

Cardboard sales totaled 302 thousand tons, with large volumes
sold to Tetra Pak (Brazil, Argentina and China) and to local
customers, including Brazilian companies that export poultry,
meat and meat products. Klabin also exported cardboard products
directly to offshore clients.

Net revenue also reached a record level of R$ 1.2 billion, up
14% from the previous year. Exports accounted for 58% of this
amount, which is 23% higher when compared to 2003.

The recovery of the US economy reduced the kraftliner supply in
the world, thus the international kraftliner prices rose around
US$ 100/ton in 2004.

The debottlenecking project at Monte Alegre concluded at the end
of 2004, will enable the Company to expand its pulp production
by 100 thousand tons in 2005. The additional output will be used
for the manufacture of packaging paper.

It was also in 2004 that Klabin began to plan a project designed
to increase its installed capacity for paper and cardboard
production at Monte Alegre to 900 thousand tons per year. This
is part of the Klabin Program, an initiative intended to boost
the Company's packaging paper and cardboard production capacity
from 1.5 million to 2.0 million tons per year. The basic
engineering began in January 2005. The decision to invest will
be taken in the second half of 2005. Full deployment is expected
by the year end 2007.

In order to fill in the gap in carton board output between 2005
and 2008, Klabin has decided to increase its carton board
production capacity at Angatuba (SP) to 100 thousand tons per
year, of which 60 thousand tons will be used to supply the
carton board market. This project will be implemented as of
4Q05. The Capex for this project will be approximately R$ 75


2004 was a good year for Klabin's packaging segment, thanks to
the Brazilian economic recovery and to the foreign demand for
industrialized products, particularly from the food, beverage
and cosmetics segments. Sales volume totaled 413 thousand tons,
up 12% from the previous year (369 thousand tons).

As per preliminary data provided by the Brazilian Association of
Corrugated Producers (ABPO), Brazilian shipments of corrugated
boxes, sheet and accessories totaled 2.1 million tons in 2004,
which is 12% higher than 2003. Klabin's market share remained
leveled at 20%.

Net revenue rose 7% when compared to 2003, totaling R$ 807

This business unit concentrated its capital investments in the
Northeast region in order to increase its participation in the
growing fruit packaging industry in the Sao Francisco Valley, to
supply the demand of companies that have transferred their
plants from the Southeast to this area. A new printer and one of
the most advanced corrugating machines in Brazil were installed
at Goiana (PE) in 2004. A new printer was installed at the Feira
de Santana (BA) mill. These two units are now endowed with
modern technology in terms of corrugating quality and printing
capacity. Furthermore, Klabin has completed the construction of
the Vale do Sao Francisco Distribution Center.

In 2004, Klabin invested in the technological upgrade of its
recycling board plant located in Guapimirim (RJ), aimed to
develop lower base weight and better performance boards.

The primary objective of this project is cost reduction and it
should be concluded by year end 2005. Although this project is
not yet finalized, the plant is already producing cutsized paper
and Klabin has already been able to reduce corrugated boxes'
base weights. Technical upgrade investments are foreseen as well
to capabilities of several conversion units, with emphasis in
regions with more opportunities.


Klabin leads the market for industrial multiwall bags, with a
market share of approximately 47%. The construction industry
(cement) and agribusiness (seeds) are the main customers.

The sale of multiwall bags and related products attained a
record level in 2004, totaling 111 thousand tons. Exports
accounted for 16% of this volume, and they were mainly shipped
to Mexico, Venezuela, Costa Rica, Panama, Nicaragua and the
Dominican Republic.

The most important Capex in this segment in 2004 was the
concentration of (glued and sewn) multiwall bag production at
Lages (SC). This project was completed in December 2004, with
the shut down of the mill in Correia Pinto (SC), it is expected
to result in synergy gains and further cost savings.

With 19 thousand tons of multiwall bags and related products
sold in 2004 and net revenue of R$ 55 million, Klabin Argentina
holds 45 % of the market for multiwall bags in that country.

Capital Expenditures

Below are the capital expenditures made in 4Q04 and in the year
                                            4Q04     2004

  Debottlenecking project in Monte Alegre    37      123
  Packaging and Recycled Paper               13       40
  Environment project in Santa Catarina       3       22
  Forestry: planting and maintenance         10       31
  Current Investments and other projects     27       77
  Expansion of cardboard at Angatuba          7        7
  Total                                      97      300

In 2004, the investments disbursements were lower than the
budget, although the main projects were concluded.

The table below shows the capital expenditures planned for 2005:

  R$ Million                                        2005

  Forestry: planting and maintenance                116
  Paper Mills                                       331
  Conversion                                        108
  Others                                              9
  Total                                             564

Capital Market

Klabin's preferred shares (KLBN4) showed an outstanding
performance in the Sao Paulo Stock Exchange (Bovespa), in 2004.
KLBN4 was the third share in profitability reaching 54.5% in the
year. They presented an appreciation of 44%, while the Sao Paulo
Stock Exchange Index (Ibovespa) rose only 18%.

There was also a significant improvement in terms of liquidity,
and Klabin shares are negotiated in all trading session held at

Trading totaled 47,500 transactions involving 241 million
shares, and a daily traded volume of R$ 4.1 million.

Klabin shares were also traded in the U.S. market. These Level I
ADRs are now listed in the OTC (over-the-counter) market under
code KLBAY.

The capital stock of Klabin S.A. is represented by 918.8 million
shares, segregated into 317.0 million common shares and 601.8
million preferred shares.


In an Extraordinary Meeting held on September 10, 2004, the
Board of Directors approved the distribution of intermediary
dividends of R$ 76.71 per 1,000 common share (ON) and R$ 84.38
per 1,000 preferred share (PN), starting on October 6, 2004. The
total amount of intermediary dividends distributed was R$ 75.0

In the Extraordinary General Meeting to be held on March 30,
2005, Company Management will propose the distribution of
supplementary dividends in the amount of R$ 90 million: R$ 92.05
per 1,000 common shares and R$ 101.26 per 1,000 preferred
shares. Thus, the total dividends related to the year 2004 will
be R$ 165 million.

Klabin has a commitment to distribute at least 25% of its net
profit per year after making the provisions required by law. In
order to increase its stockholders' remuneration, the Company
distributed 28% of its adjusted net profit in 2003, and it
expects to distribute 38% in 2004.


Klabin is rated as a Level I corporation in terms of Corporate
Governance by the Sao Paulo Stock Exchange (Bovespa). The
Company's policy regarding the services provided by independent
auditors and unrelated to the external audit is based on
principles designed to preserve the auditor's independence.

The principles establish that:

The auditor should not audit its own work;
The auditor should not exercise management functions;
The auditor should not provide legal advice on behalf of its own

In compliance with CVM Instruction no. 308/99, Klabin hired the
services of Deloitte, Touche & Tohmatsu as independent auditors
in 2004.


The world economy grew 4% in 2004 while the Brazilian economy
around 5%. With the international scenario expected to remain
favorable and the world economy to continue growing, Brazil's
economy should be able to continue expanding at a significant
rate in 2005, giving an increase to Klabin's business both
domestically and internationally.

Klabin will continue to focus on the export market despite the
expected appreciation of the real against the U.S. dollar. As
part of a plan to increase its own paper production capacity to
2 million tons per year, the Company is determined to raise
exports share from 30% to 40% of total sales.

Major Capex planned for 2005 include:

- planting more Pine and Eucalyptus forests;
- expanding the production capacity of the Angatuba mill to 100
thousand tons per year,
- 60 thousand tons of which will be used to supply the carton
board market; besides the investments in the corrugated boxes
and industrial multiwall bags plants.

In 2004, Klabin began to plan a project designed to boost the
installed capacity for packaging paper and cardboard production
at Monte Alegre to 900 thousand tons per year. It is part of the
Klabin Program, an initiative intended to increase the Company's
packaging paper and cardboard production capacity from 1.5
million to 2.0 million tons per year. The basic engineering
began in January 2005. The decision to invest will be taken in
the second half of 2005, full deployment is expected by year end
2007, with an expected investment of approximately US$ 500
million, with outlays already scheduled for the years 2006 and

Klabin accounts for 62% Brazil's total kraftliner production,
and it is the largest exporter, with 87% of Brazilian exports.
Also, it should maintain its leading position in the segments of
the domestic market, including the market for carton board
products for a variety of applications, corrugated boxes,
packaging systems and industrial multiwall bags.

In 2005, Klabin will begin to supply Tetra Pak in South Africa
and Singapore, thus consolidating its position as a global

With a gross revenue of R$ 3.2 billion in 2004, Klabin stands as
the largest integrated packaging paper manufacturer in Brazil,
with a production capacity of 1.5 million tons per year, and as
a leader in most of its business markets. For strategic
purposes, the Company will focus on the following business
lines: packaging paper and cardboard products, corrugated
cardboard boxes, multiwall bags and wood.

To view financial statements:

CONTACT: Mr. Ronald Seckelmann
         CFO and IR Director

         Mr. Luiz Marciano Candalaft
         IR Manager
         Phone: (11) 3225-4045

         Mr. Gustavo Vittorazze Schroden
         IR Analyst
         Phone: (11) 3225-4059

LIGHT SERVICOS: Various Groups Slam Additional Rates Hike
Power regulator Aneel's recent decision to grant Light Servicos
de Eletricidade S.A with a 6.13% rates hike has been met with
strong opposition by various groups, indicates Business News

On Feb. 2, Aneel authorized the extraordinary hike, which is on
top of the 13.5% November increase, after concluding that the
overall value of Light's infrastructure is actually higher
than the figure used for the November Adjustment; and that the
PIS-Cofins social security taxes had not been properly
accounted for in November.

But the local press and consumer defense groups saw this
authorization as Aneel's way of trying to bailout Light to help
it pay its US$1.5 billion debt.

Now, public prosecutors are asking the finance ministry to veto
the increase. The ministry has to give the green light for all
power rate adjustments granted outside the normal yearly
adjustments, local press reported.

Light sells power in 33 towns in the southeastern state of Rio
de Janeiro.

          Avenida Marechal Floriano, 168
          20080-002 Rio de Janeiro, Brazil
          Phone: +55-21-2211-2794
          Fax:   +55-21-2211-2993
          Home Page:
          Bo Gosta Kallstrand, Chairman
          Michel Gaillard, President and CEO
          Joel Nicolas, Executive Director, Operation
          Paulo Roberto Ribeiro Pinto, Executive Director,
                                 Investor Relations and CFO

SADIA: Pays Interest on Equity
SADIA S. A., announces to its shareholders that, on February 14,
2005, the Board authorized the payment of interest on equity
related to 2004 earnings, being R$ 0.01194 per common share and
R$ 0.01313 per preferred share (R$ 0.1313 per ADR). The interest
on equity will be calculated according to the minimum dividend
required by Brazilian securities law, to be approved at the next
general shareholders' meeting. The corresponding credit will be
posted in the Company's accounting records on December 31, 2004
in the shareholders' names. Payment will be made on March 14th,
2005, based on the record date at February 28th, 2005, and
retaining 15% (fifteen per cent) income withholding tax,
pursuant to Paragraph 2 of Article 9 of Law No. 9.249/95, except
for those shareholders that are legally recognized as tax-exempt
investors. Shares shall be traded on the Sao Paulo, New York and
Madrid Stock Exchanges, without the right to such interest on
equity, as of March 1st, 2005, including that date.

Shareholders possessing bank accounts will have the amount
automatically credited on the above mentioned payment date. All
other investors will receive a "Dividend Credit Notice" by mail,
at those addresses on file with Banco Bradesco.

Tax-exempt investors not subject to income withholding tax must
comply with applicable law by submitting the required documents
by March 1st, 2005 to the following address:

Banco Bradesco
Departamento de Acoes e Custodia
Predio Amarelo - 2 andar
Cidade de Deus, Osasco
SP - Brazil CEP 060029-900

About Sadia:

Sadia S.A. is concentrated in the agro industrial and food
processing segments. The Company is a slaughterer and
distributor of poultry and pork products, as well as a domestic
exporter of poultry.

         Rua Fortunato Ferraz, 659
         Vila Anastacio, SP
         Sao Paulo 05093
         Phone: (212) 815-2153
         Fax: (212) 571-3050

         Web Site:

Standard & Poor's Ratings Services assigned its 'BB-' foreign-
currency long-term credit rating to Unibanco-Uniao de Bancos
Brasileiros S.A.'s Brazilian reais (BrR) 325 million MTNs
(equivalent to $125 million at the time of the issuance).

These notes are denominated in Brazilian reais (BrR) and indexed
to IGPM (inflation index), and were issued in February 2005,
maturing on Feb. 11, 2010. The final coupon of the transaction
was 8.70% p.a. over the variation of the IGPM index (IGPM is an
inflation index published by the private Getulio Vargas
Foundation). "Although the interest rate is calculated based on
the nominal amount of Brazilian reais, the interest and
principal payments are settled in hard currency, and
consequently the issue was assigned the same foreign currency
rating as the bank," said Standard & Poor's credit analyst
Tamara Berenholc.

The counterparty credit ratings on Unibanco (LC: BB/Stable/B;
FC: BB-/Stable/B) incorporate the implicit risks of operating in
the Brazilian market; its operational efficiency, which is in
line with that of its domestic competitors but still inferior to
that of its Latin American peers; and the relatively weak
quality of its credit assets, reflected by the significant
volume of net write-offs compared to total loans when compared
to its domestic rivals. Partially counterbalancing these
aspects, the ratings also mirror the growth of the institution's
franchise in Brazil by means of acquisitions and associations;
its business strategy, which is aligned with the current
scenario of the competitive Brazilian market; and its strong
capacity to generate business.

In September 2004, Unibanco was the third-largest Brazilian
private bank in terms of total assets. Its growth strategy
through acquisitions, strategic alliances with large retail
chains, and organic growth has helped the institution remain as
one of the main players in the Brazilian financial system. In
our opinion, the bank should continue to benefit from the
generation of business derived from its attractive franchise in
insurance, credit cards, third-party asset management, pension
funds, and credit.

The stable outlook on Unibanco's local currency counterparty
credit rating reflects our expectation that, while operating
more actively in the retail market, the bank should conserve its
profitability at levels close to those presented in September
2004. The stable outlook also factors in our expectation that,
although the bank may experience some increase in problematic
loans due to the characteristics intrinsic to the Brazilian
retail market (which could put some pressure on its NPL ratio),
the stringent monitoring of its credit portfolio quality may not
allow strong deteriorations of its write-off ratios to levels
higher than the current ones. The stable outlook on the foreign
currency counterparty credit rating reflects that of the
sovereign foreign currency rating on Brazil.

UNIBANCO: Bear Stearns Raises Recommendation to Peer Perform
Bear Stearns upgraded its stock recommendation on Unibanco to
peer perform from underperform on Monday, according to Dow Jones

The investment house said the stock has a similar upside
potential to other Brazilian banks, Banco Bradesco SA (BBD) and
Banco Itau SA (ITU), which are rated peer perform.

"We do not anticipate that Unibanco will be able to match the
profitability of Itau and Bradesco. However, we do expect
Unibanco to post a greater improvement in its profitability in
2005 albeit coming from a much lower base," Bear Stearns said in
a research report.

Bear Stearns also increased its 2005 price target for Unibanco
to US$32.59 per American Depositary Receipt, up 9% from its
earlier forecast of US$29.83.


AES GENER: Seeks Approval to Build 740MW Plant
AES Gener SA, a unit of US-based power Company AES Corp., has
submitted to the main environmental authority its proposal to
build a US$345-million, 740-megawatt Totihue thermoelectric
plant, reports Dow Jones Newswires.

If the environmental authority approves the proposal, Gener will
build the plant in two phases, with the first to begin in
September and the second within the coming five years.

Gener designed the Totihue plant to use natural gas, which could
pose for the Company, as Chile's top supplier of the fuel -
Argentina - has proven unreliable.

Nearly a year ago, Argentina announced it was rationing gas
exports to stave off an energy crisis while both countries have
experienced sharply higher demand for power.

         Mariano Sanchez Fontecilla 310, Piso 3
         Santiago, Chile
         Phone: (56-2) 6868900
         Fax: (56-2) 6868991
         Web site:

CTR: SR Telecom Obtains Waiver in Respect to Debt
SR Telecom(TM) Inc. (TSX: SRX; Nasdaq: SRXA) announced Monday
that it has reached an agreement with the lenders of
Comunicacion y Telefonia Rural S.A. (CTR), its service provider
subsidiary in Chile. Pursuant to the agreement, CTR's lenders
have waived compliance with certain financial and operational
covenants contained in CTR's loan documents to March 31, 2005.

SR Telecom also announced Monday that it has engaged Genuity
Capital Markets to act as financial advisor and investment
banker to assist the Company in its refinancing activities.
Genuity Capital Markets will facilitate and expedite the
development and implementation of financing solutions, which
will allow the Company to continue focusing on its operational

"We are encouraged by the sales and bidding activity that we
see, and pleased by the continuing support of our customers
during this challenging period," said Pierre St-Arnaud, SR
Telecom's President and Chief Executive Officer.

About SR Telecom

SR TELECOM (TSX: SRX, Nasdaq: SRXA) designs, manufactures and
deploys versatile, Broadband Fixed Wireless Access solutions.
For over two decades, carriers have used SR Telecom's products
to provide field-proven data and carrier-class voice services to
end-users in both urban and remote areas around the globe. SR
Telecom's products have helped to connect millions of people
throughout the world.

A pioneer in the industry, SR Telecom works closely with
carriers to ensure that its broadband wireless access solutions
directly respond to evolving customer needs. Its turnkey
solutions include equipment, network planning, project
management, installation and maintenance.

SR Telecom is a principal member of WiMAX Forum, a cooperative
industry initiative which promotes the deployment of broadband
wireless access networks by using a global standard and
certifying interoperability of products and technologies.

EDELNOR: Swings to a Loss in 2004
Chilean power generator Empresa Electrica del Norte Grande S.A.
(Edelnor), which operates in the Northern Interconnected System
(SING), reported a loss of US$5.64 million in 2004, reversing
profits of US$39.6 million in 2003.

Citing a filing with the country's securities commission (SVS),
Business News Americas reports that the Company's operating
revenues increased 18.8% to US$110 million and operating losses
improved to US$6.7 million from losses of US$14 million in 2003.

However, non-operating profits fell to US$1.17 million in 2004
compared to US$60 million profits in 2003 due to lower income
from exchange rate differences. This was mainly due to the
Company's decision to change its currency for accounting
purposes from pesos to US dollars from January 1, 2004.

Total Company equity stood at US$675 million at December 31
2004, down 1.3% from US$684 million a year earlier.

Edelnor is 82.34%-owned by Inversiones Mejillones S.A., a
holding Company owned by Belgium's Suez - Tractebel S.A. and
Chilean copper producer Corporacion Nacional del Cobre de Chile
(Codelco). It has 687MW installed thermoelectric capacity in the
SING, mainly in Mejillones in Region II.

CONTACT:  Empresa Electrica Del Norte Grande SA
          Avenida Grecia 750
          Antofagasta, Chile
          Phone: +56 55 248500
                 +56 55 248094
          Contact: Fernando del Sol, Chairman

ELECTROANDINA: Ends 2004 With $11.6M Net Losses
Chilean thermo generator Electroandina, a sister Company of
Edelnor, revealed consolidated net losses of US$11.6 million in
2004, versus profits of US$30.6 million in 2003.

In a statement to the country's securities commission (SVS), the
Company said revenues increased 7% to US$229 million due to
tariff increases and higher demand, but higher operating costs
more than offset the rise.

Operating costs increased 16% due to higher prices and volumes
of coal for generation, a 20% tax on gas exports from Argentina
and an increase in the marginal cost of energy purchases.

As a result, operating losses were US$5.6 million compared to
profits of US$8 million in 2003.

Non-operating losses were US$7.6 million compared to profits of
US$29 million in 2003, mainly due to lower income from exchange
rate differences as a result of the new accounting norms.

Total Company equity stood at US$585 million at December 31
2004, down 3.5% from US$606 million a year earlier.

ElectroAndina is the largest generator in Chile's northern
interconnected transmission system and the third largest overall
with installed capacity of 1,028 MW, including the 400 MW
Tocopilla combined-cycle unit which began commercial operations
in February 2001.

E L   S A L V A D O R

* EL SALVADOR: IMF Board Wraps Up Article IV Consultation
On January 31, 2005, the Executive Board of the International
Monetary Fund (IMF) concluded the Article IV consultation with
El Salvador.


El Salvador has implemented a wide range of structural reforms
over the last decade. Impressive reforms-including trade
opening, privatization, and tax policy, civil service, and
pension reform-have been supported by a broad national
consensus. The reform effort was capped with official
dollarization in 2001, which helped reduce interest rates and
consolidated low inflation. This strategy has contributed to
considerable improvements in per capita income and social

Nevertheless, economic growth in recent years has been dampened
by adverse external conditions (including high oil prices),
major earthquakes, and election-related uncertainties. Real GDP
growth is estimated at about 1« percent in 2004, while inflation
picked up to over 5 percent, owing to higher oil prices. The
public sector deficit is expected to decline to 3 percent of GDP
in 2004 (from nearly 4 percent in 2003), although public debt
remained at 45 percent of GDP and the debt of the nonfinancial
public sector at 40.7 percent of GDP. A strong pick-up in family
remittances more than offset the increase in oil imports,
contributing to a decline in the external current account
deficit to an estimated 4« percent of GDP in 2004 (from 5
percent in 2003). International reserves remained around US$1.7
billion, covering close to 30 percent of bank deposits.

The new government that took office in 2004 has embarked on a
renewed reform effort to improve growth prospects and social
conditions. A recently approved package of tax measures,
including steps to improve tax administration, is projected to
raise revenue by about 1 percent of GDP. Because of budgeted
increases in social spending and investment, however, the fiscal
position in 2005 will remain about the same as in 2004 (i.e., a
primary deficit of about 0.7 percent of GDP). Planned banking
reforms (including tighter prudential norms and improved
supervision) are aimed at further strengthening the banking
system. Congress recently ratified a free-trade agreement with
the United States (CAFTA).

Executive Board Assessment

Executive Directors praised El Salvador's long-standing record
of structural reform and commitment to sound macroeconomic
policies, and considered that official dollarization has served
El Salvador well. Prudent policies and political stability have
underpinned economic growth, significant poverty reduction, low
inflation, and increased market confidence as reflected in El
Salvador's investment-grade credit rating. Directors noted,
however, that major challenges remain. Central among these is
the need to revive economic growth, which has been sluggish as a
result of natural disasters, declining terms of trade, and the
economic slowdown in the United States. In addition, Directors
stressed that dollarization still presents significant
challenges, and that additional efforts are required to ensure
its sustainability. These efforts should focus on strengthening
the public finances and achieving debt sustainability.

Against this background, Directors welcomed the new government's
reform agenda designed to consolidate the economic gains and
maximize the benefits of dollarization, improve growth and
social prospects, reduce external vulnerabilities, and achieve
the Millennium Development Goals. They supported the agenda's
focus on fiscal consolidation and structural reforms to raise
national savings and improve productivity and competitiveness.
They put particular emphasis on efforts to deepen trade reform,
address infrastructure bottlenecks, increase labor market
flexibility, and improve incentives for private investment.
Above all, Directors observed that it will be important to build
society's support for the reform agenda.

Directors considered that moderate primary fiscal surpluses will
be required to place the public debt firmly on a downward path.
In this context, they endorsed the authorities' medium-term
plans to substantially increase tax revenues, including by
strengthening tax administration to reduce tax evasion, and
welcomed congress' recent approval of a package of revenue
measures. Most Directors considered that additional measures may
be needed in light of plans to boost social and infrastructure
spending. Apart from further steps to strengthen the revenue
side, Directors also encouraged the authorities to improve
public expenditure management-including through further pension
reform, improved control over local government expenditure,
better targeting of subsidies, and other measures recommended in
the 2004 Fiscal Report on the Observance of Standards and Codes.
At the same time, they welcomed the planned increase in social
and infrastructure spending, while containing non-productive
spending and the wage bill, noting that well-targeted social
investment is crucial for building human capital. They also
supported plans to involve the private sector in infrastructure
projects. Directors welcomed recent reforms to the pension
system, stressing at the same time the need for increases in the
retirement age. Directors endorsed the authorities' debt
management strategy, which aims at further lengthening
maturities and reducing financing costs.

Directors welcomed the authorities' plans to make financial
sector strengthening a priority in the coming years, including
the restructuring of the central bank. They encouraged the
authorities to push ahead with the planned transfer of the
central bank's non-monetary liabilities to the government, in
order to eliminate central bank liquidity risks and enhance
fiscal transparency. Some Directors also recommended that the
central bank develop further its lender of last resort function
and raise net international reserves over the medium term.

Directors welcomed the findings of the 2004 Financial System
Stability Assessment (FSSA) update, which indicate that the
financial sector generally is in good health and that
dollarization has strengthened financial stability. They
commended the authorities' strategy for banking sector reform
and the envisaged alignment of prudential rules with
international best practice, in line with the FSSA
recommendations. They stressed, in particular, the importance of
plans to strengthen consolidated supervision-especially for
cross-border activities-as well as the autonomy of the
superintendency of banks and bank resolution practices.
Directors also called for a strengthening of the two state-owned
banks and the deposit insurance fund. They also considered
enhanced access to financial services and financial literacy
programs to be essential for raising the national savings rate
and channeling El Salvador's significant remittance inflows into
investment rather than consumption.

Directors welcomed congress' recent ratification of the Central
American Free Trade Agreement. They supported plans to secure
free-trade agreements with other important trading partners, but
also stressed the importance of pursuing further trade
integration within the framework of multilateral trade
negotiations. They emphasized that enhanced competitiveness and
productivity will be needed to enable El Salvador to take full
advantage of trade and investment opportunities arising from
these agreements. In this regard, Directors welcomed the steps
being taken to maintain a prudent wage policy, while stressing
that further labor market flexibility will be important to keep
labor costs competitive. It will be important also to improve
the environment for private investment, including by reducing
crime and corruption, strengthening the legal and regulatory
environment, and improving governance and transparency.

Directors welcomed the authorities' ongoing efforts to improve
macroeconomic statistics in line with Fund recommendations. In
particular, they commended plans to improve the national
accounts and government finance statistics within a framework of
strengthened inter-agency coordination and data sharing.

To view selected economic indicators:

NOTE: Public Information Notices (PINs) are issued, (i) at the
request of a member country, following the conclusion of the
Article IV consultation for countries seeking to make known the
views of the IMF to the public. This action is intended to
strengthen IMF surveillance over the economic policies of member
countries by increasing the transparency of the IMF's assessment
of these policies; and (ii) following policy discussions in the
Executive Board at the decision of the Board.

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

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

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


BALLY TOTAL: Keeps America Going Strong With "Resolution Rescue"
Bally Total Fitness (NYSE: BFT) announced Monday that it will
host a "Resolution Rescue" event at its more than 400 facilities
nationwide on February 17th to help Americans stick to their New
Year's Resolutions to get in shape. The event stems from a Bally
Total Fitness survey of 500 adults which found that an
astonishing 51 percent of those who pledge to make fitness a
priority in the New Year break their resolution by the end of
February. According to Bally Total Fitness personal trainer
Nikki Kimbrough, resolution makers who stick with their
resolutions past the first two months of the New Year are
usually successful at forming a consistent exercise regimen for
the remainder of the year.

"The first six weeks of an exercise program are critical - it is
the point where a habit is formed. I can't express just how
important it is for those who are new to fitness to stick to it
and keep those resolutions. At the six week point, resolution
makers are on the bridge between going to the gym because they
'have-to' and going to the gym because they 'want-to'," said
Kimbrough. "Once fitness is a habit, fitting the gym into your
life becomes as natural and necessary as brushing your teeth or
taking a shower."

During "Resolution Rescue," Bally personal trainers will provide
members and guests with free fitness evaluations, which include
body-fat testing, weight and body measurements and fitness-level
testing. The event is designed to encourage members to renew
their resolutions to get fit and healthy in the New Year, while
providing guests with a better understanding of both their
fitness levels and the steps needed to reach their fitness

Additional "Resolution Rescue" event promotions will include:

-- 20% off Bally nutritional products at Bally Retail Stores

-- 15% discounts on select renewable memberships to prospective

-- Three months of free renewal dues to any member that sponsors
a new member on that day

About Bally Total Fitness

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, China, Korea 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. With an estimated 150 million annual visits to
its clubs, Bally offers a unique platform for distribution of a
wide range of products and services targeted to active, fitness-
conscious adult consumers.

CONTACT: Bally Total Fitness
         Mr. Jon Harris
         Phone: 773-864-6850

PILGRIM PRIDE: Moody's Upgrades Senior Implied To Ba2 From Ba3
Approximately $400 million of Debt Securities Affected

Moody's Investors Service upgraded Pilgrim's Pride's senior
implied rating to Ba2 from Ba3, its senior unsecured note rating
to Ba2 from B1, and its senior subordinated note rating to Ba3
from B2. The rating outlook is stable.

The ratings upgrades reflect the impact of strong markets for
chicken during 2004, which boosted Pilgrim's Pride's free cash
flow and enabled the Company to pay down debt taken on to fund
the acquisition of ConAgra's chicken division in November 2003.
The upgrade also considers that Pilgrim's Pride has largely
integrated the ConAgra operations and has a comfortable
financial cushion to weather the inherent volatility in the
poultry business. The two-notch upgrade of the senior unsecured
and senior subordinated notes conform the note ratings with
Moody's notching practices for issuers with a senior implied
rating of Ba2 or better.

Moody's ratings actions for Pilgrim's Pride Corporation were:

  i)   $300 million 9.625% Senior Unsecured Notes, due September
       2011 -- to Ba2 from B1,

  ii)  $100 million Senior Subordinated Notes, due May 2013 --
       to Ba3 from B2,

  iii) Senior Implied rating -- to Ba2 from Ba3,

  iv)  Unsecured Issuer rating -- to Ba2 from B2.

Moody's does not rate the Company's $168 million senior secured
revolver, maturing 2007; its $500 million senior secured
revolver/term loan, maturing 2011; or $124 million of privately
held senior secured notes, maturing 2012/13. Pilgrim's Pride
also has a $125 million accounts receivable facility and $7
million of other debt (as of 1/1/05). The Company had no
drawings under its revolvers or accounts receivable facility at
1/1/05; approximately $32 million of revolver commitments were
used to back letters of credit.

Pilgrim's Pride's ratings are supported by its scale ($5.7
billion of revenues) and market position. The Company has a
diverse customer base and wide distribution reach. Integration
of the ConAgra business has been largely accomplished, with
synergies in excess of initial estimates. Pilgrim's Pride now is
the second largest chicken producer in the U.S. (16% market
share, behind Tyson, at 23%, and ahead of the 9% share of the
third largest producer, Gold Kist). Moody's expects the Company
to remain one of the dominant North American poultry producers
as the industry continues to consolidate. The ratings also
recognize Pilgrim's Pride's long established focus on value-
added, prepared products (about 45% of chicken sales), which
have higher margins and less volatility than commodity fresh
products. The Company's scale positions it well to supply these
value-added prepared chicken products to the large national food
service and quick-service restaurant channels, and the Company
is building penetration of prepared products into the retail
grocery channel. In addition, the ratings take into account
favorable underlying demand trends for poultry, particulary for
value-added, prepared products.

The ratings further consider that Pilgrim's Pride has built up a
strong liquidity cushion, facilitated by the supportive chicken
markets after acquiring the ConAgra business in November 2003.
Free cash flow after dividends and capital spending has been
ample ($245 million in the LTM ending 1/1/05), amplified by the
chicken market strength during 2004, which more than offset
higher grain costs. Debt has been reduced to $534 million at
1/1/05, from $784 million at 1/3/04, while cash balances have
increased to $171 million from $98 million. Although chicken
markets are off their peaks, grain prices have moderated, and
export demand has remained solid, supporting cash flow
generation over the near term. Moody's expects free cash flow to
drop materially over the next year, however, due to a large
planned increase in capital spending (to $175-200 million in
FY05 from $83 million in FY04). Nevertheless, Pilgrim's Pride's
large cash balances and moderate leverage are expected to
provide an adequate cushion of financial flexibility to weather
unexpected business pressures and weaker poultry markets.

The ratings are restrained by Pilgrim's Pride's business
concentration on chicken, primarily in the US, and the inherent
earnings volatility of its business. Poultry processors are
exposed to commodity input (grain) and output (meat) prices that
are highly variable. A material portion of Pilgrim's Pride's
sales remain in the low margin, fresh meat segment, which has
wide margin variations resulting from commodity price swings.
Poultry markets also can be impacted by international trade-
related developments, such as tariff negotiations with Mexico
and changing Russian import regulations. Export markets are
important to US processors because they provide an outlet for
dark meat and other chicken products not valued by the US
consumer. In addition, poultry operations are exposed to
potential disease and product contamination related losses, such
as Avian influenza and listeria contamination, both of which
significantly impacted Pilgrim's Pride's profitability in

The stable ratings outlook assumes Pilgrim's Pride will maintain
moderate leverage and a comfortable financial cushion while
markets are favorable, so that leverage does not become unduly
high when commodity markets become more challenging, unexpected
events or pressures impact cash flow, or debt is added for
acquisitions. The ratings could become pressured if free cash
flow after dividends and capital spending could be expected to
drop and remain much below 5% of outstanding debt in a down
cycle. Debt-financed acquisitions, as industry consolidation
continues, also could pressure the ratings if the debt component
leaves insufficient financial cushion for periods of market
weakness or adverse business developments following the
acquisition. The ratings could gain support over time from
continued growth in more stable, value-added products that
reduce business volatility. Strategic acquisitions could be
positive if well-bought and funded with a balance of equity and

The senior unsecured notes are rated at the senior implied
level. They are effectively subordinated to $131 million of
senior secured debt (as of 1/1/05). The notes do not currently
benefit from guarantees, but would be guaranteed on a senior
unsecured basis by any domestic subsidiaries that were to incur
indebtedness. Pilgrim's Pride currently does not have subsidiary
debt. Substantially all its domestic operations are held
directly, not through subsidiaries.

The senior subordinated notes are notched below the senior
implied rating to reflect their subordinated status in the
capital structure. The one notch gap between the senior implied
and subordinated notes conforms to Moody's notching practices
for issuers having a senior implied rating of Ba2 or better. The
subordinated notes do not initially benefit from subsidiary
guarantees but would be guaranteed on a subordinated basis by
domestic subsidiaries that incur indebtedness in the future

Pilgrim's Pride currently has moderate leverage and strong
liquidity. Outstanding debt was $534 million at 1/1/05, cash
balances were $171 million, and LTM EBITDA was $444 million.
Debt/LTM EBITDA was 1.2x (1.3x adjusted for operating leases).
LTM free cash flow after $83 million of capital spending and $4
million of dividends was $245 million. Capital spending is
expected to increase to $175-$200 million for FY05, however,
which, combined with some weakening in poultry markets, is
likely to result in lower free cash flow over the next year. The
Company's cash balances and financial flexibility, nevertheless,
should enable leverage to remain reasonable for the rating

Pilgrim's Pride Corporation, based in Pittsburg, Texas, is a
producer of fresh and further processed chicken and turkey
products in the U.S. and Mexico. The Company had revenues of
$5.7 billion in the twelve months ending 1/1/05.

UNEFON: Inks Agreement With QUALCOMM to Offer BREW(R) Services
QUALCOMM Incorporated, pioneer and world leader of Code Division
Multiple Access (CDMA) digital wireless technology, announced
Monday that it has signed a definitive agreement with Unefon, a
leading wireless services provider in Mexico, to offer
downloadable wireless applications and services based on
QUALCOMM's BREW solution in the Mexican market. The rollout of
BREW products and services will allow Unefon subscribers to
access the latest in wireless applications -- including games,
ringtones, productivity tools, business applications and
communication services via their BREW handsets.

"QUALCOMM is excited about working closely with Unefon, an
operator truly committed to providing the highest quality of
wireless services to its subscribers," said Bob Briggs, vice
president of global business relations and operations for
QUALCOMM Internet Services. "This agreement and the pending
rollout of BREW services signals Unefon's focus on providing an
advanced wireless experience and plenty of compelling options to
their subscribers."

"Unefon is confident that our deployment of QUALCOMM's BREW
solution will further the Mexican wireless market by offering
high-quality wireless applications that will enable the most
advanced connectivity, productivity and entertainment features,"
said Adrian Steckel, CEO of Unefon.

"Unefon is thrilled to have the opportunity to work with
QUALCOMM to deliver a wide range of value added wireless
services to our loyal customers in Mexico."

QUALCOMM's BREW solution is designed to meet the distinct and
varied needs of wireless operators, handset manufacturers,
publishers, developers and end users around the world. BREW
products and services include: an open, extensible client
platform that supports robust system and application software
including personalized and branded user interfaces for mass
market devices; a J2EE(TM)-based, modular distribution system
that enables the delivery of content, applications and user
interfaces to wireless devices across all air interfaces; a
dedicated professional services team that supports the
integration of customized implementations; and the wireless
industry's first global marketplace to support the monetization
of applications and services developed in all programming
languages. The BREW ecosystem can make your wireless vision a

CONTACTS: QUALCOMM Internet Services
          Michele Bakic
          Phone: 1-858-651-4017

          Emily Gin, Corporate Public Relations
          Phone: 1-858-651-4084

          Bill Davidson, Investor Relations
          Phone: 1-858-658-4813

Web site:


ANCAP: S&P Issues Report on Ratings
   Corporate Credit Rating                     B/Stable/--

Major Rating Factors


    * Strong market position in the Uruguayan refining and
marketing sector
    * Moderate leverage


    * Refinancing risk, limited financial flexibility
    * Uncertainties regarding market deregulation and the
Company's ability to operate in a competitive environment
    * Volatile economic environment in Uruguay
    * Very weak Argentine subsidiaries


The rating on Administraci˘n Nacional de Combustibles Alcohol y
Portland (ANCAP) reflects the risks inherent in operating as a
single-asset refiner, the challenging economic environment of
Uruguay, the ownership by the Republic of Uruguay, and the
potential effects of the deregulation of the Uruguayan fuels
market. The rating also incorporates Standard & Poor's Ratings
Services' expectations that ANCAP will maintain its dominant
market position.

ANCAP's credit quality remains linked to that of the Republic of
Uruguay, its 100% owner, in several aspects. First, ANCAP is
highly influenced by the Uruguayan government, particularly in
the budget-approval process, indebtedness authorization, and tax
payments. Second, the Company diverts a large portion of its
profits as transfers to the government. Finally, as ANCAP's
operations are concentrated in Uruguay, the country's financial
system developments and growth prospects also affect the
Company. However, because in the past the government gave the
Company appropriate financial management autonomy, the ratings
on ANCAP will not necessarily follow the exact rating trajectory
of the sovereign.

ANCAP currently benefits from its protected position as the
nation's sole petroleum importer, refiner, and supplier of
refined products to Uruguay's distributors. As a way of better
preparing ANCAP for competition in a deregulated market, a law
authorizing the entrance of private capital in the Company was
passed, but was voted against in a referendum held on Dec. 7,
2003. Although the deregulation of the fuel market might now
require different legal instruments and would have a different
schedule, we believe that deregulation will eventually take
place. In that scenario, ANCAP will need to restructure its
operations so as not to become seriously vulnerable to intra-
Mercosur import competition. Nevertheless, in the short-to-
medium term, the Company is expected to continue to enjoy the
benefits of the monopoly, including control of the country's
sole refinery and prime service station locations, established
relationships with distributors, and consumer brand preference.

ANCAP's revenues come mainly from the refined products division.
Given ANCAP's need to import 100% of its crude oil, the Company
is heavily reliant on its ability to pass through fluctuations
in oil prices and exchange rates to its customers. As a state-
owned Company, ANCAP plays an important role in the government's
strategy to minimize the impacts of the macroeconomic crisis,
therefore reducing the Company's ability to adjust prices to
reflect the international swings of the refining business. We
expect prices to fully reach import parity levels as the
economic environment in the country improves.

As of Sept. 30, 2004, ANCAP had approximately $115 million in
financial debt that represented 19.2% of total capitalization.
Improved economic conditions in Uruguay coupled with a favorable
price environment, and an increase in total volumes sold, led to
a significant improvement in ANCAP's financial performance
during 2004. Funds from operations-to-total debt and EBITDA
interest coverage ratios reached 52.9% and 10.8x, respectively,
for the nine-month period ended Sept. 30, from 21.3% and 4.1x in
fiscal 2003. These metrics compare favorably for the rating
category, and the Company was able to extend part of its
maturity profile during 2004 (although at short-term
rescheduling). Nevertheless, a still relatively concentrated
maturity schedule, coupled with the narrow ability of Uruguayan
corporations to borrow abroad, results in an aggressive
financial profile. We expect ANCAP to continue rolling over part
of its maturities during 2005, while credit metrics are expected
to improve as the positive free operating cash flows from higher
production at higher prices are applied to debt reduction.


Standard & Poor's considers ANCAP's liquidity position to be
adequate for the rating category, with cash holdings of about
$37 million as of Sept. 30, 2004, covering approximately 80% of
short-term debt. The Company has been restructuring obligations,
terming out trade payables into financial debt backed by future
sales. Nevertheless, additional cash requirements from the
government to finance the public deficit, or the potential use
of ANCAP's commercial policy to control inflation in the country
could jeopardize the Company's financial position. In addition,
due to the extremely negative environment for the fuel retail
business in Argentina, ANCAP might continue providing financial
assistance to its Argentine 83.4% owned Petrolera del Consur
S.A. (PCSA; during 2004, capital contributions to this
subsidiary reached approximately $16 million).

Additionally, ANCAP guarantees jointly and severally financial
obligations for approximately $30 million (as of Sep. 30, 2004)
from PCSA. The guaranteed obligations include approximately $24
million of a syndicated loan with bullet maturity in December
2005. Although this loan originally amounted to $50 million,
PCSA converted it into Argentine pesos after the devaluation in
Argentina in early 2002 according to Decree No. 214/2002,
considering that the applicable law for the loan is the
Argentine law. Nevertheless, the Administrator Agent disagrees
with this treatment and therefore the dispute is being discussed
in Argentine courts. Any unfavorable resolution under this
discussion could affect ANCAP's liquidity position as guarantor.
In addition, we would consider pesification of the guarantee as
a default.

After the completion of the upgrade of its refinery, ANCAP would
not face significant capital expenditure requirements, and
therefore no additional debt would be required in the medium
term. As is the practice in most Latin American countries, the
Company does not have committed credit lines.


The stable outlook indicates the linkage of ANCAP's credit
quality to the sovereign's financial health. The outlook also
incorporates a successful extension of the Company's maturity
profile that will alleviate its financial profile.

Business Description

ANCAP is Uruguay's government-owned oil & gas Company with
strong roots in the domestic downstream market. The government
incorporated the Company in 1931 to operate the state monopoly
in the fuel and natural gas sectors. ANCAP maintains exclusive
rights over refining activities and crude oil, refined products,
and natural gas imports in the country. The Company also
participates in the cement sector, although it does not have a
monopoly in this activity.

Primary Credit Analyst: Pablo Lutereau, Buenos Aires
(54) 114-891-2125;

Secondary Credit Analyst: Luciano Gremone, Buenos Aires
(54) 11-4891-2143;


PDVSA: Seeks to Complete 2003 Financial Report By End-March
State oil Company Petroleos de Venezuela (PDVSA) hopes to finish
its delayed 2003 financial report for the U.S. Securities and
Exchange Commission by the end of March, Dow Jones Newswires
reports, citing Eudomario Carruyo, PDVSA's director of finance.

The report was originally due nearly a year ago. The Company has
blamed the delay to the December 2002-January 2003 oil strike
that disrupted its finance department.

PDVSA fired more than 18,000 employees in 2003 to break the
strike, which was aimed at pushing President Hugo Chavez from
office. Among those fired were employees from the Company's
financial department.

Carruyo revealed the 2003 filing has been audited by KPMG and
that the accounting firm is also auditing the Company's 2004
results, which should be filed before the July 15 deadline.
Carruyo, however, did not rule out an extension.

PDVSA is required to present annual reports to the SEC due to
its holdings in the US and outstanding debt.

The last time PDVSA filed its results with the SEC was in
October 2003, after asking for two extensions on its 2002

PDVSA: Strengthens Oil Ties With Brazil
The Bolivarian Republic of Venezuela and the Federative Republic
of Brazil have strengthened the ties of Latin American
integration with the signing of fourteen agreements on oil, gas,
and petrochemicals between the countries' oil companies,
Petroleos de Venezuela (PDVSA) and Petroleo Brasileiro
(Petrobras). The objective is to cement the economic and social
complementarities of the two nations, within the framework of

With this objective, the Venezuela-Brazil Business Meeting took
place in the Venezuelan Presidential Palace, Miraflores,
presided by the Brazilian President, Luiz Inacio Lula da Silva
and his Venezuelan counterpart, Hugo Rafael Chavez Frias, who
stated that the meeting was "a true far-reaching strategic
alliance that puts us on the real path towards the full
development of our peoples".

The Venezuelan Head of State pointed out that all of the energy
agreements signed between PDVSA and Petrobras have great
importance, "because the completion of this strategic alliance
marks the point of no-return in the path towards the unity of
the peoples of Latin America ".

The agreements signed by the Venezuelan Minister for Energy and
Petroleum and President and CEO of PDVSA, Rafael Ramirez
Carreno, the Brazilian Minister for Mines and Energy, Dilma
Rousseff and the President and CEO of Petrobras, Jose Eduardo
Durra will boost the development of the Venezuelan and Brazilian
societies and will strengthen the potentiality of the energy
sectors of both South American countries, which will be a
decisive factor for the strengthening of the economic, cultural
and social relationships within the region.

The Venezuelan Minister for Energy and Petroleum and President
and CEO of PDVSA highlighted that "the signed agreements include
the possibility of Petrobras taking part in strategic
associations as a partner of PDVSA in the exploitation of oil
and gas". These agreements will also pave the way for the
consolidation of Petrosur".

Ramirez also alluded to the experience of Petrobras in deep-sea
drilling technology and was optimistic about the possible
participation of the Brazilian oil Company in Block 5 of
Plataforma Deltana and the Gulf of Venezuela, which would
realize the development of the Venezuelan gas industry.

Among the signed agreements, the most noteworthy are those
referring to the joint development of the Mariscal Sucre Project
and the Orinoco Oil Belt, business deals and cooperation
activities in the production and distribution of lubricants,
cooperation in refining, commercialization and maritime
transportation, as well as scientific collaboration and
personnel training. At the same time, the feasibility of the
construction of an oil refinery in Brazil, designed to process
Venezuelan and Brazilian crude, will be evaluated.

Additionally, letters of understanding were signed for the
construction of ships and oil platforms, as well as for the
promotion of the biodiesel industry. Another of the agreements
refers to the production of ethanol as a substitute for lead
tetraethyl in order to protect the environment and diversify the
energy equation of both countries.

The implementation of these agreements will be monitored by a
High Level Binational Commission and its respective work groups,
who will make sure that everything stipulated in the documents
will be carried out within the time estimates, with the purpose
of insuring the effectiveness of the strategic alliance between
Venezuela and Brazil, based on the economic and energetic
complementarities of South America.

CONTACT: Petroleos de Venezuela, S.A.
         Corporate Public Affairs
         Apartado Postal 169, Caracas 1010-A
         Fax: (58 + 2 12) 708.44.60.

PDVSA: Assures Steady Supply of Fuel in Andean States
Petroleos de Venezuela (PDVSA) informs that El Vigia Fuel
Distribution Plant, located in Merida state, that supplies fuel
to Andean states, has a normal inventory level, enough to meet
the region's demand. However, recent heavy rains have severely
damaged the roads that link this plant to the cities of Merida
(capital of Merida state) and San Cristobal (capital of Tachira
state), thus making it impossible for the fuel trucks to
transport the fuel and deliver it to gas stations in those

To face this contingency, and under the coordination of Ministry
of Energy and Petroleum authorities and National Armed Forces,
the decision was made to supply fuel to the Andean region from
the Barquisimeto Distribution Plant (locate it in Lara state in
the western central region).

Fuel and other products tank trucks are already on their way to
Lara state to load fuel and cover the Barinas-San Cristobal and
Barinas-Merida routes.

Once roads have been reopened, trucks will go back to their
regular fuel supply route towards that region.

PDVSA also reports that the Barquisimeto Distribution Plant has
a large enough inventory to meet Andean states fuel demand; and
that Yagua and El Palito (central region) plants will also aid
in the supply of fuel to the midwestern region of the country.

CONTACT: Petroleos de Venezuela, S.A.
         Corporate Public Affairs
         Apartado Postal 169, Caracas 1010-A
         Fax: (58 + 2 12) 708.44.60.


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

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