TCRLA_Public/050404.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

             Monday, April 4, 2005, Vol. 6, Issue 65

                            Headlines

A R G E N T I N A

AUTOMOTRIZ OLAVARRIA: Court Moves Verification Deadline
GOMERIAS MARCOS: Court Deems Bankruptcy Necessary
IMPSAT FIBER: Files Form 10-K for 2004
NEWMAX S.R.L.: Reports Submission Date Set for August
RIVERA INMOBILIARIA: Court Grants Reorganization Plea

ROYAL SHELL: Reports 11.9Bln/boe Oil Reserves in 2004
SCHEIN S.A.: Enters Bankruptcy on Court Orders
SEREM S.A.: Court Appoints Trustee for Reorganization
SHOES S.A.: Begins Liquidation Process
SIMERBET S.R.L.: Asset Liquidation Planned to Pay Debts

SPORT FABRIL S.A.: Court Designates Trustee for Bankruptcy
TGS: Leaves Merval Stock Index
* ARGENTINA: Delays Debt Swap Pending U.S. Court Ruling


B E R M U D A

LORAL SPACE: Discovery Begins in NY Securities Lawsuit Vs. Execs
LORAL SPACE: Discovery Ongoing in NY Securities Lawsuit V. CEO


B O L I V I A

* BOLIVIA: S&P Publishes Ratings Report


B R A Z I L

AES TIETE: Banespa to Sell Stake Via Public Offering
CSN: To Ratify Dividend Distribution on Annual Meeting
ELETROPAULO METROPOLITANA: To Issue BRL1.5 Bln, 2-Yr. Bonds
GERDAU: Board Approves Capital Stock Increase
NET SERVICOS: S&P Raises Local, Foreign Currency Ratings

SKY BRASIL: S&P Withdraws Ratings


J A M A I C A

KAISER ALUMINUM: Losses Deepen in 4Q04


M E X I C O

EMPRESAS ICA: S&P Releases Report on Ratings
GRUPO MEXICO: Minera Mexico Prepays $120M of Syndicated Loan
OPDM: S&P Cuts Ratings on Poor Financial Performance
VITRO: Subsidiary Closes Trade Receivables Securitization
WYNDHAM INTERNATIONAL: Moody's Assigns B3 to Term Loan B


V E N E Z U E L A

CANTV: Board OKs Share Dividend, Issuance of Commercial Paper
PDVSA: Assures Ample Supply for Domestic, International Markets
PDVSA: Strengthens Energy Ties With Spain

     -  -  -  -  -  -  -  -

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

AUTOMOTRIZ OLAVARRIA: Court Moves Verification Deadline
-------------------------------------------------------
Court No. 1 of Olavarria's civil and commercial tribunal reset
key events in the Automotriz Olavarria S.A. reorganization case
to the following dates:

1. Claims Verifications Deadline: April 11, 2005
2. Individual Reports Submission: June 6, 2005
3. General Report Submission: August 2, 2005

All proofs of claims must be submitted to trustee Carlos Daniel
Gandini for verifications by the said deadline.

CONTACT: Automotriz Olavarria S.A.
         Avda Colon 11701/11
         Olavarria

         Mr. Carlos Daniel Gandini, Trustee
         Fassina 3157
         Olavarria


GOMERIAS MARCOS: Court Deems Bankruptcy Necessary
-------------------------------------------------
Gomerias Marcos S.A., which was undergoing reorganization,
entered bankruptcy on orders from Court No. 13 of Mar del
Plata's civil and commercial tribunal. Infobae relates that the
court appointed Mr. Marcelino Alfredo Ovies as trustee on this
case. Mr. Ovies will conduct the credit verification process
"por via incidental."

CONTACT: Gomerias Marcos S.A.
         Colon 3469
         Mar del Plata

         Mr. Marcelino Alfredo Ovies, Trustee
         25 de Mayo 3727
         Mar del Plata


IMPSAT FIBER: Files Form 10-K for 2004
--------------------------------------
Impsat Fiber Networks, Inc. (the "Company"), a leading provider
of integrated broadband data, Internet and voice
telecommunications services in Latin America, has filed its
form-10-K with the Securities and Exchange Commission.

(In the report below, "company," "IMPSAT," "we," "us" and "our"
refer to IMPSAT Fiber Networks, Inc. and its subsidiaries.)

CERTAIN CONSIDERATIONS

In addition to other information in this Report, the following
risk factors should be carefully considered in evaluating IMPSAT
and its business because such factors currently may have a
significant impact on our business, operating results and
financial condition. As a result of the risk factors set forth
below and elsewhere in this Report and the risks discussed in
IMPSAT's other SEC filings, actual results could differ
materially from those projected in any forward-looking
statements.

Risks Related to Our Financial Position and Our Securities

We will need to refinance a significant portion of our
indebtedness

On June 11, 2002, we filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code with the United
States Bankruptcy Court for the Southern District of New York.
On September 4, 2002, we filed our plan of reorganization, which
we refer to as the Plan, with the bankruptcy court. By order
dated December 16, 2002, the bankruptcy court confirmed the
Plan. In accordance to the terms of the Plan, we formally
emerged from bankruptcy on March 25, 2003, which we refer to as
the Effective Date.

Beginning in March 2005, we are required to repay in
installments the principal amount of our restructured senior
debt owed by our subsidiaries to certain of their vendor
financiers who elected to participate in the Plan. In addition,
interest on the guaranteed senior notes issued under the Plan,
which we refer to as the Senior Notes, that was payable in kind
between the Effective Date and March 28, 2005, is required to be
paid in cash commencing in the third quarter of 2005. Our
current projections contemplate that we will be required to
refinance a portion of our indebtedness coming due for repayment
in the next several years because we will not have sufficient
internally-generated funds to do so. Our inability to
successfully refinance such indebtedness as it comes due would
have a material adverse effect on our company and would raise
doubts as to our ability to continue as a going concern for a
reasonable period of time.

A significant portion of the indebtedness coming due in 2005 and
thereafter is held by affiliates of certain members of our board
of directors. Accordingly, a special committee of the Company's
board of directors has been formed to explore recapitalization
alternatives. These alternatives may take the form of a
repurchase, refinancing or rescheduling of the payment terms of
the indebtedness of the Company and/or its operating
subsidiaries, a potential capital infusion, or other types of
transactions. There can be no assurance, however, that any such
transaction will be successfully consummated.

We have a history of incurring losses that may make it difficult
to fund our future operations

We recorded net losses of $154.1 million in 2000, $715.3 million
in 2001 and $204.5 million in 2002. In 2003, we recorded net
income of $740.5 million, which net income was attributable to
the effect of the financial restructuring that resulted from the
consummation of the Plan and related transactions. In 2004, we
recorded a net loss of $14.2 million. Increased competition,
adverse economic conditions in our countries of operation and
other factors have negatively affected our financial condition
and business operations. Our revenues may not be capable of
funding our operations and repaying our indebtedness when due.
We will need to raise additional financing to achieve and
sustain profitability, and to fund our operating requirements.

We continued to be leveraged and our debt service requirements
make us more vulnerable to economic downturns in the markets we
service or in the economy in general

Our current indebtedness restricts our ability to obtain
additional financing and, because we may be more leveraged than
some of our competitors, may place us at a competitive
disadvantage. Also, the indentures and amended financing
agreements that we entered into in connection with our emergence
from bankruptcy contain covenants that impose operating and
financial restrictions on us. These covenants could adversely
affect our ability to finance future operations, potential
acquisitions or capital needs or to engage in other business
activities that may be in our interest. In the fourth quarter of
2004, IMPSAT Brazil failed to comply with certain financial
ratios on its approximately $90.8 million of senior secured
vendor financing indebtedness. Although we obtained a waiver of
the non-compliance for that quarter from the lender, we cannot
guarantee that the lender will grant any required waivers in the
future. If we cannot achieve the financial results necessary to
maintain compliance with these covenants, we could be declared
in default and be required to sell or liquidate our assets to
repay outstanding debt. Our total indebtedness as of December
31, 2004 was $281.1 million.

As a result of the implementation of our plan of reorganization,
we have a significant concentration of holders of our shares of
our common stock

As part of the Plan, certain holders of claims received
distributions of a significant number of shares of our common
stock or of securities convertible into or exercisable for such
common stock. If such holders of significant numbers of shares
of the common stock were to act as a group, such holders would
be in a position to control the outcome of actions requiring
stockholder approval, including the election of directors. The
concentration of ownership could also facilitate or hinder a
negotiated change of control of the company and, consequently,
affect the value of the common stock.

As a result of the implementation of the Plan, our initial board
of directors was nominated by certain initial holders of our
securities. As long as these initial holders continue to hold a
certain percentage of our common stock, common stockholders will
not have the right to elect individuals to our board of
directors.

Further, the possibility that one or more of the holders of
significant numbers of shares of the common stock may determine
to sell all or a large portion of their shares of common stock
in a short period of time may adversely affect the market price
of the common stock.

There is a limited trading market for our common stock

There is currently a limited trading market for our common
stock, which began trading on the Nasdaq OTC Bulletin Board
under the symbol "IMFN" on June 13, 2003. Prior to June 13,
2003, there was no established market for our common stock since
the date of our emergence from bankruptcy. There can be no
assurance that an active trading market for our common stock
will develop or be sustained.

We are restricted in our ability to pay dividends

We do not anticipate paying any dividends on our common stock in
the foreseeable future. In addition, the covenants under the
indentures governing our Senior Notes (and any future financial
facility to which we are a party will also likely) limit the
ability of our company to pay dividends. Certain institutional
investors may only invest in dividend paying securities or may
operate under other restrictions that may prohibit or limit
their ability to invest in our common stock.

Our historical financial information is not comparable to our
current financial condition and results of operations

As a result of emergence from bankruptcy during March 2003, we
have been operating our business with a new capital structure
since April 1, 2003. We were also subject to fresh-start
reporting prescribed by accounting principles generally accepted
in the United States of America, which we refer to as U.S. GAAP.
Accordingly, our financial condition and results of operation
for the periods prior to April 1, 2003 are not comparable to
results of operations reflected in our historical financial
statements, making it difficult to assess our future prospects
based on historical performance.

Risk Related to Our Business

Economic and political conditions in Latin America pose numerous
risks to our operations

Substantially all of our revenues are derived from operations in
Latin America. During 2003 and 2004, approximately 26.6% and
31.6% of our consolidated net revenues were provided by IMPSAT
Argentina, and approximately 24.8% and 24.9% were provided by
IMPSAT Colombia. Our company also has operations in Venezuela,
Brazil, the United States, Ecuador, Chile and Peru. Of these,
Argentina, Brazil, Venezuela, Ecuador and Peru, where we have
significant operations, have experienced political and economic
instability in recent years. Moreover, as events in the Latin
American region have demonstrated, negative economic or
political developments in one country in the region can lead to
or exacerbate economic or political crises elsewhere in the
region. Furthermore, events in recent years in other developing
markets have placed pressures on the stability of the currencies
of a number of countries in Latin America, including Argentina,
Brazil, Colombia and Venezuela. While certain areas in the Latin
American region have experienced economic growth, this recovery
remains fragile. Pressures on the local currencies in the
countries in which we operate are likely to have an adverse
effect on many of our customers, which, in turn, could adversely
affect us. Volatility in regional currencies and capital markets
has also had an adverse effect on our ability and that of our
customers to gain access to international capital markets for
necessary financing and refinancing. A lack of international
capital sources for emerging market borrowers could have a
material adverse effect on us and many of our customers.

Notwithstanding these circumstances, the economic and political
landscapes in Latin America have demonstrated signs of
improvement in recent years. According to published reports,
during 2004 Argentina's gross domestic product (GDP) grew by
8.8% and Brazil's GDP grew by 5.2%. During 2004, Colombia's GDP
grew by 3.74% and Venezuela's GDP increased by 17.3%.

While Argentina appears to be economically recovering it still
faces political and financial instability



A significant portion of our operations, properties and
customers are located in Argentina. Net revenues from our
Argentine operations, acting through IMPSAT Argentina, for each
of 2003 and 2004 represented approximately 26.6% and 31.6% of
our consolidated net revenues during those years. Accordingly,
our financial condition and results of operations depend to a
significant extent on macroeconomic and political conditions
prevailing from time to time in Argentina.

The Argentine economy has experienced significant volatility in
recent decades, including numerous periods of low or negative
growth and high and variable levels of inflation and
devaluation. Since the peak of the most recent economic crisis
during the first half of 2002, Argentina's economy has
experienced positive growth. The gross domestic product
increased during 2003 by 8.4%, and although the value of
Argentina's currency showed volatility compared to the U.S.
dollar, it stabilized in 2004. As further indication of the
improvement, the gross domestic product continued its upward
trend in 2004, increasing by 8.8%. However, there can be no
assurance that the Argentine economy will continue to grow at
current rates, or at all, in the future. If Argentina's economic
growth slows, stops or contracts, there could result a material
adverse effect on IMPSAT Argentina's and our consolidated cash
flows, financial condition and results of operations.

The economic crisis in 2001 and 2002 resulted in the withdrawal
of a significant amount of deposits from the Argentine financial
system in a short period of time. This precipitated a liquidity
crisis, which prompted the Argentine government to impose
exchange controls and transfer restrictions and to require the
conversion of dollar deposits and loans into pesos at asymmetric
rates for depositors and financial institutions. Ultimately,
many financial institutions became insolvent. As a result, the
Argentine Central Bank was forced to provide substantial
financial aid to many banks. Many Argentine financial
institutions remain weakened by the effects of the economic
crisis and the Argentine government's response to it, and
depositors' confidence in the financial system remains fragile.
In addition, during this economic crisis, political and economic
uncertainty and the Argentine government's emergency economic
measures lead to the virtual paralysis of private sector
activity. Since that time many companies have ceased operations
or filed some form of bankruptcy or reorganization proceeding.
The recovery of the private sector is predicated in part on
economic growth and in part on the ability of many private
sector companies to restructure their own defaulted debt
obligations with domestic and international creditors and gain
access to financing. If the private sector fails to recover
fully, Argentina's economic growth could be adversely affected,
which would have a material adverse effect on us and many of our
customers.

In December 2001, Argentina's government declared a "freeze" on
further payments on its outstanding sovereign debt, among other
measures. Since that time, the Argentine government has explored
alternatives to refinance that debt. On September 11, 2003,
Argentina was able to reach an agreement with the International
Monetary Fund (the "IMF") to refinance $31 billion of
indebtedness with the IMF, staged over a three-year period. In
return, Argentina agreed to implement economic reform and to
negotiate with private creditors of over $80 billion of
sovereign indebtedness upon which Argentina had defaulted. Since
then, Argentina has at times engaged in lengthy negotiations
with the IMF and other multilateral institutions and has faced
various suspensions of scheduled disbursements and incurred
payment delays. In August 2004, the IMF announced a delay of its
quarterly review of Argentina's compliance with the conditions
of the September 2003 stand-by agreement in order to further
assess the country's compliance with required structural reforms
and its progress in the renegotiation of utility contracts and
in the debt restructuring process. The Argentine government
subsequently announced that it would postpone further
negotiations with the IMF through December 31, 2004 (and,
consequently, forego additional IMF disbursements totaling $1.8
billion prior to that date), in order to concentrate on the
restructuring of its defaulted debt.

On June 1, 2004, the Argentine government announced a proposal
for the restructuring of Argentina's defaulted external
indebtedness. On December 9, 2004, President Kirchner signed two
decrees officially authorizing a global debt exchange offer to
restructure external indebtedness owed to external private
creditors. In the months following the launch of the Argentine
government's external debt restructuring proposals, the plan was
vigorously rejected by a host of different informal creditor
groups, which lobbied with institutional and individual
investors and international financial agencies for substantial
amendments and sought support from the IMF, among others, for
curtailing further aid to Argentina until desired amendments
were made to the Argentine government's proposal. Despite this
opposition, in February 2005, a large majority of these
creditors agreed to exchange their defaulted debt for new bonds
worth approximately 35 cents on the dollar. As a consequence of
its default on its sovereign debt, Argentina presently lacks
access to financing from private international capital markets
and other private sources. This lack of access to private
financing is expected to continue. Argentina is therefore likely
to depend on the IMF and other multilateral lending as its main
source of foreign capital in the near- to medium-term. As a
consequence, if Argentina fails to meet the performance criteria
under its IMF program or the IMF otherwise decreases its lending
to Argentina, Argentina's limited access to foreign capital
could be curtailed, which could have a material adverse effect
on Argentina's economic prospects. These circumstances could
have a material adverse effect on IMPSAT Argentina's and our
consolidated cash flows, financial condition and results of
operations.

Although the Argentine peso has appreciated, the continued
political and financial instability could adversely affect its
valuation

Following the collapse of Argentina's dollar-peso parity regime
and the implementation of a floating exchange rate system in
early 2002, the peso has fluctuated significantly. After trading
as low as 3.87 pesos to the U.S. dollar in June 2002, it has
generally appreciated against the U.S. dollar since early 2003.
At December 31, 2003, the exchange rate was 2.95 pesos to the
U.S. dollar, and at December 31, 2004, the exchange rate was
2.98 pesos to the U.S. dollar. A devaluation of the Argentine
peso would affect our consolidated financial statements by
generating foreign exchange transaction gains or losses on
dollar-denominated monetary assets and liabilities of IMPSAT
Argentina and generally would result in a decrease, in U.S.
dollar terms, in our revenues, costs and expenses in Argentina.

In February 2002, the Argentine government instituted the
"pesification" decree. Generally, this decree mandates that all
monetary obligations arising from agreements subject to
Argentine law denominated in foreign currency and existing as of
January 6, 2002 are mandatorily converted into monetary
obligations denominated in pesos at an exchange rate of one U.S.
dollar to one peso. Contracts denominated in pesos before the
decree continued to be denominated in pesos, unaffected by the
decree. Currently, a significant number of IMPSAT Argentina's
customer contracts (approximately 56.4% of such contracts) and a
large percentage of its operating cash inflows (approximately
43.6% of such cash flows) are now denominated in pesos. However,
IMPSAT Argentina's debt service payments and a significant
portion of its costs (including capital equipment purchases and
payments for certain leased satellite and terrestrial capacity)
remain denominated and payable in U.S. dollars. Accordingly, our
financial condition and results of operations in Argentina are
dependent upon IMPSAT Argentina's ability to generate sufficient
pesos (in U.S. dollar terms) to pay its costs, expenses and to
satisfy its debt service requirements. New developments which
result in devaluation of the peso against the U.S. dollar could
have a material adverse effect on our consolidated cash flows,
financial condition, and results of operations.

Uncertainties exist surrounding the ultimate resolution of
Argentina's economic and political instability, and actual
results could differ from those estimates and assumptions
utilized. The Argentine economic and political situation
continues to evolve and the Argentine government may enact
future regulations or policies that, when finalized and adopted,
may adversely and materially impact, among other items: (i) the
realized revenues we receive for services offered in Argentina;
(ii) the timing of repatriations of any dividends or other cash
flows from IMPSAT Argentina to our holding company in the United
States; (iii) our asset valuations; and (iv) our peso-
denominated monetary assets and liabilities.

Brazilian economic and political conditions may have a direct
impact on our operations

Brazil, as the largest country and economy in Latin America,
represents a significant existing and potential market for us.
Our company, acting through IMPSAT Brazil, has expanded its
operations in Brazil since that subsidiary's inception in 1998.
Revenues from services from our Brazilian operations for 2003
and 2004 represented approximately 13.8% and 14.7%,
respectively, of our consolidated net revenues for such periods.
For 2004, our operations in Brazil represented the third largest
source of revenues among the eight countries in which we
operate. Accordingly, our operations in Brazil subject our
financial condition and results of operations to various
additional economic and political risks.

Our business, financial condition and result of operations in
Brazil may be adversely affected by changes in policy involving
factors outside of our control, such as monetary and fiscal
policies, currency fluctuations, energy shortages, and, other
political, social and economic developments in or affecting
Brazil.

In early 1999, the Brazilian government allowed the real to
float freely, resulting in a 38% devaluation against the U.S.
dollar from January 14, 1999 through December 31, 2000. From
2000 through 2002, Brazil's currency experienced further
significant devaluations against the U.S. dollar. These had a
negative effect on our real-denominated revenues. In addition,
currency devaluations can also create inflationary pressures.
Inflation itself, as well as some governmental measures to
combat inflation, had significant negative effects on the
Brazilian economy in the past. However, at December 31, 2003 and
2004, Brazil's currency had appreciated against the U.S. dollar
by 18.1% and 8.3%, respectively.

At December 31, 2003, the real traded at a rate of R$3.53 =
$1.00. During 2004, the real appreciated further, trading at a
rate of R$2.65=$1.00 at December 31, 2004. At March 15, 2005,
the real traded at a rate of R$2.76 = $1.00. Brazil's GDP
contracted by around 0.2% during 2003, but increased by 5.2% in
2004, its best performance since 1994. Despite appreciation of
the real against the U.S. dollar during 2004, the stabilization
of inflation, and expansion in the economy, growth slowed in the
fourth quarter of 2004, raising cautions about the economic
rebound's sustainability. Failure to successfully implement
necessary economic reforms and measures to preserve social and
political stability and achieve economic growth in Brazil could
prompt adverse responses from the international capital markets
and investor community and halt or reverse any economic recovery
in that country. The political and economic volatility in Brazil
have had, and can be expected to continue to have, a material
adverse effect on IMPSAT Brazil's and our overall financial
condition and results of operations.

Recent civil and political unrest in Venezuela may have an
adverse impact on our operations

In April 2002, a general strike and violent civil unrest in
Venezuela directed against the policies of that country's head
of state, President Hugo Chavez, forced Mr. Chavez from office.
Less than two days later, strong support from tens of thousands
of pro-Chavez demonstrators led to Mr. Chavez's reinstatement.
In December 2002, opposition groups again launched a nationwide
labor strike. The strike, which lasted for two months, brought
the Venezuelan economy to an almost standstill and severely
curtailed the production and export of oil, the major source of
Venezuela's foreign exchange. In August 2004, opponents of Mr.
Chavez conducted a recall referendum in accordance with the
Venezuelan constitution regarding whether Mr. Chavez should be
allowed to complete his remaining term in office, or be
recalled. Over 59% of those voting in the referendum voted to
retain President Chavez for the remainder of his term ending
2006.

Venezuela's political instability in 2003 caused many private
businesses throughout the country to close temporarily and
disrupted Venezuela's petroleum industry, which provides the
government with more than half its revenue. Gross domestic
product was adversely affected in 2003, with a decrease of 7.7%.
In response, the Venezuelan government imposed foreign exchange
and price controls beginning in February 2003, which make it
difficult for our customers in Venezuela to obtain the U.S.
dollars needed to make payments due to us in U.S. dollars on a
timely basis. These foreign exchange controls also limit our
ability to convert local currency into U.S. dollars and transfer
funds out of Venezuela. At December 31, 2002, the bolivar traded
at a rate of Bs.1,392 = $1.00. On February 6, 2003, the
Venezuelan government set a single fixed exchange rate for the
bolivar against the U.S. dollar of approximately Bs.1,600 =
$1.00 as part of the new currency controls. On February 9, 2004,
the bolivar was further devalued by the government to Bs.1,920 =
$1.00, which remained at December 31, 2004. On March 3, 2005,
the Venezuelan government again devalued its currency by 10.7%,
to Bs. 2,150 = $1.00. A devaluation of the bolivar results in a
loss in U.S. dollar terms on our monetary assets denominated in
bolivars. Continuation or worsening of these volatile political
and economic conditions in Venezuela could materially and
adversely impact our future business, operations, financial
condition and results of operations.

We are vulnerable to currency fluctuations, devaluations and
restrictions that may increase our losses and cause fluctuations
in our operating results

A significant portion of our costs, including lease payments for
certain satellite and fiber optic capacity, purchases of capital
equipment, and payments of interest and principal on our
indebtedness is payable in U.S. dollars. Our results of
operations and financial conditions are therefore vulnerable to
currency devaluations. Following the "pesification" decree, our
contracts that were governed by Argentine law, denominated in
foreign currency and existing as of January 6, 2002 were
mandatorily converted into monetary obligations denominated in
pesos at an exchange rate of one U.S. dollar to one peso,
subject to adjustment pursuant to the Argentine CER consumer
price index. In Brazil, our customer contracts with Brazilian
counterparties cannot be denominated in U.S. dollars or linked
to the exchange rate between the Brazilian real and the U.S.
dollar, although we are permitted to amend the pricing of our
services for our long-term telecommunications service contracts
with our customers annually based on changes in the consumer
price index in Brazil for the prior year. The inflation
adjustment provisions in these laws do not eliminate completely
the currency exchange risk facing our operations in Argentina
and Brazil. For example, contracts entered into between
Argentine parties after the "pesification" decree's enactment
that are initially denominated in pesos may not thereafter be
adjusted according to the CER or any other consumer price index.
Also, changes in the consumer price indices in Argentina and
Brazil may lag or be lower than changes in the exchange rate
between the Argentine and Brazil local currency and the U.S.
dollar and therefore may not fully allow us to address the
impact of a devaluation of those currencies against the U.S.
dollar. Our operations in Argentina and Brazil represented a
significant portion of our consolidated net revenues in 2004.
Accordingly, our operations in Argentina and Brazil have exposed
us, and will increase our exposure, to exchange rate risks.

Except in Argentina and Brazil, the contracts of the Company and
its subsidiaries with customers generally provide for payment in
U.S. dollars or for payment in local currency linked to the
exchange rate between the local currency and the U.S. dollar at
the time of invoicing. Accordingly, inflationary pressures on
local economies in the other countries in which we operate did
not have a material effect on our net revenues during 2004.
However, given that the exchange rate is generally set at the
date of invoicing and that we in some cases experience
substantial delays in collecting receivables, our operations in
those other countries are also exposed to exchange rate risk.

Substantial or continued devaluations in local currencies
relative to the U.S. dollar could have a material adverse effect
on the ability of our customers to absorb the costs of a
devaluation. This could result in our customers seeking to
renegotiate their contracts with us or, failing satisfactory
renegotiation, defaulting on or canceling their contracts. Our
competitors and potential future competitors, including the
monopoly public telephony operators, which we refer to as PTOs,
and large, multinational telecommunications companies, may be
less exposed to currency risk or may be better able to hedge
their currency risk and could thereby gain a relative
competitive advantage in the event of a currency devaluation. In
addition, Latin American economies have experienced shortages in
foreign currency reserves and restrictions on the ability to
expatriate local earnings and convert local currencies into U.S.
dollars. Currency devaluations in one country may have adverse
effects in another country.

Our earnings will deteriorate if we cannot collect on our
customer accounts

As of December 31, 2004, our gross trade accounts receivable
were $41.4 million compared to $51.6 million as of December 31,
2003. We recorded a net reversal of a provision for doubtful
accounts of $3.9 million in 2004 compared to a provision of $2.9
million in 2003. At December 31, 2004, our allowance for
doubtful accounts covered approximately 115% of our gross trade
accounts receivable past due more than six months, compared to
106.3% as of December 31, 2003. As our business increases with
small and medium customers and in relation to any economic
contractions in our principal countries of operation, we may
experience an increase in uncollectable accounts receivable. For
example, we anticipate that we could experience an increase in
our uncollectable accounts receivables in Venezuela because of
the political and financial instability in that country, and the
resultant adverse impact on the creditworthiness and solvency of
our customers there (see "-Economic and political conditions in
Latin America pose numerous risks to our operations").
Difficulties in collecting amounts due from our customers could
have a material adverse effect on our business, results of
operations and financial condition.

We face numerous risks that could adversely affect our Broadband
Network

Operating the Broadband Network may have a negative impact on
our results of operations

Our operation of the Broadband Network, which may include the
expansion into new services for our business customers, could
involve any one or more of the following:

- regulatory risks, including obtaining the appropriate
licenses;
- capital expenditures; and
- competition from large, well-financed international
telecommunications carriers.

Our ability to obtain new capital that we might require in the
future may be negatively affected by many factors beyond our
control

Our future capital requirements will depend upon many factors,
including:

- the cost, timing and extent of upgrading or maintaining our
networks and services;
- our enhancement and development of services, directly or
through our subsidiaries;
- our ability to react to developments in the industry,
including regulatory changes;
- the need to enter into market segments with higher volumes but
lower margins;
- the status of competing services; and
- our results of operations.

Further development of the Broadband Network will require
additional resources that we may not have

We may need to adapt the Broadband Network to respond to:
- requests by our customers for coverage of our Broadband
Network beyond its existing footprint;
- changes in our customers' service requirements; and
- technological advances by our competitors.

We may require additional financial, operational and managerial
resources to expand or adapt the Broadband Network to
accommodate new services and technologies. If we are unable to
expand or adapt the Broadband Network to respond to these
developments on a timely basis, and at a commercially reasonable
cost, our business may be materially adversely affected.

Our failure to acquire, integrate and operate new technologies
could harm our competitive position

The telecommunications industry is characterized by rapid and
significant technological advancements and the introduction of
new products and services. We do not possess significant
intellectual property rights with respect to the technologies we
use and are dependent on third parties for the development of
and access to new technology. In addition, we generally own the
customer premises equipment used to provide our services and we
own the fiber optic networks, including switching equipment,
that constitute the Broadband Network. Therefore, technological
changes that render our equipment and the Broadband Network out
of date, less efficient or more expensive to operate than newer
equipment could require us to incur substantial increases in
capital expenditures to upgrade or replace such equipment.

We cannot predict the effect of technological changes, such as
changes relating to emerging wireline and wireless transmission
technologies and the use of the Internet for traditional voice,
data or other broadband services, on our business. In addition,
it is impossible for us to predict with any certainty which
emergent technology relevant to our business will prove to be
the most economic, efficient or capable of attracting new
customers. A reduction in the demand for data transmission
services or a failure by us to obtain and adapt to new
technology in our markets could have a material adverse effect
on our ability to compete successfully.

We face significant competition in Latin America

The telecommunications industry in Latin America is highly
competitive and is generally characterized by low barriers to
entry. We expect that competition in the industry will maintain
its intensity. We compete on the basis of our experience,
quality, customer service, range of services offered and price.

We have experienced pricing pressure for some of our services,
and we expect to continue to face pricing pressure. We may
further experience declining operating profit margins as the
PTOs in the countries in which we operate become more
competitive and place greater emphasis on data
telecommunications.

PTOs have competitive advantages in the marketplace

In most of our markets, our principal competitor is the local
PTO or an affiliate of the local PTO. The PTOs generally have
significant competitive advantages. These advantages generally
include:

- close ties with national regulatory authorities
- control over connections to local telephone lines
- ability to subsidize competitive services with revenues
generated from services they provide on a monopoly or duopoly
basis
- reluctance of regulators to adopt policies and grant
regulatory approvals that will result in increased competition

For example, Telecom Argentina and Telefonica are the PTOs in
Argentina. In Brazil, our principal competitors are Embratel
(Telmex), Brasil Telecom, Telefonica, and Telemar.

In the future, the PTOs may devote substantially more resources
to the sale, marketing and provision of services that compete
with us, which could have a material adverse effect on our
business, results of operations and financial condition.

International telecommunications carriers have greater resources
than we do

We also compete with operators of satellite data transmission
networks and terrestrial telecommunications links and face
actual or potential competition from large international
telecommunications carriers and from other industry
participants. International telecommunications carriers, whose
principal focus has traditionally been long distance telephony
services, may increasingly focus on the private
telecommunications network systems segment of the
telecommunications market as deregulation continues. Many of
these potential competitors have substantially greater financial
and other resources than we do. In addition, consolidation of
telecommunications companies and the formation of strategic
alliances within the telecommunications industry could give rise
to significant new competitors.

Our competitors could take advantage of new or competing
technologies to our detriment

Although we believe we have the flexibility to act quickly to
take advantage of any significant technological development, new
competing technologies may negatively affect our business. For
example, technologies such as digital subscriber line, or DSL,
significantly enhances the speed of traditional copper lines.
DSL or other technologies enable our PTO competitors to offer
high-speed services without undergoing the expense of replacing
their existing copper networks. Widespread use of DSL in our
markets could materially improve the "last mile" advantage held
by our competitors. Our telecommunications network services also
may face competition from entities that use new or emerging
voice and data transmission services or technologies that
currently are not widely available in Latin America.
Furthermore, competing technologies may gain market and
commercial acceptance. We are limited by our existing cash
resources and our anticipated constraints on availability of
financing from making any significant capital expenditures to
acquire any new technologies. If these developing or new
technologies are successful, they may provide significant long-
term competition that could have a material adverse effect on
our business, results of operations and financial condition.

Downturn in the telecommunications industry could negatively
affect our operations

Regional economic difficulties, which occurred during the last
several years, have had a materially negative impact on the
telecommunications market in Latin America. The rate at which
the industry improves is critical to our ability to improve
overall financial performance. The financial difficulties
experienced by other participants in the telecommunications
industry resulted in some of our competitors purchasing the
assets of these troubled companies. This consolidation, in some
cases, has resulted in multiple smaller competitors being
absorbed into relatively few large entities (with significantly
greater financial and other resources than we have, including
greater access to financing), thereby increasing the operating
profit margin pressures that we face. In particular, Spain's
Telefonica S.A. and Telmex (Telefonos de Mexico S.A. de C.V.)
have significantly expanded their presence and acquisitions in
recent years in the Latin American region. As a result of this
industry consolidation, potential customers and suppliers may
prefer to do business with competitors that have greater
financial and other resources.

We face regulatory risks and uncertainty with respect to local
laws and regulations

Our business is dependent upon the procurement and maintenance
of licenses to provide various telecommunications network
services in the countries in which we operate. We believe that
we have all licenses required for the conduct of our current
operations. We expect that those licenses that are subject to
expiration will be renewed in due course upon our application to
the appropriate authorities. Due to the political and economic
risks associated with the countries in which we operate, we
cannot assure you that we will be able to maintain our licenses
or that they will be renewed upon their expiration. The loss, or
substantial limitation upon the terms, of our licenses could
have a material adverse effect on our results of operations. We
cannot assure you that we will succeed in obtaining all
requisite regulatory approvals to operate in those countries in
which we may desire to do business.

Local laws and regulations differ significantly among the
jurisdictions in which we operate and in which we may operate in
the future. The interpretation and enforcement of these laws and
regulations vary and are often based on the informal views of
the local ministries which, in some cases, might be subject to
influence by the PTOs. The conditions governing our service
offerings may be altered by future legislation or regulation. In
some of our principal existing and target markets, laws and
regulations prohibit or limit our provision of certain
telecommunications services.

We may need to improve the footprint of our metropolitan area
networks

We operate 15 metropolitan area networks in Argentina, Colombia,
Brazil, Venezuela, Ecuador and Peru (see "Item 2-Properties-
Metropolitan Area Networks"). In those countries, the coverage
footprints of our metropolitan area networks are generally
smaller than those of the dominant PTO or incumbent carriers.
Accordingly, in order to maintain or improve our competitive
position in those markets, we might be required to incur capital
expenditures to expand the footprints of our metropolitan area
networks in future periods. There can be no assurance that we
will have the capital resources necessary to make an investment
in any such expansion of our metropolitan area networks.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Overview

Reorganization

As previously disclosed in our filings with the Securities and
Exchange Commission (the "SEC"), we filed a voluntary petition
for relief under Chapter 11 of the United States Bankruptcy Code
with the United States Bankruptcy Court for the Southern
District of New York on June 11, 2002 (the "Bankruptcy Case").
We subsequently filed a plan of reorganization (the "Plan") in
the Bankruptcy Case, which Plan was confirmed in the Bankruptcy
Case and became effective on March 25, 2003 (the "Effective
Date"), at which time we emerged from bankruptcy. Pursuant to
the Plan, we substantially reduced our outstanding debt and
annual interest expense and increased our liquidity. At December
31, 2002, prior to the effectiveness of the Plan, our long-term
debt, including current maturities and estimated liabilities
subject to the Chapter 11 proceeding, aggregated approximately
$1.09 billion. Also at December 31, 2002, our total indebtedness
(including unpaid accrued interest through the petition date
related to the Plan) aggregated $1.04 billion and our cash, cash
equivalents and trading investments totaled $55.6 million. As of
March 31, 2003, upon the effectiveness of the Plan, our total
indebtedness was reduced to approximately $267.5 million, and
our cash, cash equivalents and trading investments totaled
approximately $61.9 million.

Upon our emergence from bankruptcy on March 25, 2003, we adopted
"fresh start" reporting as required by SOP 90-7. Under SOP 90-7
fresh start reporting, a new reporting entity is considered to
be created and the recorded amounts of assets and liabilities
are adjusted to reflect their estimated fair values at the date
fresh start reporting is applied. Among other things, this
required us to allocate the reorganization value of our
reorganized company to its specific tangible and identifiable
assets and liabilities. The effect of the reorganization and the
implementation of SOP 90-7 fresh start reporting on our
consolidated financial statements is discussed in detail in Note
2 to our consolidated financial statements included elsewhere in
this Report. As a result of the implementation of SOP 90-7 fresh
start reporting, the consolidated financial statements of our
company from and after its emergence from bankruptcy are not
comparable to the consolidated financial statements in prior
periods.

Revenues

Our contracts with our customers have in the past typically
ranged in duration from six months to five years and contracts
with our private telecommunications network customers have
generally been three-year contracts. Under the Argentine
"pesification" decree described below under "Currency Risks," if
a contract denominated in pesos is entered into after the
decree's enactment, payments under that contract are not
entitled to be adjusted by any price or related index.
Accordingly, in order to mitigate our inflation risk, our peso-
denominated contracts in Argentina are typically for shorter
terms ranging from three to six months. The customer generally
pays an installation charge at the beginning of the contract and
a monthly fee based on the quantity and type of equipment
installed. Except in Argentina and Brazil, the fees stipulated
in the majority of our contracts with customers are denominated
in U.S. dollar or U.S. dollar equivalents. Services (other than
installation fees) are billed on a monthly, predetermined basis,
which coincide with the rendering of the services. We report our
revenues net of deductions for sales taxes.

We have experienced, and anticipate that we will continue to
experience, downward pressure on our prices as we expand our
customer base, confront growing competition for private
telecommunications network services, and endure the effects of
periodic economic downturns in our countries of operation. When
we have renewed and/or expanded our contracts with existing
customers, the prices we charge have generally declined.

Although we believe that our geographic diversification provides
some protection against economic downturns in any particular
country, our results of operations and business prospects depend
upon the overall financial and economic conditions in Latin
America. Most of the countries in which we operate are
undergoing, or have experienced in recent years, political and
economic volatility. These conditions may have material adverse
effects on our business, results of operation and financial
condition.

Costs and Expenses

Our costs and expenses principally include:

- direct costs
- salaries and wages
- selling, general and administrative expenses
- depreciation and amortization

Our direct costs include payments for leased satellite
transponder, fiber optic and other terrestrial capacity. Our
pan-Latin American Broadband Network, which we began to
commercialize in the fourth quarter of 2000, has enabled us to
decrease our payments for leased satellite capacity as a
percentage of revenue as we have shifted transmission from
leased satellite facilities to our Broadband Network after the
satellite contracts expire. Other principal items composing
direct costs are contracted services costs and allowance for
doubtful accounts. Contracted services costs include costs of
maintenance and installation (and de-installation) services
provided by outside contractors. Installation and de-
installation costs are the costs we incur when we install or
remove earth stations, micro-stations and other equipment from
customer premises. Direct costs also include licenses and other
fees and sales commissions paid to third-party sales
representatives and to our salaried sales force.

Our selling, general and administrative expenses consist
principally of:

- publicity and promotion costs
- fees and other remuneration
- travel and entertainment
- rent
- plant services, insurance and corporate telecommunication and
energy expenses

Currency Risks

Except in Argentina and Brazil, the majority of our contracts
with customers provide for payment in U.S. dollars or for
payment in local currency linked to the exchange rate between
the local currency and the U.S. dollar at the time of invoicing.
Accordingly, inflationary pressures on local economies in the
other countries in which we operate did not have a material
effect on our revenues during 2004. Nevertheless, given that the
exchange rate is generally set at the date of invoicing and that
we in some cases experience substantial delays in collecting
receivables, we are exposed to exchange rate risk, even in
countries other than Argentina and Brazil.

Under applicable law, our contracts with customers in Brazil
cannot, and, under certain circumstances, our contracts with
customers in Argentina may not, be linked to the exchange rate
between the local currency and the U.S. dollar. Accordingly,
operations in Argentina and Brazil increase our exposure to
exchange rate risks. Any devaluation of the Argentine peso or
the Brazilian real against the U.S. dollar will generally affect
our consolidated financial statements by generating foreign
exchange gains or losses on dollar-denominated monetary
liabilities and assets and will generally result in a decrease,
in U.S. dollar terms, in our revenues, costs and expenses.
Because the majority of our debt service payments and a
significant portion of our costs (including capital equipment
purchases and payments for certain leased telecommunications
capacity) remain denominated and payable in U.S. dollars, our
financial condition and results of operations are dependent upon
our subsidiaries' (including IMPSAT Argentina and IMPSAT Brazil)
ability to generate sufficient local currency (in U.S. dollar
terms) to pay their costs and expenses and to satisfy our debt
service requirements.

In U.S. dollar terms, our revenues in Argentina and Brazil,
which are denominated in local currencies and represent a
significant proportion of our consolidated net revenues,
generally increase when the currencies in those countries
appreciate against the U.S. dollar, and decrease when those
currencies depreciate. The following table shows U.S. dollar
exchange rates for the currencies of these countries at the
dates indicated:

   Currency     December 31,   December 31,    December 31,
                    2002            2003            2004
                ------------   ------------    ------------
                      (exchange rate per U.S.$1.00)

Argentina peso   3.40             2.95          2.95
Brazil real       3.53             2.89          2.65

In addition, as a result of foreign currency exchange and
transfer controls established by the Venezuelan government in
February 2003, our contracts with customers in Venezuela are
currently being paid in local currency at the fixed exchange
rate established by the Venezuelan government between the local
currency and the U.S. dollar. As the exchange control
regulations do not permit us to exchange our cash and cash
equivalents in local currency into U.S. dollars without specific
governmental authorizations, the Venezuelan exchange control
regulations have adversely affected our exchange rate risks for
all dollar-denominated liabilities owing by our Venezuelan
operating subsidiary and our ability to receive dividends or
other distributions from that subsidiary. We cannot predict the
duration or other adverse effects that Venezuelan exchange
controls may have on our operating results and financial
condition.

Argentina

In early January 2002, the Argentine government abandoned the
decade-old fixed peso-dollar exchange rate and permitted the
peso to float freely against the U.S. dollar. The peso free
market opened on January 11, 2002 and traded at 1.65 pesos to
the U.S. dollar and traded as low as 3.87 pesos to the U.S.
dollar on June 26, 2002. At both December 31, 2003 and 2004, the
exchange rate was 2.95 pesos to the U.S. Dollar. Currently,
IMPSAT Argentina's customer contracts and operating cash inflows
are now predominantly denominated in pesos.

and traded at 1.65 pesos to the U.S. dollar and traded as low as
3.87 pesos to the U.S. dollar on June 26, 2002. At both December
31, 2003 and 2004, the exchange rate was 2.95 pesos to the U.S.
Dollar. Currently, IMPSAT Argentina's customer contracts and
operating cash inflows are now predominantly denominated in
pesos.

Brazil

At December 31, 2003, the real traded at a rate of R$2.89 =
$1.00, and it appreciated to R$2.65 = $1.00 at December 31,
2004. The daily average exchange rate for the real during 2004
was R$2.92= $1.00, as compared to R$3.06 = $1.00 during 2003.

Venezuela

Widespread discontent with the policies of the current
Venezuelan government produced a country-wide strike in the
beginning of December 2002 that lasted two months and seriously
disrupted economic activity in Venezuela and severely curtailed
the production and export of oil, the major source of
Venezuela's foreign exchange. In response, on February 5, 2003,
the Venezuelan government imposed foreign exchange and price
controls, making it difficult for our customers in that country
to obtain the U.S. dollars needed to make payments due to us in
U.S. dollars on a timely basis. These foreign exchange controls
also severely limit our ability to convert local currency into
U.S. dollars and transfer funds out of Venezuela. At December
31, 2002, the bolivar traded at a rate of Bs.1,392 = $1.00. On
February 6, 2003, the Venezuelan government set a single fixed
exchange rate for the bolivar against the U.S. dollar of
approximately Bs.1,600 = $1.00 as part of the new currency
controls. They further devalued the bolivar to Bs.1,920 = $1.00
on February 9, 2004. As such, on December 31, 2003, the bolivar
traded at a rate of Bs.1,600 = $1.00, and on December 31, 2004,
the bolivar traded at a rate of Bs.1,920 = $1.00. On March 3,
2005, the Venezuelan government again devalued its currency by
10.7%, to Bs. 2,150 = $1.00. A devaluation of the bolivar
results in a loss in U.S. dollar terms on our monetary assets
denominated in bolivars. The effects of the most recent
devaluation will be recorded in our consolidated financial
statements for the first quarter of 2005. We cannot predict the
extent to which we may be affected by future changes in exchange
rates and exchange controls in Venezuela. Future devaluations of
the Venezuelan bolivar and/or the implementation of more
stringent exchange control restrictions in that country could
have a material adverse effect on our financial condition and
results of operations in Venezuela.

Termination of Mexican Operations

During the first quarter of 2003, we determined to close our
operations in Mexico, which we initially established in 1994. We
entered into agreements with various parties to sell our real
estate and other real and personal property, including our
permits and licenses and our contracts with customers. These
transactions closed during 2003. Our results for the years ended
December 31, 2003 and December 31, 2002, accordingly, include
revenues and expenses related to the operations and, for 2003,
the sale of our Mexican operations, and the results for the year
ended December 31, 2004 do not include such revenues or
expenses.

Off-Balance Sheet Arrangements

An off-balance sheet arrangement is any transaction, agreement
or other contractual arrangement involving an unconsolidated
entity under which a company has (1) made guarantees, (2) a
retained or a contingent interest in transferred assets, (3) an
obligation under derivative instruments classified as equity, or
(4) any obligation arising out of a material variable interest
in an unconsolidated entity that provides financing, liquidity,
market risk or credit risk support to the company, or that
engages in leasing, hedging or research and development
arrangements with the company. We have no arrangements of the
types described in any of these four categories that we believe
may have a material current or future effect on our financial
condition, liquidity or results of operations.

Critical Accounting Policies

In the ordinary course of business, the company makes a number
of estimates and assumptions relating to the reporting of
results of operations and financial position in the preparation
of its financial statements in conformity with U.S. GAAP. We use
our best judgment based on our knowledge of existing facts and
circumstances and actions that we may undertake in the future,
as well as the advice of external experts in determining the
estimates that affect our consolidated financial statements.
Actual results could differ significantly from those estimates
under different assumptions and conditions. Our most critical
accounting policies are:

Revenue Recognition

We record revenues from data, value-added, telephony, and
Internet services monthly as the services are provided.
Equipment sales are recorded upon delivery to and acceptance by
the customer.

We have entered into, or may enter into in the future,
agreements with carriers granting indefeasible rights of use
("IRUs") and access to portions of our Broadband Network
capacity and infrastructure. Pursuant to some of these
agreements, we received fixed advance payments for the IRUs,
which would be recognized as revenue over the life of the IRU.
Amounts received in advance would be recorded as deferred
revenue.

Non-Monetary Transactions

We may exchange capacity on our Broadband Network for capacity
from other carriers through the exchange of IRUs. We account for
these transactions as an exchange of similar IRUs at historical
carryover basis with no revenue, gain or loss recognized.

In December 2004, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards
("SFAS") No. 153 ("SFAS No. 153") , Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29. The amendments made
by SFAS No. 153 are based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of
the assets exchanged. The amendment also eliminates the narrow
exception for nonmonetary exchanges of similar productive assets
and replaces it with a broader exception for exchanges of
nonmonetary assets that do not have commercial substance. The
provisions of SFAS No. 153 are effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after June 15,
2005. We do not expect the adoption of SFAS 153 to have a
material impact on our financial condition or results of
operations.

Property, Plant and Equipment

Our business is capital intensive. We record at cost our
telecommunications network assets and other improvements that,
in management's opinion, extend the useful lives of the
underlying assets, and depreciate such assets and improvements
over their estimated useful lives. Our telecommunications
network is highly complex and, due to innovation and
enhancements, certain components of the network may lose their
utility faster than anticipated. We periodically reassess the
economic lives of these components and make adjustments to their
expected lives after considering historical experience and
capacity requirements, consulting with the vendors, and
assessing new product and market demands and other factors. When
these factors indicate that network components may not be useful
for as long as anticipated, we depreciate their remaining book
values over their residual useful lives. The timing and
deployment of new technologies could affect the estimated
remaining useful lives of our telecommunications network assets,
which could have a significant impact on our results of
operations in the future.

Impairment of Long-Lived Assets

We periodically review the carrying amounts of our property,
plant, and equipment to determine whether current events or
circumstances warrant adjustments to the carrying amounts. As
part of this review, we analyze the projected undiscounted cash
flows associated with our property, plant, and equipment.
Considerable management judgment is required in establishing the
assumptions necessary to complete this analysis. Although we
believe these estimates to be reasonable, they could vary
significantly from actual results and our estimates could change
based on market conditions. Variances in results or estimates
could cause changes to the carrying value of our assets
including, but not limited to, recording additional impairment
charges for some of these assets in future periods.

Basis for Translation

We maintain our consolidated accounts in U.S. dollars. The
accounts of our subsidiaries are maintained in the currencies of
the respective countries. The accounts of our subsidiaries are
translated from local currency amounts to U.S. dollars. The
method of translation is determined by the functional currency
of our subsidiaries. A subsidiary's functional currency is
defined as the currency of the primary environment in which a
subsidiary operates and is determined based on management's
judgment. When a subsidiary's accounts are not maintained in the
functional currency, the financial statements must be remeasured
into the functional currency. This involves remeasuring monetary
assets and liabilities using current exchange rates and non-
monetary assets and liabilities using historical exchange rates.
The adjustments generated by re-measurement are included in our
consolidated statements of operations.

When the local currency of a subsidiary is determined to be the
functional currency, the statements are translated into U.S.
dollars using the current exchange rate method. The adjustments
generated by translation using the current exchange rate method
are accumulated in an equity account entitled "Accumulated other
comprehensive income (loss)" within our consolidated balance
sheets.

Tax and Legal Contingencies

We are involved in foreign tax and legal proceedings, claims and
litigation arising in the ordinary course of business. We
periodically assess our liabilities and contingencies in
connection with these matters based upon the latest information
available. For those matters where it is probable that we have
incurred a loss and the loss or range of loss can be reasonably
estimated, we have recorded reserves in our consolidated
financial statements. In other instances, because of the
uncertainties related to both the probable outcome and amount or
range of loss, we are unable to make a reasonable estimate of
any liability. As additional information becomes available, we
adjust our assessment and estimates of such liabilities
accordingly.

In addition, we may be audited by foreign and state (as it
relates to our U.S. operations) tax authorities. We provide
reserves for potential exposures when we consider it probable
that a taxing authority may take a sustainable position on a
matter contrary to our position. We evaluate these reserves,
including interest thereon, on a quarterly basis to ensure that
they have been appropriately adjusted for events that may impact
our ultimate payment for such exposures.

Changes in Policies

These policies, which are those that are most important to the
portrayal of our financial condition and results of operations
and require management's most difficult, subjective and complex
judgments, often are a result of the need to make estimates
about the effect of matters that are inherently uncertain. We
have not made any changes in any of these critical accounting
policies during 2004, nor have we made any material changes in
any of the critical accounting estimates underlying these
accounting policies during 2004.

New Accounting Pronouncements

In January 2003, the FASB issued FASB Interpretation No. 46
("FIN 46"), Consolidation of Variable Interest Entities, an
Interpretation of APB No. 51. FIN 46 requires certain variable
interest entities to be consolidated by the primary beneficiary
of the entity if the equity investors in the entity do not have
the characteristics of a controlling financial interest or do
not have sufficient equity at risk for the entity to finance its
activities without additional subordinated financial support
from other parties. FIN 46 is effective for all new variable
interest entities created or acquired after January 31, 2003.
During October 2003, the FASB deferred the effective date of FIN
46 until the end of the first interim or annual period ending
after December 15, 2003. In addition the FASB issued a revised
interpretation of FIN 46 ("FIN 46-R") in December 2003. The
adoption of FIN 46-R during 2004 did not have a material effect
on the Company's financial condition or results of operations.

In December 2004, the FASB issued SFAS No. 123 (Revised 2004)
("SFAS No. 123(R)"), Share-Based Payment. SFAS No. 123(R)
requires companies to expense the estimated fair value of stock
options and similar equity instruments issued to employees.
Currently, companies are required to calculate the estimated
fair value of these share-based payments and can elect to either
include the estimated cost in earnings or disclose the pro forma
effect in the footnotes to their financial statements. We have
chosen to disclose the pro forma effect. The fair value concepts
were not changed significantly in SFAS No. 123(R); however, in
adopting SFAS No. 123(R), companies must choose among
alternative valuation models and amortization assumptions.

The valuation model and amortization assumption used by us
continues to be available. We have not yet completed our
assessment of the alternatives. SFAS No. 123(R) will be
effective for the Company beginning with the quarter ending
September 30, 2005. Transition options allow companies to choose
whether to adopt prospectively, restate results to the beginning
of the year, or to restate prior periods with the amounts that
have been included in the footnotes. We have not yet concluded
on which transition option we will select. See Note 4 to our
consolidated financial statements for the pro forma effect for
the each of the periods presented, using our existing valuation
and amortization assumptions.

Period Comparisons

As discussed above, under SOP 90-7 fresh starting reporting, our
consolidated financial statements after the Effective Date are
those of a new reporting entity (the Successor Company) and
certain costs are not comparable to those of our company during
pre-Effective Date periods (the Predecessor Company). For
purposes of this discussion, where the year ended December 31,
2004 is compared to the year ended December 31, 2003, where the
results are presented as combined, the latter combines the
three-month period ended March 31, 2003 (for the Predecessor
Company) with the nine-month period beginning April 1, 2003
ending December 31, 2003 (for the Successor Company).
Differences between periods due to fresh start accounting
adjustments are explained when necessary. The lack of
comparability in the accompanying consolidated financial
statements is most apparent in our capital costs (interest
expense and depreciation and amortization), as well as long-term
indebtedness and reorganization items.

Results of Operations

2004 Compared to 2003

Revenues. Our total net revenues for 2003 and 2004 equaled
$220.3 million and $227.7 million, respectively. Net revenues
were composed of net revenues from services and sales of
equipment.

Our net revenues from services for 2004 totaled $226.4 million,
an increase of $7.1 million (or 3.3%) compared to 2003. Our net
revenues from services during 2004 included net revenues from:

- satellite and broadband data transmission services
- Internet, which is composed of our Internet backbone access
and managed modem services
- data center, including hosting, housing and collocation,
services and other value added services, and
- telephony, including local, national and international long-
distance services

The increase in our net revenues from services in the year ended
December 31, 2004, as compared to the year ended December 31,
2003, was due to increases in revenues from Internet, value
added and telephony services.

- Our revenues from broadband and satellite services remained at
approximately the same level as in 2003, as increases in
revenues from broadband and satellite services as a result of
expansion of services and new customers were offset by price
decreases in contractual renewals with existing customers.

- We experienced higher Internet revenues principally because of
new customers and expansion of services to existing customers,
offset partially by pricing pressure resulting from competition.

- Our revenues from value added services increased in 2004
compared to 2003, principally because of revenues from new
customers.

- Our telephony services revenues increased during the year
ended December 31, 2004 as compared to the year ended December
31, 2003 due to (i) our increased delivery during 2004 of
switched voice services to corporate customers in Argentina and
international call terminations to end-user customers in Peru,
partially offset by a decline in traffic volume and services in
the United States; and (ii) the commencement of telephony
services in Brazil to our corporate customers, which we started
in December 2003.

We had 3,314 customers at December 31, 2004, compared to 2,799
customers at December 31, 2003. As we expand, the average size
of customer, including the average revenues per customer, has
decreased. During 2004, we do not believe that we lost any major
customers to our competitors.

During 2004, we gained a net total of 515 customers, an increase
of 18.4% compared to the prior year, due mainly to an increase
in new customers (mostly medium-sized corporations) in
Argentina, Brazil and Peru. In addition to net revenues from
services, our total net revenues for 2004 included revenues from
sales of equipment. Revenues from equipment sales for 2004 were
$1.3 million, as compared to $1.0 million in 2003. Because
equipment sales are ancillary to our core business and are
generally engaged in by our company only on an opportunistic
basis, we are currently unable to predict more than minimal
sales of equipment during 2005.

Argentina is our largest market in terms of number of customers
and in revenues. After three years of adverse economic
conditions that commenced in 1999, in January 2002 the Argentine
Government defaulted on its external debt payments and devalued
its currency, exacerbating declining commercial confidence and
activity and further inflating exorbitant costs of financing for
Argentine companies. The economic downturn in Argentina
adversely affected many of our customers in that country and
caused a number of them to terminate their contracts with us,
fail to renew their contracts, reduce the amount of services
contracted, or delay their payment of amounts owed to us for
services provided. Although Argentina's economy has shown signs
of recovery during 2004, it continues to experience adverse
economic conditions and a lack of access to international
capital markets. We are unable to predict whether the conditions
affecting the Argentine economy will subside or if future
economic developments in Argentina will improve in any
significant respect, and it is possible that the Argentine
economic and political environment could deteriorate. The
political and economic conditions in Argentina, our largest
country of operation, will continue to materially affect our
financial condition and results of operations.

Notwithstanding the economic instability that continues to be
present in Argentina, our net revenues at IMPSAT Argentina
increased during 2004. Our total net revenues at IMPSAT
Argentina for the year ended December 31, 2004 totaled $72.0
million, an increase of $13.4 million (or 22.9%) compared to the
year ended December 31, 2003. Although we anticipate continued
incremental growth in our revenues in Argentina in 2005, any
devaluation of the Argentine peso could adversely affect our
results in that country.

IMPSAT Brazil's total net revenues for 2004 totaled $33.5
million, an increase of $3.0 million (9.8%) compared to 2003. At
December 31, 2003, the real traded at a rate of R$2.89 = $1.00
and it appreciated to R$2.65 = $1.00 at December 31, 2004.
IMPSAT Brazil's operations in 2004 were positively affected by
the improvement of Brazil's economic conditions. The average
daily exchange rate for the real during 2004 was R$2.92 = $1.00,
as compared to the same average in 2003 of R$3.06 = $1.00.
However, future devaluations of the real and a decline in growth
in the Brazilian economy would adversely affect IMPSAT Brazil's
and our company's overall financial condition and results of
operations.

IMPSAT Colombia recorded total net revenues of $56.7 million
during 2004, compared to $54.6 million for 2003. This increase
is mainly attributed to the revaluation of revenues denominated
in Colombian pesos, new customer contracts and expansion of
services (particularly data center and internet) provided to
existing customers.

Total net revenues at IMPSAT Venezuela equaled $33.1 million for
2004, compared to $34.9 million for 2003. Venezuela has
experienced and continues to experience political and economic
uncertainty following the attempted military coup staged against
that country's President Hugo Chavez during the first weeks of
April 2002 and the labor strikes that commenced in December 2002
and ended two months later. In response to this political and
economic turmoil affecting Venezuela, the Venezuelan government
imposed foreign exchange and price controls during February
2003, making it difficult for our customers in that country to
obtain the U.S. dollars needed to make payments due to us in
U.S. dollars on a timely basis. These foreign exchange controls
also limit our ability to convert local currency into U.S.
dollars and transfer funds out of Venezuela and to obtain U.S.
dollars required to purchase needed telecommunications equipment
and repair parts. The continuation or worsening of this crisis
in Venezuela could have a material adverse effect on IMPSAT
Venezuela's results of operations and financial condition.

IMPSAT USA recorded total net revenues of $27.7 million for
2004, compared to $30.4 million for 2003. The difference is
primarily a consequence of early termination charges collected
during 2003, totaling approximately $1.5 million, and a decrease
of $0.9 million in revenues from telephony services.

Direct Costs. Our direct costs for 2004 totaled $110.5 million,
an increase of $2.2 million (or 2.0%), compared to 2003. Of our
total direct costs for 2004, $35.0 million related to the
operations of IMPSAT Argentina, compared to $38.9 million at
IMPSAT Argentina for 2003. Direct costs for IMPSAT Brazil
totaled $17.2 million for 2004, compared to $15.9 million for
2003. Direct costs of our subsidiaries are described prior to
the elimination of inter-company transactions.

  (1) Contracted Services. Contracted services costs include
costs of maintenance and installation (and de-installation)
services provided by outside contractors. During 2004, our
contracted services costs totaled $21.3 million, an increase of
$3.8 million (or 21.6%) compared to 2003. Of this amount,
maintenance costs for our telecommunications network
infrastructure, including the Broadband Network, totaled $13.9
million for 2004 compared to $12.6 million during 2003.
Installation costs totaled $7.4 million for 2004 compared to
$4.9 million in 2003. Of our total contracted services costs for
2004, $7.1 million related to the operations of IMPSAT
Argentina, compared to $5.7 million at IMPSAT Argentina for
2003. Our installation costs increased because we had more new
customers during 2004 compared to 2003.

  (2) Other Direct Costs. Other direct costs principally include
licenses and other fees; sales commissions paid to internal
sales personnel and third-party sales representatives; and our
provision for doubtful accounts. We recorded other direct costs
of $20.6 million, a decrease of $2.4 million (or 10.4%) compared
to 2003.

Sales commissions paid to third-party sales representatives for
2004 totaled $7.8 million compared to $5.7 million in 2003.

We recorded a net reversal of a provision for doubtful accounts
of $3.9 million for 2004, compared to a provision of $2.8
million for the previous year. The net reversal related
principally to our settlement with Global Crossing, announced in
the first quarter of 2004, concerning certain disputes that we
had with that company. We recorded a net reveral of $1.7 million
in connection with the Global Crossing settlement. At December
31, 2004, our allowance for doubtful accounts covered
approximately 115% of our gross trade accounts receivable past
due more than six months compared to 106.3% at December 31,
2003. The average days in quarterly gross trade accounts
receivable decreased from 82 days at December 31, 2003 to 52
days at December 31, 2004. IMPSAT Argentina's allowance for
doubtful accounts at December 31, 2004 covered approximately
102.6% of its gross trade accounts receivable past due more than
six months compared to 100.7% at December 31, 2003. Our net
provision for doubtful accounts was lower in 2004 than in 2003
because of an improvement in our agings.


  (3) Leased Capacity. Our leased capacity costs for 2004
totaled $67.6 million, representing 29.7% of our net revenues,
as compared to $66.9 million, representing 30.4% of our net
revenues, in 2003. The increase in leased capacity costs in 2004
of $0.7 million (or 1.1%) compared to 2003 is attributable to
increased revenues and services.

Our leased capacity costs for satellite capacity for 2004
totaled $23.8 million, a decrease of $3.5 million (or 12.9%)
compared to 2003. In Argentina, our leased satellite capacity
costs totaled $7.3 million for 2004, compared to $7.3 million
for 2003. Our leased satellite capacity costs for IMPSAT Brazil
totaled $2.8 million for 2004, compared to $3.1 million for
2003. The reduction in our leased satellite capacity costs was
principally due to our favorable renegotiation of, and
settlement of disputes relating to, certain of our satellite
capacity agreements. We had approximately 706 MHz of leased
satellite capacity at December 31, 2004 and 735 MHz at December
31, 2003.

Our costs for dedicated leased capacity on third-party fiber
optic networks totaled $29.2 million for 2004, an increase of
$2.6 million (or 9.8%) compared to 2003. These costs were
incurred principally in Argentina, Brazil, Colombia and the
United States. We will continue to require leased capacity to
provide telecommunications services to clients with facilities
outside of the footprint of our Broadband Network in order to
provide end-to-end telecommunications services.

In connection with services we offer under our license in
Argentina to provide domestic and international long distance
telephony connections, we incur costs for interconnection and
telephony termination ("I&T") and frequency rights. Our I&T and
frequency rights costs totaled $14.7 million during 2004 (which
includes $12.1 million of I&T costs). This compares to $13.1
million of I&T and frequency rights costs for 2003 (which
includes $9.7 million of I&T costs).

Our I&T and frequency rights costs in Argentina totaled $7.3
million during 2004 (which includes $7.0 million of I&T costs).
This compares to $6.1 million of I&T and frequency rights costs
for 2003 (which included $5.8 million of I&T costs). The
increase is due primarily to increases in I&T costs
proportionate to increased revenues from telephony services, and
start-up costs related to the launch of telephony services in
Brazil, partially offset by a decrease of $0.7 million in
frequency rights costs in Ecuador.

  (4) Costs of Equipment Sold and Broadband Network Development.
In 2004, we incurred costs of equipment sold of $1.0 million,
compared to costs of equipment sold of $0.9 million for 2003.

Salaries and Wages. Salaries and wages for 2004 totaled $46.3
million, compared to $46.4 million in 2003. As part of our
continuing effort to ensure more efficient operations, we
further reduced the aggregate number of our employees from 1,270
at December 31, 2003 to 1,236 at December 31, 2004. Management
expects to continue to monitor the size of its total workforce
and to make appropriate adjustments as required by financial and
competitive circumstances. The appreciation of the Argentine
peso, Brazilian real, and Colombian peso during 2004 resulted in
higher salary expenses in U.S. dollar terms as compared to 2003,
offset mainly by lower salary expense due to reduced headcount.

IMPSAT Argentina incurred salaries and wages for 2004 totaling
$6.8 million, a decrease of $0.2 million (or 3.4%) over 2003.
IMPSAT Argentina had 302 employees as of December 31, 2004 as
compared to 299 employees as of December 31, 2003.

IMPSAT Brazil incurred salaries and wages for 2004 of $8.6
million, a decrease of $0.1 million (or 1.2%) compared to 2003.
IMPSAT Brazil decreased its number of employees to 197 persons
at December 31, 2004, compared to 214 persons at December 31,
2003.

Selling, General and Administrative Expenses. Our SG&A expenses
consist principally of:

- publicity and promotion costs
- professional fees and other remuneration
- travel and entertainment
- rent
- plant services, insurance and telephone expenses

We incurred SG&A expenses of $23.6 million for 2004,
representing a decrease of $1.8 million (or 7.1%) compared to
2003. Our SG&A expenses for 2004 declined due principally to
decreases in our publicity, promotion costs, utilities and
advisory fees, and overall cost control measures undertaken by
management. SG&A expenses at IMPSAT Argentina for 2004 totaled
$7.4 million, a decrease of $0.8 million (or 9.5%) compared to
2003.

Gain on Extinguishment of Debt. We recorded a gain of $0.1
million during 2004 as a result of the conversion of $0.2
million of our Series A Convertible Notes into 16,100 shares of
our common stock by one noteholder, based upon the fair value of
the common stock at the date of conversion and the carrying
value of the notes so converted. In 2003, we recorded a gain on
extinguishment of debt of $14.3 million, which was attributable
to our settlement in full of certain of our operating subsidiary
vendor financing obligations that were not initially resolved as
part of the Plan.

Depreciation and Amortization. Our depreciation and amortization
expenses for year ended December 31, 2004 totaled $44.8 million,
a decrease of $4.1 million (or 8.4%) compared to depreciation
and amortization for 2003. Depreciation decreased in 2004 due to
the reduction in the company's depreciable fixed asset base in
connection with the reorganization of the Company under the Plan
in 2003 and the application of fresh-start accounting.

Interest Expense, Net. Our net interest expense for the year
ended December 31, 2004 totaled $20.0 million, consisting of
interest expense of $21.1 million and interest income of $1.1
million. Our net interest expense for 2004 increased by $4.9
million (or 32.5 %) compared to the net interest expense for
2003. The increase in interest expense is attributed to
financial expenses related with taxes on banking transactions,
and "payment in kind" accretion to our Senior Notes over a 12-
month period in 2004, as compared to the "payment in kind"
accretion to our Senior Notes over a 9-month period (from March
25, 2003 through December 31, 2003) in 2003. Of our total
interest expense for the year ended December 31, 2004, $13.7
million represents "payment in kind" accretion to our Senior
Notes and certain indebtedness of our subsidiaries.

Our total indebtedness as of December 31, 2004 was $281.1
million, as compared to $261.2 million as of December 31, 2003.

Net Gain on Foreign Exchange. We recorded a total net gain on
foreign exchange for 2004 of $5.8 million, compared to net gain
of $27.5 million for 2003 (Predecessor Company and Successor
Company). The net gain on foreign exchange was primarily due to
the appreciation of the Brazilian real on the book value of our
monetary assets and liabilities in Brazil, offset by net losses
on foreign exchange in Venezuela.

IMPSAT Argentina recorded a net gain on foreign exchange for
2004 of $1.0 million as compared to a net gain on foreign
exchange for 2003 of $1.9 million. IMPSAT Brazil recorded a net
gain on foreign exchange for 2004 totaling $10.6 million,
compared to net gains of $23.4 million for 2003.

During February 2004, the Venezuelan government further devalued
the bolivar and fixed the bolivar's value to the U.S. dollar at
Bs. 1,920.00 = $1.00. On March 3, 2005, the Venezuelan
government again devalued its currency by 10.7%, to Bs. 2,150 =
$1.00. The Company estimates it will realize foreign exchange
losses of $112,000 as a result, which will be reflected in the
results of operations for the first quarter of 2005.

Reorganization Items. We recorded reorganization items for the
three months (Predecessor Company) ended March 31, 2003 of
$726.1 million. These items included a gain on extinguishment of
indebtedness pursuant to the Plan of $728.2 million, reduced by
$2.1 million in reorganization expenses (principally
professional fees incurred during the first quarter 2003 in
connection with the negotiation and formation of our Plan and
Chapter 11 filing). We recorded no reorganization items for
2004.

Other Income (Losses), Net. We recorded other income, net, for
2004 of $0.8 million, as compared to other losses, net, of $1.8
million for 2003.

Provision for Foreign Income Taxes. For 2004, we recorded a
provision for foreign income taxes of $3.5 million, compared to
a provision for foreign income taxes of $1.9 million for 2003.

Net Income (Loss). For the year ended December 31, 2004, we
recorded a net loss of $14.2 million. This compares to net
income of $740.5 million in 2003 (Predecessor and Successor
Company). Our net income for 2003 was principally due to the
effects of the gain on extinguishment of indebtedness pursuant
to the Plan (as discussed above under "-Reorganization Items"),
and our gain on the extinguishment of debt (as discussed above
under "-Gain on Extinguishment of Debt"). For 2004 we recorded
operating income of $2.6 million, compared to operating income
of $5.6 million during 2003 (Predecessor Company and Successor
Company).

2003 Compared to 2002

Revenues. Our total net revenues for 2002 and 2003 equaled
$230.2 million and $220.3 million, respectively. Net revenues
were composed of net revenues from services and sales of
equipment. Our net revenues from services for 2003 totaled
$219.3 million, a decrease of $9.7 million (or 4.3%) compared to
2002.

Our lower total net revenues from services for 2003, as compared
to 2002, were due to lower revenues from broadband and satellite
and Internet services, which were only partially offset by
increases in our revenues from telephony and value added
services. Changes in our revenues during 2003 as compared to
2002 related to the following:

- In connection with our application of fresh start accounting
after the Effective Date, as of April 1, 2003, we no longer
recognized as revenue any amounts of deferred revenue that were
previously claimed on our balance sheet. Of our total recorded
revenues from services for 2002 and the first quarter of 2003,
of $229.0 million and $56.0 million, respectively, $5.0 million
and $1.1 million were represented by the recognition of deferred
revenue; due to the fresh start accounting adjustment, no amount
of deferred revenue was recorded after March 31, 2003.

- In addition to the effect of fresh start accounting on the
recognition of deferred revenues described above, the decrease
in our revenues from broadband and satellite services during
2003 in comparison to 2002 was due to lower satellite-based
services volume and pricing pressures.

- We experienced lower Internet revenues principally because of
(i) pricing pressure (due to competition and adverse economic
conditions) and (ii) technical difficulties that interrupted our
delivery of Internet services in Brazil during 2002 and resulted
in customer losses during 2003.

- Our revenues from value added services increased in U.S.
dollar terms principally because of the appreciation of the
Argentine peso during the 2003 compared to 2002.

- Our telephony services revenues increased during 2003 as
compared to 2002 due to (i) our increased delivery during 2003
of switched voice services to corporate customers in Argentina,
increased traffic at higher rates, and international call
terminations to end-user customers in Peru and (ii) the relative
appreciation of the Argentine peso during 2003 as compared with
2002.

Our net revenues discussed above were also impacted (in U.S.
dollar terms) by the volatile exchange rates of the Argentine
peso and the Brazilian real to the U.S. dollar during 2003. The
exchange rate for the Argentine peso as of December 31, 2003 was
2.95 pesos = $1.00, as compared to 3.40 pesos =$1.00 for the
corresponding period in 2002. As of December 31, 2003, the
exchange rate for the Brazilian real was R$2.89 = $1.00, as
compared to R$3.53 = $1.00 for the corresponding period in 2002.

We had 2,799 customers at December 31, 2003, compared to 2,649
customers at December 31, 2002. During 2003, we gained a net
total of 150 customers, an increase of 5.7% compared to the
prior year.

In addition to net revenues from services, our total net
revenues for 2003 included revenues from sales of equipment.
Revenues from equipment sales for each of 2003 and 2002 totaled
$0.1 million.

Although the Argentine economy grew during 2003 as compared to
2002, IMPSAT Argentina's financial condition and results of
operations were negatively impacted by the political and social
uncertainty and economic weakness that continued to affect
Argentina. The economic downturn in Argentina adversely affected
many of our customers in that country and caused a number of
them to terminate their contracts with us, fail to renew their
contracts, reduce the amount of services contracted, or delay
their payment of amounts owed to us for services provided.
Notwithstanding these economic factors (and largely due to the
average appreciation of the Argentine peso during 2003 compared
to 2002, as discussed above), our net revenues at IMPSAT
Argentina increased during 2003. Our total net revenues at
IMPSAT Argentina as of December 31, 2003 totaled $58.6 million,
an increase of $2.0 million (or 3.6%) compared to 2002.

IMPSAT Brazil's total net revenues from services for 2003
totaled $30.5 million, a decrease of $5.3 million (14.9%)
compared to 2002. Although the Brazilian real appreciated during
2003, IMPSAT Brazil's results for that period were adversely
affected by the ongoing adverse economic conditions in Brazil
and the relative devaluation of the Brazilian real compared to
the average exchange rate during 2002.

IMPSAT Colombia recorded total net revenues of $54.6 million
during 2003, compared to $58.3 million for 2002. Our net
revenues in Colombia were negatively impacted by sustained
adverse economic conditions in that country and increased
competition.

Revenues at IMPSAT Venezuela equaled $34.9 million for 2003,
compared to $31.6 million for 2002.

Direct Costs. Our direct costs for 2003 totaled $108.3 million,
a decrease of $12.1 million (or 10.0%), compared to 2002. Of our
total direct costs for 2003, $38.9 million related to the
operations of IMPSAT Argentina, compared to $42.8 million at
IMPSAT Argentina for 2002. Direct costs for IMPSAT Brazil
totaled $15.9 million for 2003, compared to $21.9 million for
2002. Direct costs of our subsidiaries are described prior to
the elimination of intercompany transactions.

(1) Contracted Services. During 2003, our contracted services
costs totaled $17.5 million, a decrease of $1.7 million (or
8.8%) compared to 2002. Of this amount, maintenance costs for
our telecommunications network infrastructure, including the
Broadband Network, totaled $12.6 million for 2003 compared to
$14.4 million during 2002. Installation costs totaled $4.9
million for 2003 compared to $4.8 million in 2002. Of our total
contracted services costs for 2003, $5.7 million related to the
operations of IMPSAT Argentina, compared to $5.9 million at
IMPSAT Argentina for 2002.

(2) Other Direct Costs. We recorded other direct costs of $23.0
million, a decrease of $2.9 million (or 11.1%) compared to 2002.
Sales commissions paid to third-party sales representatives for
2003 totaled $5.7 million compared to $5.2 million in 2002. We
recorded a provision for doubtful accounts of $2.9 million for
2003, compared to a provision of $13.1 million for the previous
year. At December 31, 2003, our allowance for doubtful accounts
covered approximately 106.3% of our gross trade accounts
receivable past due more than six months. The average days in
quarterly gross trade accounts receivable decreased from 83 days
at December 31, 2002 to 82 days at December 31, 2003. IMPSAT
Argentina's allowance for doubtful accounts at year-end 2003
covered approximately 100.7% of its gross trade accounts
receivable past due more than six months. Our net provision for
doubtful accounts was lower in 2003 than in 2002 because of an
improvement in our agings.

(3) Leased Capacity. Our leased capacity costs for 2003 totaled
$66.9 million, which represented a decrease of $7.8 million (or
10.4%) compared to 2002. This decrease reflected an overall
reduction in costs for interconnection and telephony termination
costs (which are components of our leased capacity costs), as
described below.

Our leased capacity costs for satellite capacity for 2003
totaled $27.3 million, a decrease of $4.8 million (or 15.0%)
compared to 2002. In Argentina, our leased satellite capacity
costs totaled $7.3 million for 2003, compared to $8.1 million
for 2002. Our leased satellite capacity costs for IMPSAT Brazil
totaled $3.1 million for 2003, compared to $4.1 million for
2002. The reduction in our leased satellite capacity costs was
principally due to our favorable renegotiation of, and
settlement of disputes relating to, certain of our satellite
capacity agreements. We had approximately 735 MHz of leased
satellite capacity at December 31, 2003 and 873 MHz at December
31, 2002.

(4) Costs of Equipment Sold. In 2003, we incurred costs of
equipment sold of $0.9 million, compared to costs of equipment
sold of $0.6 million for 2002.

Salaries and Wages. Salaries and wages for 2003 totaled $46.4
million, a decrease of $1.5 million (or 3.2%) compared to 2002.
As a result of the adverse economic conditions experienced in
Argentina, Brazil and elsewhere in Latin America and our efforts
to align our corporate organization to our business projections
over the near and medium term, we reduced the aggregate number
of our employees from 1,271 at December 31, 2002 to 1,270 at
December 31, 2003. The decrease in these costs was also due, in
part, to the effect on such costs of the year over year relative
currency devaluations experienced during 2003 in certain of our
countries of operation.

IMPSAT Argentina incurred salaries and wages for 2003 totaling
$7.0 million, an increase of $1.2 million (or 20.7%) over 2002.
The increase was, in part, related to payments of bonuses to
certain of our executive officers during 2003 pursuant to the
terms of the Plan and their employment contracts with us. We did
not pay any bonuses for 2002. This increase was also partly due
to the appreciation of the peso in the third and fourth quarters
of 2003, which increased the U.S. dollar value of our salaries
and wages expenses incurred in Argentina during 2003. IMPSAT
Argentina had 299 employees as of December 31, 2003 as compared
to 317 employees as of December 31, 2002.

IMPSAT Brazil incurred salaries and wages for 2003 of $8.7
million, a decrease of $2.4 million (or 21.8%) compared to 2002.
IMPSAT Brazil decreased its number of employees to 214 persons
at December 31, 2003, compared to 225 persons at December 31,
2002.

Selling, General and Administrative Expenses. We incurred SG&A
expenses of $25.4 million for 2003, representing a decrease of
$2.8 million (or 10.0%) compared to 2002. Our SG&A expenses for
2003 declined due principally to a decrease in our publicity and
promotion costs, the effects of the relative currency
devaluations of local currencies in Colombia and Venezuela
against the U.S. dollar during 2003, and overall cost control
measures undertaken by management. SG&A expenses at IMPSAT
Argentina for 2003 totaled $3.5 million, a decrease of $0.8
million (or 18.6%) compared to 2002.

Gain on Extinguishment of Debt. We recorded a gain of $14.3
million during 2003, which was attributable to our settlement in
full of certain of our operating subsidiary vendor financing
obligations that were not resolved as part of the Plan. We
recorded a net gain on extinguishment of debt of $16.4 million
in 2002, as a result of a settlement regarding certain vendor
financing obligations of IMPSAT Argentina.

Depreciation and Amortization. Our depreciation and amortization
expenses for the three months (Predecessor Company) ended March
31, 2003 and nine months (Successor Company) ended December 31,
2003 totaled $19.4 million and $29.5 million. Our depreciation
and amortization expenses for 2003 (Predecessor Company and
Successor Company) totaled $48.9 million, a decrease of $33.9
million (or 40.9%) compared to depreciation and amortization for
2002.

Depreciation and amortization expenses for IMPSAT Argentina for
2003 totaled $10.2 million. This represents a decrease of $14.7
million (or 59.0%) compared to IMPSAT Argentina's depreciation
and amortization expenses for 2002. The decrease in depreciation
and amortization was primarily due to the reduction of the
dollar value of our depreciable fixed asset base in connection
with our Chapter 11 reorganization and the application of fresh
start accounting.

Interest Expense, Net. Our net interest expense for the three
months (Predecessor Company) ended March 31, 2003 totaled $1.7
million, consisting of interest expense of $1.9 million and
interest income of $0.2 million. Our net interest expense for
the nine months ended December 31, 2003 (Successor Company) was
$13.4 million, consisting of interest expense of $14.4 million
and interest income of $1.1 million. Our net interest expense
for 2003 (Predecessor Company and Successor Company) totaled
$15.1 million, consisting of interest expense of $16.3 million
and interest income of $1.3 million. Our net interest expense
for 2003 decreased by $58.8 million (or 79.6 %) compared to the
net interest expense for 2002. Our interest expense decreased
principally because of reductions in outstanding indebtedness
and contractual interest following the filing of the Plan and
the restructuring of our indebtedness (particularly our former
12 1/8% Senior Guaranteed Notes due 2003, 13 3/4% Senior Notes
due 2005, and 12 3/8% Senior Notes due 2008) pursuant to the
Plan. Of our total interest expense for the nine months ended
December 31, 2003, $10.0 million represented "payment in kind"
accretion to our Senior Notes and certain indebtedness of our
subsidiaries.

Our total indebtedness as of December 31, 2003 (as Successor
Company) was $261.2 million, as compared to $1.04 billion
(including unpaid accrued interest through the petition date
related to the Plan) as of December 31, 2003 (as Predecessor
Company).

Net (Loss) Gain on Foreign Exchange. We recorded a net gain on
foreign exchange for the three months (Predecessor Company)
ended March 31, 2003 of $10.0 million and a net gain on foreign
exchange for the nine months (Successor Company) ended December
31, 2003 of $17.6 million. We recorded a total net gain on
foreign exchange for 2003 (Predecessor Company and Successor
Company) of $27.5 million, compared to a net loss of $91.9
million for 2002. The net gain on foreign exchange was primarily
due to the appreciation of the Argentine peso and the Brazilian
real on the book value of our monetary assets and liabilities in
Argentina and Brazil.

IMPSAT Argentina recorded a net gain on foreign exchange for
2003 of $1.9 million as compared to a net loss on foreign
exchange for 2002 of $13.9 million. IMPSAT Brazil recorded net
gains on foreign exchange for 2003 totaling $23.4 million,
compared to net losses of $79.5 million for 2002.

Reorganization Items. We recorded reorganization items for the
three months (Predecessor Company) ended March 31, 2003 of
$726.1 million. These items included a gain on extinguishment of
indebtedness pursuant to the Plan of $728.2 million, reduced by
$2.1 million in reorganization expenses (principally
professional fees incurred during the first quarter 2003 in
connection with the negotiation and formation of our Plan and
Chapter 11 filing). We recorded reorganization items for 2002
(Predecessor Company) of $23.3 million in connection with our
Plan and Chapter 11 filing.

Other Losses, Net. We recorded other losses, net, for 2003 of
$1.8 million, as compared to other losses, net, of $5.9 million
for 2002.

Provision for Foreign Income Taxes. For 2003, we recorded a
provision for foreign income taxes of $1.9 million, compared to
a provision for foreign income taxes of $2.3 million for 2002.

Net Income (Loss). For the three months (Predecessor Company)
ended March 31, 2003 we recorded net income of $731.1 million,
and for the nine months (Successor Company) ended December 31,
2003 we recorded net income of $9.5 million. For 2003
(Predecessor Company and Successor Company), we recorded net
income of $740.5 million. This compares to a net loss of $204.5
million in 2002 (Predecessor Company). Our net income for 2003
was principally due to the effects of the gain on extinguishment
of indebtedness pursuant to the Plan (as discussed above under
"-Reorganization Items"), and our gain on the extinguishment of
debt (as discussed above under "-Gain on Extinguishment of
Debt"). For 2003 (Predecessor Company and Successor Company), we
recorded operating income of $5.6 million compared to operating
losses of $32.7 million during 2002 (Predecessor Company).

Liquidity and Capital Resources

At December 31, 2004, we had total cash, cash equivalents and
trading investments of $63.7 million (as compared to $64.0
million as of December 31, 2003).

As of December 31, 2004, approximately $3.6 million of our cash
and cash equivalents were held in Venezuelan bolivars by IMPSAT
Venezuela (based on the official exchange rate at that date of
Bs.1,920 = $1.00). Foreign exchange controls instituted in
Venezuela since February 2003 severely limit our ability to
repatriate these amounts and any other earnings from our
Venezuelan operations. We cannot predict the extent to which we
may be affected by future changes in exchange rates and exchange
controls in Venezuela. Future devaluations of the Venezuelan
bolivar and/or the implementation of stiffer exchange control
restrictions in that country could have a material adverse
effect on our financial condition and results of operations in
Venezuela. See "Quantitative and Qualitative Disclosures About
Market Risk - Foreign Currency Risk."

At December 31, 2004, our total indebtedness was $281.1 million
(as compared to $261.2 million at December 31, 2003), of which
$2.7 million represented short-term debt, $45.1 million
represented current portion of long-term debt and $233.3 million
represented long-term debt. Our capital expenditures budget
contemplates that we will need approximately $32.5 million
(including amounts spent to date) through the end of 2005 for
capital expenditures.

Although we have emerged from bankruptcy, we remain in default
under indebtedness owed to one creditor who voted against the
Plan. Under the Plan, the claims of that creditor were
contingent obligations arising under guarantees by us of certain
primary indebtedness of IMPSAT Argentina. This default, which
relates to indebtedness totaling approximately $7.6 million in
outstanding principal amount, gives the creditor the right to
accelerate such indebtedness and seek immediate repayment of all
outstanding amounts and accrued interest thereon. There is no
assurance that we will be successful in reaching a definitive
agreement with this creditor to reschedule or restructure such
obligations. Under those circumstances, IMPSAT Argentina could
be forced to seek protection or liquidate under the bankruptcy
laws of Argentina.

In the fourth quarter of 2004, IMPSAT Brazil failed to comply
with certain financial ratios on its approximately $90.8 million
of senior secured vendor financing indebtedness. Although we
obtained a waiver of the non-compliance for that quarter from
the lender, we cannot guarantee that the lender will grant any
required waivers in the future.

In 2005, we are required to commence repayment of the principal
amount of the restructured senior debt owed by our subsidiaries
to certain of their vendor financiers who elected to participate
in the Plan, and pay in cash the interest on the Senior Notes,
which was payable in kind between the Effective Date and March
28, 2005. A significant portion of the indebtedness coming due
in 2005 and thereafter is held by affiliates of certain members
of our board of directors. Accordingly, a special committee of
the Company's board of directors has been formed to explore
recapitalization alternatives. These alternatives may take the
form of a repurchase, refinancing or rescheduling of the payment
terms of the indebtedness of the Company and/or its operating
subsidiaries, a potential capital infusion, or other types of
transactions. There can be no assurance, however, that any such
transaction will be successfully negotiated or consummated. Our
inability to successfully refinance our indebtedness as it comes
due would have a material adverse effect on our company and
would raise doubts as to our ability to continue as a going
concern for a reasonable period of time.

As set forth in our consolidated statement of cash flows, our
operating activities provided $35.5 million in net cash flows
for 2004, compared to $30.7 million provided by operating
activities during 2003. The increase in cash flow provided by
operating activities was primarily due to improvement on
accounts receivable collection.

For 2004, our investing activities used $34.3 million in net
cash flows, compared to $6.4 million of net cash flows provided
by investing activities during the corresponding period in 2003.
The increase in net cash flows used in investing activities was
principally due to purchases of property, plant and equipment
needed for the maintenance and expansion of our business. Our
capital expenditures in 2004 represented $ 39.4 million of our
net cash flows compared to $21.5 million in 2003. During 2004,
$2.7 million in net cash flows were provided from financing
activities. This compares to $8.3 million in net cash flows used
in financing activities during 2003. The positive cash flow from
financing activities in 2004 was due to short- and medium-term
financing obtained in excess of the repayment of current lines
at maturity.

At December 31, 2004, we had leased satellite capacity with
annual rental commitments of approximately $12.4 million through
the year 2009 under non-cancelable agreements. The company has
entered into contracts for the purchase of satellite capacity
for approximately $15.0 million through 2015. In addition, at
December 31, 2004, we had commitments to purchase
telecommunications equipment amounting to approximately $6.5
million. Furthermore, we have leased from third parties a series
of terrestrial links for the provision of data, Internet and
telephony services to our clients in the different countries in
which we operate. We have committed to long term contracts for
the purchase of terrestrial links from third parties in
Argentina, Colombia, and the United States for approximately
$4.0 million per year through 2009. The remainder of the leases
are typically under one-year contracts, the early cancellation
of which is subject to a fee.

CONTACT:  IMPSAT FIBER NETWORKS, INC.
          Hector Alonso, Chief Financial Officer
                    or
          Santiago F. Rossi, Investor Relations
          Tel: 54.11.5170.6000
          URL: http://www.impsat.com
                    or
          CITIGATE FINANCIAL INTELLIGENCE
          Robin Weinberg/John McInerney
          201.499.3500


NEWMAX S.R.L.: Reports Submission Date Set for August
-----------------------------------------------------
Ms. Monica Beatriz Cacioli, the trustee assigned to supervise
the liquidation of Newmax S.R.L., will submit the validated
individual claims for court approval on July 5. These reports
explain the basis for the accepted and rejected claims. The
trustee will also submit a general report on August 31.

Infobae reports that Court No. 5 of Buenos Aires' civil and
commercial tribunal has jurisdiction over this bankruptcy case.
Clerk No. 10 assists the court with the proceedings.

CONTACT: Ms. Monica Beatriz Cacioli, Trustee
         Parana 723
         Buenos Aires


RIVERA INMOBILIARIA: Court Grants Reorganization Plea
-----------------------------------------------------
Rivera Inmobiliaria S.A. successfully petitioned for
reorganization after Court No. 9 of Buenos Aires' civil and
commercial tribunal issued a resolution opening the company's
insolvency proceedings.

During insolvency, the company will continue to manage its
assets subject to certain conditions imposed by Argentine law
and the oversight of a court-appointed trustee.

Infobae relates that Mr. Luis Plizzo will serve as trustee
during the course of the reorganization. He will be accepting
creditors' proofs of claims for verification until May 2.

After verifications, the trustee will prepare the individual
reports and submit it in court on June 14. He will also present
a general report for court review on August 10.

The company will endorse the settlement proposal, drafted from
the submitted claims, for approval by the creditors during the
informative assembly scheduled on November 7.

CONTACT: Mr. Luis Plizzo, Trustee
         Avda Roque Saenz Pena 651
         Buenos Aires


ROYAL SHELL: Reports 11.9Bln/boe Oil Reserves in 2004
-----------------------------------------------------
On 30 March 2005 Royal Dutch Petroleum Company and The "Shell"
Transport and Trading Company  (the Registrants) filed the 2004
Annual Report on Form 20-F for the year ended 31 December 2004
with the U.S. Securities and Exchange Commission (SEC). This
document can be downloaded from www.shell.com/20f or
www.sec.gov.

The Royal Dutch/Shell Group of Companies financial statements in
the Annual Report on Form 20-F have been prepared under US
Generally Accepted Accounting Principles (GAAP) and Netherlands
GAAP.

Consistent with the earlier guidance provided on 3 February 2005
on the impact of the reserves restatement on the financial
statements, net income for the year ended 31 December 2004 was
$18.2 billion.  Cash generation, including cash from operations
and divestments, was $33 billion.

The proved reserves base at the end of 2004, including
associates, was 11.9 billion barrels of oil equivalent (boe),
excluding the Athabasca oil sands mining reserves of 0.6 billion
boe. Consistent with earlier guidance, the Reserve Replacement
Ratio (RRR), excluding the impact of divestments and year-end
pricing and including associates, was 49%, within the 45%-55%
range as provided on 3 February 2005.   Including the impact of
divestments and year-end pricing, the RRR was 19%, within the
15-25% range as provided on 3 February 2005.  Including the
Athabasca Oil sands mining reserves would raise the RRR by 4%.
Shell continues to target at least 100% Reserves Replacement
over the period 2004-2008, including associates.

Separately, a schedule of the 2004 financial statements by
quarter, as prepared under US GAAP, has been provided.  This
schedule can be downloaded from www.shell.com/investor under
"Quarterly Results".

With the filing of the 2004 Annual Report on Form 20-F, Shell
remains on schedule with the timetable for the proposals to
shareholders for the unification of the Royal Dutch/Shell Group
of Companies under a single parent company, Royal Dutch Shell
plc.


SCHEIN S.A.: Enters Bankruptcy on Court Orders
----------------------------------------------
Court No. 21 of Buenos Aires' civil and commercial tribunal
declared Schein 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 Manuel Omar Mansanta.

As trustee, Mr. Mansanta is tasked with verifying the
authenticity of claims presented by the company's creditors. The
verification phase is ongoing until May 20.

Following claims verification, the trustee will submit the
individual reports based on the forwarded claims for final
approval by the court on June 30. A general report will also be
submitted on August 1.

Infobae reports that the city's Clerk No. 41 assists the court
on this case. Proceeds from the sale of the Company's assets
will be used to repay its debts.

CONTACT: Schein S.A.
         Avda Rivadavia 6249
         Buenos Aires

         Mr. Manuel Omar Mansanta, Trustee
         Avda Cordoba 1351
         Buenos Aires


SEREM S.A.: Court Appoints Trustee for Reorganization
-----------------------------------------------------
Serem S.A., a company operating in Mar del Plata, is ready to
start its reorganization after Court No. 14 of the city's civil
and commercial tribunal appointed Alfredo Casemayor to supervise
the proceedings as trustee.

Infobae reports that Mr. Casemayor will verify creditors claims
until April 8. Creditors with verified claims will be covered by
the Company's reorganization.

CONTACT: Serem S.A.
         Garay 3136
         Mar del Plata

         Mr. Alfredo Casemayor, Trustee
         25 de Mayo 2980
         Mar del Plata


SHOES S.A.: Begins Liquidation Process
--------------------------------------
Shoes S.A. of Buenos Aires will begin liquidating its assets
after Court No. 5 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 Monica Beatriz Aquim.

Ms. Aquim will review claims forwarded by the company's
creditors until May 16. After claims verification, the trustee
will submit the individual reports for court approval on June
29. The general report submission should follow on August 29.

The city's Clerk No. 9 assists the court on this case.

CONTACT: Ms. Monica Beatriz Aquim, Trustee
         Libertad 257
         Buenos Aires


SIMERBET S.R.L.: Asset Liquidation Planned to Pay Debts
-------------------------------------------------------
Simerbet S.R.L. will begin liquidating its assets following the
bankruptcy pronouncement issued by Court No. 25 of Buenos Aires'
civil and commercial tribunal, says Infobae.

The ruling places the company under the supervision of court-
appointed trustee Jose Luis Carriquiry. The trustee will verify
creditors' proofs of claims until May 2. The validated claims
will be presented in court as individual reports on June 14.

Mr. Carriquiry 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 August 10.

The bankruptcy process will end with the sale of the company's
assets.

CONTACT: Mr. Jose Luis Carriquiry, Trustee
         Loyola 660
         Buenos Aires


SPORT FABRIL S.A.: Court Designates Trustee for Bankruptcy
----------------------------------------------------------
Buenos Aires accountant Jose Luis Carriquiry was assigned
trustee for the liquidation of local company Sport Fabril S.A.,
relates Infobae.

The trustee will verify creditors' claims until May 2, the
source adds. After that, he will prepare individual reports,
which are to be submitted in court on June 14. The general
report submission should follow on August 10.

The city's Court No. 25 holds jurisdiction over the Company's
case. Clerk No. 49 assists the court with the proceedings.

CONTACT: Mr. Jose Luis Carriquiry, Trustee
         Loyola 660
         Buenos Aires


TGS: Leaves Merval Stock Index
------------------------------
Natural gas pipeline operator Transportadora de Gas del Sur
(TGS) has exited Argentina's Merval Index of large-
capitalization stocks, Dow Jones Newswires informs.

Stock exchange officials revise the Merval every quarter, using
calculations based on stocks' market capitalization and trading
volume over the previous period.

TGS, which was the smallest component of the index during the
first quarter, with a 2.04% weighting, had been largely expected
to be cut from the line-up.

TGS' exit leaves Telecom Argentina (TEO) as the only public
utility on the benchmark index. The fixed-line provider's
weighting dropped to 5.4% in the second quarter from 6.2% in the
previous period.

The following is the Merval's line-up for the second quarter in
order of weighting, from largest to smallest:

   Grupo Financiero Galicia (GGAL)
   Petrobras Energia Participaciones (PZE)
   Acindar (ACIN.BA)
   Banco Frances (BFR)
   Banco Macro Bansud (BSUD.BA)
   Tenaris (TS)
   Telecom Argentina (TEO)
   Siderar (ERAR.BA)
   Aluar (ALUA.BA)
   Solvay Indupa (INDU.BA)
   Molinos Rio de la Plata (MOLI.BA)


* ARGENTINA: Delays Debt Swap Pending U.S. Court Ruling
-------------------------------------------------------
Argentina didn't go through the settlement of its US$103 billion
debt restructuring on Friday as originally scheduled.

The government decided to indefinitely postpone the debt swap
until a U.S. appeals court rules on a request by holdouts to
freeze US$7 billion of bad debt tendered in the exchange.

Argentina is confident the court will reverse the freeze and
that the delay will be minimal in issuing US$35.3 billion in new
bonds in exchange for $62.3 billion in old defaulted bonds.



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

LORAL SPACE: Discovery Begins in NY Securities Lawsuit Vs. Execs
----------------------------------------------------------------
Discovery has commenced in the class action filed against two
Loral Space & Communications Ltd. executives in the United
States District Court for the Southern District of New York.

In November 2003, plaintiffs Tony Christ, individually and as
custodian for Brian and Katelyn Christ, Casey Crawford, Thomas
Orndorff and Marvin Rich filed a purported class action
complaint against Bernard Schwartz, the Company's chief
executive officer and chairman of the board of directors and
Richard J. Townsend, the Company's executive vice president.

The complaint alleges:

(1) that defendants violated Section 10(b) of the Exchange Act
and Rule 10b-5 promulgated thereunder, by making material
misstatements or failing to state material facts about the
Company's financial condition relating to the restatement in
2003 of the financial statements for the second and third
quarters of 2002 to correct accounting for certain general and
administrative expenses and the alleged improper accounting for
a satellite transaction with APT Satellite Company Ltd.; and

(2) that each of the defendants are secondarily liable for these
alleged misstatements and omissions under Section 20(a) of the
Exchange Act as an alleged "controlling person" of Loral.

The class of plaintiffs on whose behalf the lawsuit has been
asserted consists of all buyers of Company common stock during
the period from July 31, 2002 through June 29, 2003, excluding
the defendants and certain persons related to or affiliated with
them. In October 2004, a motion to dismiss the complaint in its
entirety was denied by the court. Defendants filed an answer to
the complaint in December 2004.

The suit is styled "Hull v. Schwartz, case no. 1:03-cv-07829-
JES," filed in the United States District Court for the Southern
District of New York, under Judge John E. Sprizzo. Representing
the plaintiffs are:

(1) Lauren D. Antonino, Martin D. Chitwood, Chitwood & Harley,
2300 Promenade II 1230 Peachtree Street, NE Atlanta, GA 30309,
Phone: (404) 873-3900

(2) Christopher Scott Hinton, Frederick Taylor Isquith, Sr.,
Wolf Haldenstein Adler Freeman & Herz LLP 270 Madison Avenue New
York, NY 10017, Phone: (212) 545-4600, E-mail: isquith@whafh.com
(Class Action Reporter, Thursday, March 31, 2005, Vol. 7, Issue
63)

CONTACT: Loral Space & Communications Ltd.
         c/o Loral SpaceCom Corp.
         600 Third Ave.
         New York, NY 10016
         USA
         Phone: 212-697-1105
         Web site: http://www.loral.com


LORAL SPACE: Discovery Ongoing in NY Securities Lawsuit V. CEO
--------------------------------------------------------------
Discovery is ongoing in the class action filed against Loral
Space & Communications, Ltd.'s chief executive officer and
chairman of the board of directors Bernard Schwartz in the
United States District Court for the Southern District of New
York.

In August 2003, plaintiffs Robert Beleson and Harvey Matcovsky
filed the suit, alleging that:

(1) that Mr. Schwartz violated Section 10(b) of the Exchange Act
and Rule 10b-5 promulgated thereunder, by making material
misstatements or failing to state material facts about the
Company's financial condition relating to the sale of assets to
Intelsat and Loral's Chapter 11 filing; and

(2) that Mr. Schwartz is secondarily liable for these alleged
misstatements and omissions under Section 20(a) of the Exchange
Act as an alleged "controlling person" of Loral.

The class of plaintiffs on whose behalf the lawsuit has been
asserted consists of all buyers of Loral common stock during the
period from June 30, 2003 through July 15, 2003, excluding the
defendant and certain persons related to or affiliated with him.

In February 2004, a motion to dismiss the complaint in its
entirety was denied by the court. Defendant filed an answer in
March 2004.

The suit is styled "Beleson, et al. v. Schwartz, case no. 1:03-
cv-06051-JES," filed in the United States District Court for the
Southern District of New York, under Judge John E. Sprizzo.
Representing the plaintiffs are Jules Brody of Stull Stull &
Brody, 6 East 45th Street, 5th Floor, New York, NY 10017, Phone:
(212) 687-7230, Fax: (212) 490-2022; and Joseph H. Weiss, Weiss
& Yourman, The French Building 551 Fifth Avenue 1600 New York,
NY 10176, Phone: (212) 682-3025. Representing Mr. Schwartz are
Jeanne Marie Luboja and Francis James Menton, Jr., Willkie Farr
& Gallagher LLP (NY), 787 Seventh Avenue New York, NY 10019,
Phone: (212) 728-8000 Fax: (212) 728-8111, E-mail:
maosdny@willkie.com (Class Action Reporter, Thursday, March 31,
2005, Vol. 7, Issue 63)



=============
B O L I V I A
=============

* BOLIVIA: S&P Publishes Ratings Report
---------------------------------------

Credit Ratings: B-/Stable/C

Major Rating Factors

Strengths:
    * Strong support from international community.
    * Abundant natural resources-in particular, one of the
largest reserves of gas in the world.
    * Relatively long track record of low inflation.

Weaknesses:
    * Relatively high political instability, characterized by
severe political polarization and a fragmented society.
    * Very limited fiscal flexibility.
    * Commodity-based economy highly dependent on external
conditions.

Rationale

Severe political polarization continues to constrain the
Republic of Bolivia's ability to reach a basic consensus on new
initiatives to enhance governability, restore the country's
fiscal sustainability, and support a medium-term growth
strategy. The attempt to pass a market-friendly hydrocarbon law
has become increasingly controversial. The likelihood of passing
this legislation has declined, as political instability has
continued to increase in recent months. If passed, it would
allow Bolivia to take advantage of its significant reserves of
gas (the second-largest in Latin America) to attract new foreign
direct investment, which would help ease short-term fiscal
restrictions and boost Bolivia's medium-term growth prospects.
As shown in the past, large flows of foreign direct investment
are a precondition for achieving high per-capita growth rates in
Bolivia, which would create the conditions for the
implementation of a successful poverty-reduction strategy.

Bolivia's economic and fiscal performance continues to be
extremely dependent on external factors. Prices of international
commodities-especially agricultural, hydrocarbon, and mining-are
particularly important in supporting the current economic
recovery over the short term. Likewise, Bolivia's medium-term
growth will depend necessarily on foreign direct investment
given the country's relatively low level of domestic saving
(estimated at 14% of GDP for 2005). Fiscally, support from the
donor community (grants accounted for nearly 3% of the GDP over
the last three years) and flexibility from the IMF were, and
will continue to be, key in supporting President Mesa's attempt
to transition from large and unsustainable fiscal imbalances.
Bolivia's public-sector deficit peaked at almost 9% of GDP in
2002, declining later to a still-high deficit estimated in 6.1%
in 2004. Despite political fragility, economic recovery underway
would allow the government to reduce the deficit even further in
2005 to about 5.7% of GDP.

Outlook

The outlook is based on Standard & Poor's Ratings Services
expectation that President Mesa's still-high level of popular
support-combined with the current economic recovery-will
continue to provide enough scope to assure governability despite
increasing levels of demonstrations and political polarization.
At the same time, the persistence of an increasingly weak
political environment will make progress in the reform agenda
difficult. A more severe intensification of the political
problems, a declining level of support from the international
community, or a drastic change in the now-favorable
international conditions that could affect the economic recovery
and fiscal performance will lead to significant pressures on
Bolivia's ability to service its market (domestic) debt and
might trigger a downgrade. On the contrary, increasing levels of
support for the government's agenda will reflect a more
conductive political environment over the short term and enhance
growth potential over the medium term, leading to a potential
upgrade.

Primary Credit Analyst: Sebastian Briozzo, New York (1) 212-438-
7342; sebastian_briozzo@standardandpoors.com



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

AES TIETE: Banespa to Sell Stake Via Public Offering
----------------------------------------------------
Banco do Estado de Sao Paulo SA (Banespa) is getting rid of its
19.5% stake in electric power-generation company AES Tiete SA,
reports Dow Jones Newswires.

The Brazilian unit of Spain's Banco Central Hispano revealed
that it is selling the shares through a secondary offering on
Sao Paulo's Bovespa stock market and also to U.S. investors
under 144a rules.

Banco Santander Brasil and Credit Suisse First Boston will
coordinate the offer.

AES Tiete is controlled by the Brasiliana holding company, which
is a joint venture between U.S.-based AES Corp. (AES) and
Brazil's National Development Bank, or BNDES.


CSN: To Ratify Dividend Distribution on Annual Meeting
------------------------------------------------------
The Shareholders of Companhia Siderurgica Nacional are hereby
called to the Special General Meeting to be held on April 29,
2005, at 11:00 a.m., in the head office of the Company, that
shall be held at the same time of the Annual General Meeting,
originally scheduled on April 4, 2005, which is hereby recalled
to be held at the same day, April 29, 2005, at 10:00 a.m.,
located at Rua Sao Jose 20, Grupo 1602, Centro, Rio de Janeiro -
RJ, to deliberate the following Agenda:

Extraordinary General Meeting

1. Change the Company By-Laws in order to create the Audit
Committee.

Annual General Meeting:

1. examination, discussion and approval of the accounts rendered
by the Company's officers, the management report and the
financial statements, referred to the fiscal year ended on
December 31, 2004;

2. ratification of the distribution of intermediary dividends in
the amount of R$35,000,000.00 approved by the Board of Directors
on June 14, 2004;

3. deliberation on the management proposal regarding the
allocation of the net profit of the fiscal year of 2004, in the
amount of R$2,144,996,655.09, and of the appraisal surplus in
the amount of R$244,846,352.46, as follows:

R$86,798,191.36 of the fiscal year net profit, to complement the
legal reserve balance, pursuant article193 of Law No. 6,404/76;

distribution of R$239,391,000.00 as interest over capital (
juros sobre o capital prąprio ), corresponding to the gross
amount of R$0.86456 per share, and R$2,028,653,816.19 as
dividends, corresponding to the amount of R$7.32649 per share;

4. election of the members of the board of directors;

5. Approval of the global remuneration to the management in the
amount of up to R$ 30,000,000,00.

According to the provisions of Instrucao CVM No. 165, dated
December 11, 1991, as amended by Instrucao CVM No. 282, dated
June 26, 1998, it is necessary at least 5% of the voting capital
of the Company to require the implementation of multiple voting.

The Shareholders whose shares are under custody must present the
documents described in item II of article 126 of Law No.
6,404/76. The Shareholders who will be represented by an
attorney-in-fact must comply with the provisions of paragraph 1
of article 126 of Law No. 6,404/76, and must file the respective
powers of attorney with special powers of representation in the
general meetings mentioned above at the Company's head office at
least three days before the date scheduled for such meetings.

CONTACT: Companhia Siderurgica Nacional-CSN
         Av. Presidente Juscelino Kubitschek 1830
         Torre 1
         13 andar, Itaim Bibi
         Sao Paulo, SP 04543-900
         Brazil
         Web site: http://www.csn.com.br


ELETROPAULO METROPOLITANA: To Issue BRL1.5 Bln, 2-Yr. Bonds
-----------------------------------------------------------
Eletropaulo Metropolitana SA, a unit of AES Corp., filed a
statement with the Sao Paulo stock exchange, revealing its plan
to sell as much as BRL1.5 billion (US$559 million) bonds in the
domestic market.

Citing the filing, Bloomberg reveals that the Company, which
distributes electricity to 16 million people, plans to sell 2-
year bonds.

CONTACT: Eletropaulo Metropolitana Eletricidade de Sao Paulo S/A
         Investor Relations Manager
         Ms. Clarice Silva Assis
         E-mail: clarice.assis@aes.com
         Phone:(55 11) 2195-2229
         Fax:(55 11) 2195-2503


GERDAU: Board Approves Capital Stock Increase
---------------------------------------------
We would like to inform our Shareholders that the Boards of the
companies listed below approved, in meetings held on March 31st,
2005, a capital stock increase, which will be effective on April
11th, 2005 by means of the incorporation of investment reserves
and working capital with the issuance of new shares, as follows:

METALURGICA GERDAU S.A.

Increase in capital stock from R$ 1,664,000,000.00 to R$
2,496,000,000.00 by means of the incorporation of investment
reserves and working capital, with the issuance of new shares,
assigning 50 (fifty) bonus shares to each group of 100 (one
hundred) (one for each two ratio) shares owned on April 11th,
2005, date of record of the incorporation of the above mentioned
reserves. The value assigned to the bonus shares, as defined by
the Brazilian Internal Revenue Secretariat's regulation, IN/SRF
25/2001, Art. 25, paragraph 1, is R$ 20.01 per share.

GERDAU S.A.

Increase in capital stock from R$ 3,471,312,349.01 to R$
5,206,968,523.52 by means of the incorporation of investment
reserves and working capital, with the issuance of new shares,
assigning 50 (fifty) bonus shares to each group of 100 (one
hundred) (one for each two ratio) shares owned on April 11th,
2005, date of record of the incorporation of the above mentioned
reserves. The value assigned to the bonus shares, as defined by
the Brazilian Internal Revenue Secretariat's regulation, IN/SRF
25/2001, Art. 25, paragraph 1, is R$ 11.70 per share.

COMPLEMENTARY INFORMATION

Please note that shares acquired on April 12th, 2005, and
thereafter, will be traded Ex-Stock Dividend.

CONTACT: Shareholders Department
         Av. Farrapos 1811, 90220-005
         Porto Alegre / RS - Brazil
         Phone: +55 (51) 3323-2211
         Fax: +55 (51) 3323-2281
         E-mail: acionistas@gerdau.com.br


NET SERVICOS: S&P Raises Local, Foreign Currency Ratings
--------------------------------------------------------
Standard & Poor's Rating Services raised its issuer global
(foreign and local currency) and national scale ratings on
Brazilian multi-service operator (MSO) NET Servicos de
Comunicacao S.A. (NET) to 'B+' and 'brBBB,' respectively, from
'SD'. The outlook on all ratings is stable.

"The rating action follows the conclusion of the debt
restructuring that the company initiated in 2002," said Standard
& Poor's credit analyst Milena Zaniboni. "As indicated in our
research report published on Oct. 6, 2004, the ratings on NET
would be upgraded if a large majority of creditors accepted to
tender into the new debts, and that the conditions of these
debts remained the same as those the company made public in a
relevant notice dated June 27, 2004."

The ratings on NET reflect its unproven financial flexibility
after a lengthy debt renegotiation, the limited prospects for
Pay-TV and related products in Brazil given the ample reach of
open air TV and income constraints,and the fiercely competitive
environment in both Pay-TV and broadband. These weaknesses are
somewhat offset by NET's relative low leverage after the debt
negotiation, extensive network in major cities, large subscriber
base (37% of market share), and high quality lineup.

The stable outlook on both the global and national scale ratings
reflects our understanding that NET's debt maturity schedule
going forward is compatible with its capacity to generate free
cash flow even when considering modest growth prospects and some
pickup in capital expenditure.

The ratings will come under downward pressure in the unlikely
case that the equity issue is not concluded in the form
presented by NET, or if an aggressive sales strategy leads to
tighter free cash flow in 2005 (we expect at least BrR100
million).

A positive trend for the ratings would depend on the company
actually achieving the projected operating results in 2006/2007
and demonstration of renewed access to bank or capital markets.
We would consider raising the ratings if NET manages to pay down
debt faster than anticipated.


SKY BRASIL: S&P Withdraws Ratings
---------------------------------
Standard & Poor's Rating Services withdrew Thursday its 'B-'
local and foreign currency ratings on Sky Brasil Servicos Ltda.
(Sky).

"The ratings were withdrawn at the request of the company, as
its financial strategy going forward does not anticipate the
need for any public debt issuance," said Standard & Poor's
credit analyst Milena Zaniboni.

The ratings on Sky were originally placed on CreditWatch on Oct.
15, 2004, following the announcement that DIRECTV Group Inc. and
News Corp. (DIRECTV) and Globopar had entered into an agreement
to merge the Latin American operations of DIRECTV and Sky.
Together, DIRECTV and Sky are expected to have approximately 1.2
million subscribers, but the two companies will remain
independent pending regulatory and anti-trust approval.

"The CreditWatch listing reflected our expectations that the
merger, if concluded, would positively affect the results of the
combined operations due to important economies of scale and
stronger bargaining power with suppliers," Ms. Zaniboni said.
"However, the resolution of the CreditWatch with a rating
elevation would depend on the financial profile of the combined
entity and support from DIRECTV to fund the one-time expenses
related to the merger, mostly subscribers' migration to Sky."



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

KAISER ALUMINUM: Losses Deepen in 4Q04
--------------------------------------
Kaiser Aluminum reported Thursday a net loss of $637.5 million,
or $8.01 per share, for the fourth quarter of 2004, compared to
a net loss of $573.2 million, or $7.16 per share, for the fourth
quarter of 2003. For the full year 2004, Kaiser's net loss was
$746.8 million, or $9.36 per share, compared to a net loss of
$788.3 million, or $9.83 per share, for 2003.

The 2004 results include a non-cash pre-tax operating charge of
$793.2 million -- including a fourth-quarter charge of $638.5
million -- nearly all of which is related to resolution of
various matters in the company's Chapter 11 case, specifically
the termination of the company's pension and post-retirement
benefit plans and a related settlement with the United
Steelworkers of America. Results for the 2003 periods also
include special items and charges, as detailed in the
accompanying tables.

Net sales in the fourth quarter and full year of 2004 were
$257.7 million and $942.4 million, compared to $183.3 million
and $710.2 million for the same periods of 2003.

Kaiser President and Chief Executive Officer Jack A. Hockema
said, "Separate and apart from the required non-cash accounting
charges -- nearly all of which are associated with incremental
progress in the resolution of various matters in our Chapter 11
case -- we were pleased with the operating performance of our
fabricated products operations in 2004. In particular, operating
income for this business increased sharply compared to the
operating loss of 2003. The year-over-year improvement was due
primarily to improved demand, which resulted in increases in
shipments and higher average realized prices.

Similarly, the operating results for fabricated products in the
fourth quarter of 2004 improved dramatically from those of the
year-ago quarter. Shipments were especially strong in the fourth
quarter of 2004, particularly for aerospace and automotive
products. The quarter-over-quarter increase in average realized
prices was partially attributable to product mix, with
individual product lines displaying varying levels of recovery
from their recessionary lows of the past several years."

Hockema said, "The Company is making steady progress in
resolving our remaining Chapter 11 issues, and we expect that
Kaiser will emerge from Chapter 11 in the second half of 2005."

About Kaiser Aluminum

Kaiser Aluminum (OTCBB: KLUCQ) is a leading producer of
fabricated aluminum products for aerospace and high-strength,
general engineering, automotive, and custom industrial
applications.

To view financial statements:
http://bankrupt.com/misc/Kaiser.htm

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



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

EMPRESAS ICA: S&P Releases Report on Ratings
--------------------------------------------
Rationale

The ratings on Empresas ICA Sociedad Controladora S.A. de C.V.
(ICA) reflect ICA's tight liquidity and weak financial profile.
The ratings also consider the company's position as the largest
engineering, construction, and procurement concern in Mexico.
The ratings show the expectation that over the next 12 months
ICA's liquidity will remain tight and that corporate debt
payments depend on the company's ability to finish its asset
sale program and financial restructuring. The ratings also
reflect the risk of operating losses and swings in working
capital associated with cost overruns that have hurt the
company's financial performance and liquidity in recent years.
Nevertheless, the improvement in the company's backlog,
particularly its ability to secure works from PEMEX and CFE,
provides evidence of its standing as the leading E&C concern in
Mexico.

ICA's operating and financial performance has improved over the
past months and reflects an increase in revenues of nearly 40%
that has had a positive impact on its key financial ratios.
During 2004, ICA posted EBITDA interest coverage, total
debt/EBITDA, and FFO/total debt ratios of 3.6x, 5.7x, and 10.8%,
respectively, which compare favorably to the 1.4x, 9.3x, and
(1.2%) posted in 2003. Revenues have been driven by the increase
in the company's backlog, which stood at 18 months of
construction equivalent as of Dec. 31, 2004, and the progress of
the El Cajon hydroelectric project, which accounted for 20% of
consolidated revenues in fourth-quarter 2004 and is now 38%
complete. The $694 million contract for the reconfiguration of
PEMEX's Minatitlan refinery was an important addition to the
company's backlog and reflects a more favorable operating
environment for ICA in Mexico. Also, CFE has already recognized
additional costs of $35 million due to the increases in the
price of steel for El Cajon, which greatly reduces the impact of
the increase on ICA's results. Nevertheless, the company
continues its efforts to obtain an additional $15 million from
CFE. ICA has indicated that it has petitioned for the
intervention of Mexico's Comptroller's Office (Secretaria de la
Funcion Publica) to reach a resolution.

Liquidity

ICA's liquidity is tight. The company faces significant
investments in working capital, particularly for El Cajon, that
will lead to a deficit in free operating cash flow that will be
met with additional debt and asset sales. ICA has indicated that
the Minatitlan project will require working capital investments
than are significantly lower that those required by El Cajon,
and this should benefit the company's liquidity. The company has
been able to secure credit for its works in progress; during
fourth-quarter 2004, the company closed working capital loans
for a total of $70 million to finance the construction of four
marine drilling platforms for PEMEX. Nevertheless, corporate
expenses and debt service depend on the successful completion of
the company's asset sale program (which raised $10 million in
the fourth quarter) and the successful restructuring/refinancing
of outstanding $35 million of bank debt. Liquid assets are
scarce, as ICA's unrestricted cash has been depleted by the need
to post cash as collateral to obtain LOCs to support working
capital investments. In addition, the company does not have
corporate credit lines available and practically all of its
assets have been pledged to current debt holders.

Outlook

The negative outlook reflects the expectation that ICA's
liquidity will remain tight over the next 12 months and that
ratings could be lowered if the company's liquidity weakens
further. A positive rating action would need to be preceded by a
significant improvement in liquidity and a sustained improvement
in the company's financial and operating performance.

Primary Credit Analyst: Jose Coballasi, Mexico City
(52)55-5081-4414; jose_coballasi@standardandpoors.com

Secondary Credit Analyst: Santiago Carniado, Mexico City
(52) 55-5081-4413; santiago_carniado@standardandpoors.com


GRUPO MEXICO: Minera Mexico Prepays $120M of Syndicated Loan
------------------------------------------------------------
Grupo Mexico unit Minera Mexico has prepaid US$120 million of a
syndicated loan. In exchange, Minera Mexico obtained a
significant reduction on its interest rate, from LIBOR plus 200
basis points to LIBOR plus 112.5 basis points for the next six
months.

This prepayment was performed with funds resulting from Minera
Mexico's operating activities thus complying with the objective
and commitment of ensuring a solid and efficient financial
structure for the benefit of its shareholders and workers.

After this prepayment, Minera Mexico's total debt is reduced to
approximately 12%, from US$ 1,041.25 million to US$ 921.25
million.

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


OPDM: S&P Cuts Ratings on Poor Financial Performance
----------------------------------------------------
Standard and Poor's (S&P) downgraded the rating of OPDM water
utility, which serves Mexico state's Tlalnepantla municipality,
to mxBB+ from mxBBB with a stable outlook.

The utility's weak financial performance, with operational
losses registered over the last two years, and increased debt
levels prompted the downgrade, said S&P.

Other factors that led to the downgrade include the utility's
low investment levels, inability to establish tariffs and
accounting inconsistencies that limit the credibility of the
utility's financial reports, the ratings agency added.

Meanwhile, Tlalnepantla's solid economic base - the
municipality's GDP per capita is about double that of the
national average - and OPDM's improved bill collection policies
are considered positive.

OPDM serves 720,000 residents in Mexico City's northern
outskirts.


VITRO: Subsidiary Closes Trade Receivables Securitization
---------------------------------------------------------
Vitro, S.A. de C.V. announced that its subsidiary Vitro Envases
Norteamerica, S.A. de C.V. ("VENA"), Vitro's glass containers
division, closed today the issuance of Ps. $550 million in
"Certificados Bursatiles Preferentes", placed through a trust,
such "Certificados BursAtiles Preferentes" will trade on the
"Bolsa Mexicana de Valores" at an interest rate of TIIE ("Tasa
de Interes Interbancaria de Equilibrio") plus 120 basis points.

The trust also issued "Certificados Subordinados" for US$19
million in the United States of America. The trust was
specifically formed for this securitization transaction.
Interest and principal on the debt from both "Certificados" are
payable from receivables to be originated by three subsidiaries
of VENA.

The VENA subsidiaries that will be assigning receivables to the
trust are: Compania Vidriera, S.A. de C.V. ("COVISA"), which
conducts all of VENA's glass container operations in Mexico,
Industria del Alcali, S.A. de C.V. ("Alcali") which is engaged
in the manufacturing and distribution of soda ash, sodium
bicarbonate, calcium chloride and salt, and Comercializadora
Alcali, S. de R.L. de C.V. ("Comercializadora") which markets
Alcali products.

The demand for the preferred financial instruments resulted in a
2.9 times oversubscription, demonstrating the excellent access
that VITRO has in the capital markets in Mexico and abroad. This
transaction allows VENA to reduce its cost of funding, it
increases liquidity and it gives access to a five year committed
line of credit.

VENA will use the proceeds to finance working capital needs and
the transaction will not increase the company's debt.

"This is the first transaction of its type in the Mexican market
and we are very pleased with the positive reaction of the
market. The result has been a very attractive financial
instrument for the market, with the highest ratings and with
good interest rates. I believe that this transaction strengthens
the fine perception that the market has of VITRO and of our
efforts to find innovative and attractive instruments for our
financing operations and for the market", commented Fabrice
Serfati, Finance Manager Vitro.

The transaction received a rating of mxAAA from Standard &
Poor's and of Aaamx from Moody's.

About Vitro

Vitro, through its subsidiary companies, is one of the world's
leading glass producers. Vitro is a major participant in three
principal businesses: flat glass, glass containers and
glassware.

Vitro serves multiple product markets, including construction
and automotive glass; food and beverage, wine, liquor, cosmetics
and pharmaceutical glass containers; glassware for commercial,
industrial and retail uses. Founded in 1909 in Monterrey,
Mexico-based Vitro has joint ventures with major world-class
partners and industry leaders that provide its subsidiaries with
access to international markets, distribution channels and
state-of-the-art technology. Vitro's subsidiaries have
facilities and distribution centers in eight countries, located
in North, Central and South America, and Europe, and export to
more than 70 countries worldwide.

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

         Financial Community:
         Ms. Leticia Vargas/ Mr. Adrian Meouchi
         Vitro, S. A. de C.V.
         Phone: +52 (81) 8863-1210/1350
         E-mail: lvargasv@vitro.com
                 ameouchi@vitro.com

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


WYNDHAM INTERNATIONAL: Moody's Assigns B3 to Term Loan B
--------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Wyndham
International Inc.'s (Wyndham) $530 million senior secured first
lien term loan B, $175 million senior secured first lien
revolving credit facility, and $50 million senior secured first
lien letter of credit revolving credit facility. Moody's also
assigned a Caa1 rating to the company's $140 million senior
secured second lien term loan C, a B3 senior implied rating, Ca
issuer rating, and speculative grade liquidity rating of SGL-3.
The ratings outlook is stable.

The B3 senior implied rating reflects Wyndham's high debt
levels, nominal equity base, and weak credit metrics. In
addition, the B3 rating reflects Moody's view that material debt
reduction over the near term will be challenging, leaving the
company significantly more vulnerable to event risk
(geopolitical or terrorist events) or deterioration in economic
conditions over the intermediate term. However, the ratings also
incorporate the adequate asset value of the properties assigned
as collateral, improved operating performance due in large part
to a relatively strong operating environment within the lodging
industry, and improved debt maturity profile.

Proceeds from the offering will be used to refinance existing
debt at Wyndham and extend maturities. The company will also be
refinancing a 6 asset CMBS facility that comes due in July 2005
and will enter into a new 8 asset CMBS facility, and the
assigned ratings assume the completion of these two financings.
The company will also maintain mortgages on two separate
properties that amounted to approximately $132 million as of
March 2005. In addition, Wyndham will pre-fund approximately
$100 million of capital expenditures to support certain projects
that have been delayed due to various constraints.

Post this transaction, Wyndham will have 33 core owned or leased
properties, 79 Wyndham franchised hotels, and 36 managed hotels
(excluding 2 properties held for sale). In terms of profit
contribution, the 33 owned or leased properties generated over
90% of EBITDA in 2004.

Over the past four years Wyndham has restructured its operations
through significant asset sales, the realization of impairment
charges and asset write downs, and debt reduction. During the
four year period ending December 31, 2004, debt was reduced by
approximately $1.2 billion, while net fixed assets, including
assets held for sale, declined by over $2.3 billion and equity
deteriorated by about $1.7 billion. On March 24, 2005, Wyndham
concluded the sale of 23 of 25 properties that had been held for
sale, to a private investment fund managed by Goldman Sachs and
affiliates of Highgate Holdings. The two remaining properties
are to be sold within the next several months. The CMBS
transactions are expected to be completed by the end of the
second quarter of 2005.

Despite the disposition of under performing or non-core assets,
meaningful debt reduction, and an improving operating
environment in the lodging industry, Wyndham's credit metrics
continue to remain weak. Pro forma for the refinancing, adjusted
leverage (including rent expense) will be very high at over 9.0x
and coverage will be relatively weak at under 1.5x. However,
liquidity should be adequate with balance sheet cash of
approximately $189 million, including $100 million for pre-
funded capex, and full access to its $175 million revolver. In
addition, capital expenditures will be limited by the bank
credit agreement to $150 million in 2005, $100 million in 2006,
and $75 million thereafter. However, 50% of unused amounts can
be carried forward one year, with the exception of 2005 in which
100% of the unused amount can be carried forward to 2006.

The ratings are based on Moody's expectation that the majority
of restructuring initiatives are complete, and management's
focus can be devoted towards managing its core property base and
strengthening its balance sheet. The company also has the
benefit of concluding all of its restructuring initiatives
during a relatively strong operating environment for the lodging
industry that should continue over the intermediate term.

The SGL-3 speculative liquidity rating reflects Moody's view
that over the next twelve months Wyndham will be able to fund
all cash requirements from internal sources. In addition, cash
on the balance sheet, including restricted cash, will be
relatively high given the pre-funding of approximately $100
million of capex. Covenant levels are set relatively high and
Moody's views covenant compliance as likely. The company does
not currently own any assets, outside of what is secured by the
bank facility, the two CMBS deals, two third party mortgages,
and the two remaining properties already committed for sale,
that can be monetized in the near term to satisfy liquidity
needs.

The stable outlook reflects Moody's expectation that operating
performance will continue to improve, driven by RevPAR growth
that is at least in line with the overall lodging industry. If
lodging industry fundamentals remain strong Moody's would expect
a continued focus on debt reduction resulting in leverage
declining to under 8.0x and coverage improving to around 1.6x
over the near term. We also expect liquidity to remain adequate
with full access to the bank revolver and cash on hand. The
stable outlook also expects the company will successfully
complete the 6 asset and 8 asset CMBS facilities as well as the
sale of the two remaining properties held for sale. Factors that
would result in a lower rating would be an inability to reduce
debt to more manageable levels or deterioration in liquidity.
However, if credit metrics continue to improve with leverage
declining towards the 6.0x level, coverage of about 2.0x, and
retained cash flow to total debt (before working capital) of
approximately 10%, while liquidity remains adequate, the ratings
would likely improve.

The B3 rating on the $530 million senior secured first lien term
loan B, $175 million senior secured first lien revolving credit
facility, and $50 million senior secured first lien letter of
credit revolving credit facility, reflects the benefit derived
from a perfected first priority security interest in
substantially all of the tangible and intangible assets of 12
properties and a negative pledge on five properties. The first
lien facilities also benefit from a security interest in all of
the capital stock of Wyndham and each of its direct and indirect
subsidiaries. The Caa1 rating on the senior secured second lien
term loan C facility reflects the same benefits as the first
lien facilities, except for security, in which they have a
secondary claim.

Wyndham International, headquartered in Dallas Texas, owns,
leases, manages, and franchises hotels primarily in the upper-
upscale and luxury segments of the hotel and resorts industry in
North America, Mexico, the Caribbean and Europe.



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

CANTV: Board OKs Share Dividend, Issuance of Commercial Paper
-------------------------------------------------------------
The board of telecommunications company CA Nacional Telefonos de
Venezuela (CANTV) gave the green light to an expected VEB505
($1=VEB2,150) stock dividend during the latest shareholder
meeting, reports Dow Jones Newswires.

In a statement, CANTV said it will disburse the new dividend
payment on April 27 to all shareholders who own shares since
April 20.

At the same time, the board also authorized the issuance of a
US$150-million commercial paper program and another debt program
for the same amount. Details of the said debt plan are yet to be
disclosed.

CANTV, the country's leading telecommunications services
provider with approximately 3.1 million access lines in service,
posted a profit of US$160 million in 2004, up from US$18 million
in 2003.

CONTACT: Gregorio Tomassi, CFA
         CANTV Investor Relations
         Centro Nacional de Telecommunicaciones
         Avenida Libertador
         Caracas, Venezuela
         Phone: 011-58-212-500-1831
         Fax: 011-58-212-500-1828
         E-mail: invest@cantv.com.ve


PDVSA: Assures Ample Supply for Domestic, International Markets
---------------------------------------------------------------
PDVSA Refining Vice-President Alejandro Granado announced
Thursday that, late this morning, a failure in the electrical
system caused an operational shutdown at the Amuay refinery,
thus triggering the immediate activation of the safe plant-
shutdown protocol. This refinery is a major component of the
Paraguana Refining Center (CRP), located in the west area of
Venezuela.

Granado explained that the breakdown was caused by a breakdown
in the supply system to the refinery's steam-generation boilers
in block 29, which resulted in disturbances to the electricity
generation system, thereby affecting industrial services output
(steam, water, nitrogen and electric power) at Amuay and,
consequently, a shutdown in the processing units. This mishap
fortunately caused no damages to personal, installations nor the
environment.

The refinery's General Management immediately activated a Safe
Startup plan together with the CRP Emergency and Contingency
plan. These were implemented by highly trained teams which,
adhering strictly to approved safety and environmental standards
and procedures, proceeded to begin the progressive restoration
of the industrial services and the orderly startup of the
various processing units.

The Refining vice-president stressed that "the continued supply
of fuel to domestic and international markets remains
guaranteed. There are sufficient product inventories in the fuel
distribution systems, as well as in the various refineries,
terminals and storage installations throughout Venezuela. The
volumes available are sufficient to meet commitments to
customers, and shipments are being dispatched normally,
according to schedule. Should it prove necessary, processing
volumes in other facilities of the PDVSA refining system will be
increased to make up for any shortfall".

The Amuay refinery, together with the facilities at Cardon and
Bajo Grande, form part of the Paraguana Refining Center, the
largest oil processing conglomerate in the world. The Cardon and
Bajo Grande installations were not affected, and continue to
operate normally.


PDVSA: Strengthens Energy Ties With Spain
-----------------------------------------
Venezuela and Spain further strengthened their energy ties
through the signing of four agreements covering oil, naval
construction and scientific cooperation, with the aim of
consolidating the economic and social complementation of both
countries, as a part of the agenda for the bilateral meetings
held in Caracas between the President of the Spanish Government,
Jose Luis Rodriguez Zapatero, and the President of the
Bolivarian Republic of Venezuela, Hugo Chavez Frias.

Within this context, Petroleos de Venezuela and REPSOL YPF
signed a memorandum on collaboration and scientific cooperation,
as well as on PDVSA staff training. Both companies also signed a
letter of intent covering the evaluation and migration of
operating agreements to joint companies and the possibility of
granting new licenses for the exploration and production of
natural gas.

Additionally, a cooperation protocol with the objective of
undertaking joint efforts in the marine and naval technological-
industrial areas, was signed by the Minister of Energy and
Petroleum and President of PDVSA, Rafael Ramirez Carreno; the
Defense Minister of Venezuela, Jorge Luis Garcia Carneiro;
Spain's Minister for Foreign Affairs and Cooperation, Miguel
Angel Moratinos and the Spanish Defense Minister, Jose Bono.

Similarly, both governments agreed to set up a strategic
association between Venezuela's Diques y Astilleros Nacionales
(DIANCA) and NAVATIA of Spain, to cooperate on improving the
performance of both shipyards, based on internationally accepted
criteria on safety, reliability and competitiveness.

Minister Ramirez Carreno reiterated "The Ministry of Energy and
Petroleum and the new PDVSA have been adapting their structure
and organization to fully meet the needs of the international
agreements into which we are entering, that are part of the
integration and multi-polarity of the strategic orientation of
our relations".

For his part, REPSOL YPF President Antonio Brufau pointed out
that "these agreements present an opportunity to cooperate more
closely with PDVSA and to adapt ourselves to the new Venezuelan
legislation. All of these agreements are highly beneficial to
our companies and countries".



                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
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Copyright 2005.  All rights reserved.  ISSN 1529-2746.

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to be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 240/629-3300.


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