TCRLA_Public/050524.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Tuesday, May 24, 2005, Vol. 6, Issue 101

                            Headlines


A R G E N T I N A

ARTE GRAFICO: Court Approves Plan, Reorganization Concludes
BANCO GALICIA: Secures $40M Long-Term Loan From IFC
CLAXSON INTERACTIVE: Fitch Reiterates `B(Arg)' Rating on Bonds
EDENOR: Emgasud Presents Offer To Buy Power Utility
GEOMATICA: Court Order Makes Bankruptcy Official

GRACIELITA: Court to Oversee Reorganization
ISMO SALUD: Proceeds With Liquidation
PETROBRAS ENERGIA: Releases April Oil, Gas Production Figures
TONIC: Court Declares Company Bankrupt
TRENES: Court Authorizes Reorganization

YORKVILLE: Initiates Bankruptcy Process on Court's Order
* ARGENTINA: Seeks to Quash ICSID Ruling


B E R M U D A

NORTHERN OFFSHORE: Proposed Plan Gets Unanimous Support


B O L I V I A

AGUAS DEL ILLIMANI: Regulator Moves for Audit, Review


B R A Z I L

ARACRUZ CELULOSE: FC Rating Reflects Sovereign Rating
BRASKEM: S&P Details Improved Liquidity
EMBRATEL: Board to Vote on Capital Increase
PARANAPANEMA: Posts Lower 1Q05 Net Loss on Increased Sales
VARIG: TAP Rules Out Merger


C O L O M B I A

FERROVIAS: Liquidation, Closure Anticipated End of June
TELECOM: Former Clients Granted More Time to Settle Balances


M E X I C O

AHMSA: Gets Wage Agreement With Workers at No. 2 Plant
BALLY TOTAL: Board Member Steps Down to Avoid Potential Conflict
GRUPO MEXICO: SPCC Minority Shareholders Prepare to Sell Stakes
PYCSA: Defends Delays in Construction of Panama Highway


P A N A M A

WILLBROS GROUP: Federman & Sherwood Files Class Action Lawsuit
WILLBROS GROUP: Schiffrin & Barroway Files Class Action Suit


P E R U

BANCO WIESE: Intesa Reaffirms Commitment to Peruvian Unit


P U E R T O   R I C O

R&G FINANCIAL: Moves to Defer Nasdaq Delisting


U R U G U A Y

UAIR: Faces Bankruptcy Threat, Suspends Flights


V E N E Z U E L A

PDVSA: Sets End-June Target for 2003 SEC Report


     - - - - - - - - - -


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

ARTE GRAFICO: Court Approves Plan, Reorganization Concludes
-----------------------------------------------------------
Buenos Aires-based company Arte Grafico S.A. has concluded its
reorganization, according to data released by Infobae on its Web
site. The conclusion came after the city's Court No. 2 of Buenos
Aires' civil and commercial tribunal, with assistance from Clerk
No. 4, made official the debt plan signed between the Company
and its creditors.


BANCO GALICIA: Secures $40M Long-Term Loan From IFC
---------------------------------------------------
The International Finance Corporation, the private sector arm of
the World Bank Group, signed Friday an agreement with Banco de
Galicia y Buenos Aires S.A. in Argentina to provide a $40
million seven-year loan facility. The proceeds will be used by
the bank to on-lend to small and medium enterprises (SMEs) and
mid-sized Argentine corporate borrowers with exporting and other
hard-currency generating capacity. This investment marks IFC's
first direct financing to an Argentine financial institution
since the onset of the Argentine financial crisis.

Banco Galicia is the largest private sector commercial bank in
Argentina in terms of assets ($7.8 billion as of March 31, 2005)
and third in terms of shareholders' equity ($417 million as of
March 31, 2005). In May 2004, Banco Galicia successfully
completed a debt restructuring totaling $1.37 billion, in which
IFC served as chair of the Ad Hoc Steering Committee of Banco
Galicia's unsecured creditors. Building on that important
milestone, the bank has steadily increased its private sector
lending activities while increasing its deposit market share.

Jyrki I. Koskelo, IFC's Global Financial Markets director, said,
"IFC is pleased to support Banco Galicia, as the bank reengages
in providing long-term financing to a core segment of
Argentina's productive base. We expect the Argentine banking
sector to maintain its improving trend, with the continued
support of the Argentine authorities on remaining structural
issues. As Banco Galicia approaches its 100th anniversary, its
strong and resilient franchise and clear vision provide a base
for success in a rapidly changing environment."

Sergio Grinenco, vice chairman of Banco Galcia, acknowledged
IFC's strong support and underscored the opportunity that the
Bank will have, through this facility, to finance export-
oriented projects of small and medium enterprises in Argentina.
"Banco Galicia," he said, "is a leading financial institution in
providing finance to these sectors of the Argentine economy."

Atul Mehta, IFC's director for Latin America, added, "The
reactivation of the private banking sector as a dynamic player
in credit intermediation is crucial to the sustainable recovery
of the Argentine economy. IFC welcomes and supports Banco
Galicia's efforts to make long-term funding more accessible to
viable borrowers in Argentina."

Argentina has steadily regained economic ground. In tandem with
this recovery, the banking sector is now faced with rapidly
increasing credit demand stemming from the sharp growth rates in
exports, the creation and expansion of SMEs, and industrial
output. IFC recognizes Banco Galicia's particular expertise in
funding SME, corporate and agribusiness borrowers.

From the beginning of the financial crisis in Argentina, IFC has
played an essential role supporting its clients in the private
sector. IFC remained engaged in Argentina throughout the crisis,
providing over $300 million in financing from June 2002 to date.


CLAXSON INTERACTIVE: Fitch Reiterates `B(Arg)' Rating on Bonds
--------------------------------------------------------------
Fitch Argentina Calificadora de Riesgo S.A. maintained the
'B(arg)' rating assigned on US$44.4 million worth of
"Obligaciones negociables" bonds issued by Claxson Interactive
Group Inc. The action was based on the Company's financial
status as of December 31, 2004.

Argentina's securities regulator, the Comision Nacional de
Valores noted that the bonds were classified under "Simple
Issue" with undisclosed maturity date.

Fitch said that the `B(arg)' rating indicates significant credit
risk although a limited margin of safety remains. Capacity for
payment at this juncture is dependent on a sustained, favorable
business climate.

CONTACT: Mr. Ezequiel Paz
         Claxson Interactive Group, Inc.
         404 Washington Ave. 8th floor
         Florida, 33139, Miami Beach
         USA
         E-Mail: epaz@claxson.com
         Phone: 305-894-3574
         Web Site: http://www.claxson.com



EDENOR: Emgasud Presents Offer To Buy Power Utility
---------------------------------------------------
Argentine gas pipeline operator Emgasud has made an offer to
acquire a stake in local power distributor Edenor, currently
controlled by Electricite de France (EdF), in partnership with
US-based Latin American Energy Fund (LAEF).

EdF hired JPMorgan to find an investor willing to buy part or
all its 90% interest in Edenor, which serves over 2.2 million
clients in the northern part of capital city Buenos Aires.

Edenor has around US$524 million in debts, 55% of which is in
hands of investments funds.

The other candidates for Edenor are local funds Dolphin and
Pegasus, US-based fund Leucadia and Brazil's GP Investimentos.

The term for submission of bids expired on May 16.

CONTACT:  EDENOR S.A.
          Azopardo Building
          Azopardo 1025 (1107) Capital Federal
          Phone: (54-11) 4346-5000
          Fax: (54-11) 4346-5300
          E-mail: to ofitel@edenor.com.ar
          Web Site: http://www.edenor.com.ar


GEOMATICA: Court Order Makes Bankruptcy Official
------------------------------------------------
Geomatica Argentina S.A. enters bankruptcy protection after
Court No. 15 of Buenos Aires' civil and commercial tribunal,
with the assistance of Clerk No. 29, ordered the Company's
liquidation. The order effectively transfers control of the
Company's assets to a court-appointed trustee who will supervise
the liquidation proceedings.

Infobae reports that the court selected Alberto Jose Rotenberg
as trustee. Rotenberg will be verifying creditors' proofs of
claim until the end of the verification phase on July 7, 2005.

Argentine bankruptcy law requires the trustee to provide the
court with individual reports on the forwarded claims and a
general report containing an audit of the company's accounting
and business records.

CONTACT: Jose Rotenberg, Trustee
         Avda Cordoba 1336
         Buenos Aires


GRACIELITA: Court to Oversee Reorganization
-------------------------------------------
Gracielita S.R.L. begins reorganization proceedings after Court
No. 5 of Mercedes' civil and commercial tribunal granted its
petition for "concurso preventivo," according to Argentine news
source Infobae. During the process, the Company can negotiate a
settlement with its creditors so as to avoid a straight
liquidation.

Creditors with claims against Gracielita S.R.L. must present
proofs of the company's indebtedness to Jorge Omar Vazquez, the
court-appointed trustee, before June 3, 2005. These claims will
constitute the individual reports to be submitted to court on
Aug. 1, 2005. The court also requires the trustee to present an
audit of the Company's accounting and business records through a
general report due on Sep. 19, 2005.

The informative assembly, the last stage of a reorganization
process, will be held on Dec. 16, 2005.

CONTACT: Jorge Omar Vazquez, Trustee
         Calle 22 Nro. 695
         (Edificio Apolo) Mercedes


ISMO SALUD: Proceeds With Liquidation
-------------------------------------
Diagnostico Tesla S.R.L. successfully sought for the bankruptcy
of Ismo Salud S.A. after Court No. 9 of Buenos Aires' civil and
commercial tribunal declared the Company "Quiebra," reports La
Nacion.

As such, the medical services company will now start the process
with Mr. Mario Krasnansky as trustee. Creditors must submit
proofs of their claim to the trustee by August 8 for
authentication. Failure to comply with this requirement will
mean a disqualification from the payments that will be made
after the Company's assets are liquidated.

The city's Clerk No. 17 assists the court on the case that will
close with the sale of all of its assets.

CONTACT: Ismo Salud S.A.
         Escalada 1612
         Buenos Aires

         Ms. Mario Krasnansky, Trustee
         Juan Ramirez de Velazco 813
         Buenos Aires


PETROBRAS ENERGIA: Releases April Oil, Gas Production Figures
-------------------------------------------------------------
Petrobras Energia Participaciones S.A. (Buenos Aires: PBE,
NYSE:PZE), controlling company of Petrobras Energia S.A. (Buenos
Aires: PESA), announces Petrobras Energia S.A.'s oil and gas
daily average production for April 2005.

For comparative purposes production for 2004 fiscal year
includes Petrolera Santa Fe's and Petrobras Argentina's
production.

For conversion into barrels of oil equivalent, gas production is
expressed at 9,300 kilocalories.

Production from bock 18 in Ecuador is reported on a 70%
interest.

Produccion Total de Petroleo y Gas (*)
(miles de barriles de petroleo equivalente diarios)

                                     Abr-05             Abr-04

- Petroleo Argentina                  53.8               63.9
- Petroleo Venezuela                  43.6               48.3
- Petroleo Peru                       12.4               11.1
- Petroleo Bolivia                     1.3                1.8
- Petroleo Ecuador                     7.8                6.3
Total Produccion de Petroleo         118.9              131.4
- Gas Argentina                       40.5               45.3
- Gas Venezuela                        3.4                4.5
- Gas Peru                             1.0                1.3
- Gas Bolivia                          6.2                6.5
Total Produccion de Gas               51.1               57.6
Total Produccion de Petroleo y Gas   170.0              189.0

CONTACT: Petrobras Energia Participaciones S.A.
         Edificio Perez Companc
         Maipu 1
         Buenos Aires, C 1084 ABA
         Argentina
         Phone: 54-11-4344-6000
         Website: http://www.petrobrasenergia.com


TONIC: Court Declares Company Bankrupt
--------------------------------------
Tonic S.A. entered bankruptcy on orders from Court No. 15 of the
Buenos Aires' civil and commercial tribunal, reveals Infobae.
Working with Clerk No. 29, the court assigned Hector Julio
Grisolia as trustee. He is to verify creditors' claims until
Aug. 4, 2005.

Creditors who fail to have their claims validated before the
deadline will be disqualified from receiving any payments to be
made after the Company's assets are liquidated.

Trustee Grisolia will prepare the individual reports upon
completion of the verification process. The court also requires
the receiver to prepare a general report. This report contains a
summary of the results in the individual reports.

CONTACT: Hector Julio Grisolia, Tustee
         Jeronimo Salguero 2533
         Buenos Aires


TRENES: Court Authorizes Reorganization
---------------------------------------
Court No. 9 of Buenos Aires' civil and commercial tribunal
authorized Trenes de Buenos Aires S.A. to start its
reorganization process. According to Infobae, the court, which
is assisted by Clerk No. 18, granted the Company's "Concurso
Preventivo" motion, appointing Estudio Waisberg-Knoll; Estudio
Roggiano y Asociados y Estudio Bosnic Lopez y Feltrin y Asocia
as trustees.

Creditors have until Sep. 6, 2005 to submit their proofs of
claim to the trustees, who will verify these claims and submit
them to court as individual reports on Nov. 29, 2005. After
these reports are processed in court, the receiver will then
prepare the general report and submit it to court on March 10,
2006.

The informative assembly, the last stage of a reorganization
process, will be held on Oct. 18, 2006.

CONTACT: TRUSTEE
         Estudio Waisberg-Knoll
         Estudio Roggiano y Asociados
         Estudio Bosnic Lopez
         Feltrin y Asocia
         Suipacha 472
         Buenos Aires


YORKVILLE: Initiates Bankruptcy Process on Court's Order
--------------------------------------------------------
Yorkville S.A. entered bankruptcy after Court No. 15 of Buenos
Aires' civil and commercial tribunal ruled that it is "Quiebra."
Infobae reveals that the city's Clerk No. 29 aids the court on
the process.

The court appointed Carlos Manuel Carrescia as trustee.
Creditors must submit their proofs of claim to the receiver for
verification before July 28, 2005. The receiver is also required
to prepare the individual and general reports on the bankruptcy
process.

CONTACT: Manuel Carrescia, Trustee
         Tucuman 1621
         Buenos Aires


* ARGENTINA: Seeks to Quash ICSID Ruling
----------------------------------------
The Argentine government is not giving up easily on its fight
against US energy company CMS Gas Transmission (NYSE: CMS) in
the World Bank's International Center for the Settlement of
Investment Disputes (ICSID) tribunal, reports Business News
Americas.

Economy minister Roberto Lavagna was cited by local press as
saying that the government would seek to annul the ICSID ruling
that ordered it to pay US$133 million in compensation to CMS
Energy on the grounds that it does not reflect the terms of
international trade treaties Argentina has signed.

However, CMS said in a statement that ICSID has considered and
rejected Argentina's claims, finding that "Argentina's
constitution expressly mandates the recognition of international
treaty obligations and compliance with those obligations."

The ICSID ruling furthermore "examined Argentina's claim that
its actions were justified by an economic emergency and
concluded that did not excuse Argentina from liability," CMS
said.



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

NORTHERN OFFSHORE: Proposed Plan Gets Unanimous Support
-------------------------------------------------------
The joint provisional liquidators (the JPLs) of Northern
Offshore Limited (NOL or the Company) announced that at the
meetings of Scheme Creditors which were held on May 20, 2005 at
the offices of KPMG Financial Advisory Services Limited in
Bermuda, the results of the voting on the Scheme of Arrangement
(the Scheme) were as follows:

- 100% of US$ Notes by value and in number, who voted, supported
the Scheme; and
- 100% of NOK Bonds by value and in number supported the Scheme.

In excess of 95% of total note holders eligible to vote actually
voted with unanimous support for the Scheme.

Accordingly, based on the above voting, the requisite voting
majorities in favor of the Scheme have been received.

Under the terms of the proposed Scheme, the bondholders of NOL
will receive a total of 98% of the equity of the Company in
exchange for the cancellation of the debt.  The balance of 2% of
the equity will remain with the existing shareholders.

There are certain steps that need to be taken before the Scheme
becomes effective.  The JPLs anticipate that these steps should
be completed in the next 10 days at which time the JPLs will be
discharged and released and the winding up petition will be
withdrawn.  From the effective date of the Scheme the Company
will operate under the control of its Board of Directors.

Mike Morrison of KPMG Financial Advisory Services Limited, one
of the JPLs commented: "The JPLs have worked closely with the
various stakeholders of the Company and in particular the Ad Hoc
Bondholders' Committee and their advisors, over the past 10
months and are delighted that such a significant proportion of
the bondholders have unanimously supported the Scheme.  The JPLs
will make a further announcement when the Scheme becomes
effective."

The JPLs can be contacted through Adrian Bourne, KPMG in London
(+ 44 (0) 207 694 3018) or Chris Giddens, KPMG Financial
Advisory Services Limited in Bermuda (+ 1 (441) 294 2653)

CONTACT: Northern Offshore
         Phone: 1 441 294 2653
         Fax: 1 441 295 8280



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

AGUAS DEL ILLIMANI: Regulator Moves for Audit, Review
-----------------------------------------------------
Outgoing water services concessionaire Aguas del Illimani will
undergo an audit following orders by the basic services
regulator, says Business News Americas. The government has
earmarked US$100,000 to hire an international auditing firm,
which will examine economic, commercial, and contractual
compliance issues, as well as administrative and technical
aspects of the concessionaire.

The audit will cover Aguas del Illimani's operations since 1997,
when it took over basic services operations of La Paz and
satellite town El Alto via concession, up to the present.

The government notified Illimani of the rescission of its
contract last year after residents complained about lack of
services in parts of the city and water bills tied to the US
dollar.

Illimani, which is controlled by French water giant Suez, says
it complied fully with its obligations under the contract it had
with the government.



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

ARACRUZ CELULOSE: FC Rating Reflects Sovereign Rating
-----------------------------------------------------
Rationale

The 'BB-' foreign currency rating on Aracruz Celulose S.A.
(Aracruz) mirrors the foreign currency rating assigned to the
Federative Republic of Brazil. The 'BBB-' local currency
reflects Aracruz's above-average ability to remain protected
against the idiosyncrasies of the Brazilian economy because of
the company's sales to the external market, its strong
competitive position in the market pulp business as a low-cost
producer, and its free cash flow generation from 2004 on. On the
other hand, Standard & Poor's also considers that a prolonged
economic crisis in Brazil could potentially curtail the
company's financial flexibility in the medium term, as its
ability to sustain cash generation at current strong levels and
to execute adequate investment decisions to support its long-
term growth could be impaired. The continuity of Brazil's
improving economic and political environment provides Aracruz
with more stable conditions under which to manage its financial
position.

For analytical purposes, Standard & Poor's projections
proportionally incorporate Aracruz's USGAAP financial figures,
50% of the Veracel debt, and 50% of its projected cash
generation, as Aracruz guarantees 50% of the debt and will
benefit from 50% of Veracel's pulp production. In 2005, Aracruz
is expected to sell 130,000 tons of pulp coming from this plant.
Veracel is a 900,000-ton pulp project in association with
Sweden-based pulp and paper producer Stora Enso, and the plant
should be initiating production in late June 2005.

Aracruz's first-quarter 2005 results show a record volume sold
of 592,000 tons, 9% higher than those for first-quarter 2004.
The higher volume sold and average list pulp prices 11% higher
than the same period last year in the global market were both
responsible for the 16% increase in net revenues for first-
quarter 2005 compared with those of first-quarter 2004. As a
result, EBITDA grew about 19% in the same period (US$151.5
million in first-quarter 2005 and US$126.8 million in first-
quarter 2004), a great increase even considering that 60% of
Aracruz's costs are denominated in local currency (Real), which
has appreciated throughout the quarter. Also in first-quarter
2005, EBITDA to gross interest coverage enhanced and hit 5x
(4.5x in first-quarter 2004), and funds from operations (FFO) to
total gross debt (including Veracel's debt portion) reached 28%,
which is fairly stable when compared to 29% in the same period
last year. Aracruz's higher FFO in first-quarter 2005 of US$116
million (US$101 million in first-quarter 2004) stems from the
same reason as the EBITDA growth. The company's credit metrics
in first-quarter 2005 are in line with Standard & Poor's
expectations.

Aracruz is the world's leading producer of bleached eucalyptus
Kraft pulp (BEKP), accounting for some 31% of the global supply,
or some 2.5 million tons per year. Since the Fiberline C project
came on stream, Aracruz is no longer self sufficient in its
fiber needs. However, the company's higher wood requirements are
being supplied by the Veracel project. In 2004, 35% of Aracruz's
wood requirements were supplied from Veracel, and the company's
projection for 2005 is 15%. Aracruz has already invested in its
self-sufficiency projects and is expected to be self sufficient
in fiber again by 2006.

Liquidity

Liquidity remains comfortable and is one of the key rating
factors that sustains Aracruz's average financial risk. The
company has resolved its financing needs to fund two significant
investments (Veracel and Gua¡ba) with long-term debt instruments
in line with the return of the projects. The acquisitions of the
Gua¡ba mill in 2003 and the Veracel project led its formerly
average debt position to increase about US$600 million from
second-semester 2003 until now. Even though Aracruz has focused
on the international credit markets, it also enjoys strong
access to the local credit market (although bank lines are not
committed in Brazil) and benefits from a "flight to quality"
during a stressed macroeconomic environment.

Aracruz has shown a positive free cash flow since 2004, and
Standard & Poor's Ratings Services projections indicate that it
will continue to be positive, even considering Aracruz's portion
of investments to be completed at the Veracel project. The
company is expected to use its free cash to amortize long-term
debt. It is also part of Aracruz's financial strategy to seek to
stretch the total debt amortization schedule, which is aimed at
strengthening the company's financial flexibility. This action
is already seen in the full-year 2004 figures that present a
ratio of short-term to total debt of 15%, when this ratio had
usually averaged 35% in the past. Moreover, Aracruz has
established a financial policy directive in which cash holdings
are targeted to be equivalent to 12 months of amortization (in
first-quarter 2005 it represents 24 months), which improves its
financial flexibility in the event of an unexpected credit
crunch.

As of full-year 2004, about 46% of Aracruz's partially
consolidated with Veracel debt was its export future flow
securitization, and the remaining were long-term trade finance
(20%) and BNDES transactions (some 25%), with a comfortable
amortization schedule. According to Standard & Poor's
projections, total gross debt is expected to remain at US$1.6
billion until 2005 (or about US$1.2 billion when considering the
total debt net of cash holdings), when it will gradually start
to decline. From 2006 on, Aracruz will face higher debt
amortization amounts, but the company should benefit from larger
cash generation as a result of the Veracel full output coming on
stream.

Outlook

The stable outlook on Aracruz's foreign currency rating reflects
that of the sovereign rating of the Federative Republic of
Brazil. The stable outlook on the local currency rating reflects
the expectation that the current economic, financial, and
political conditions in Brazil will allow Aracruz to sustain
strong profitability and access to long-term funding either
locally or internationally. Rating stability also considers that
by 2006 the company (partially consolidated with Veracel) will
be able to sustain coverage ratios (EBITDA to gross interest) of
about 6x and total gross debt to EBITDA of about 2x, as Aracruz
will benefit from Veracel's full output coming on stream. If the
company's performance deteriorates as a result of a change in
its fundamentals, and Aracruz fails to deliver FFO to total debt
of about 35% and total debt to EBITDA of close to 2x by 2006,
the outlook could be revised to negative.

Primary Credit Analyst: Marcelo Costa, Sao Paulo (55) 11-5501-
8955; marcelo_costa@standardandpoors.com

Secondary Credit Analyst: Milena Zaniboni, Sao Paulo (55) 11-
5501-8945; milena_zaniboni@standardandpoors.com


BRASKEM: S&P Details Improved Liquidity
---------------------------------------

ISSUER CREDIT RATING
  Corporate Credit Rating:
    Local currency                        BB/Stable/--
    Foreign currency                      BB-/Stable/--

AFFIRMED RATING
  Sr unsecd debt Foreign currency         BB-

Major Rating Factors

Strengths:

- Strong market share in most product segments where it
operates, and a wide-scope product portfolio, which has
traditionally provided the company with the ability to sustain
spreads, margins, and cash generation when compared with those
of its international peers

- Size (largest petrochemical producer in Latin America) and
economies of scale (integrated since naphtha cracking through
end polyolefins and vynilics production) allow for higher
operating profitability than that of other local competitors

- Some degree of geographic diversification for production and
sales, with operations in two different petrochemical complexes
(Cama‡ari and Triunfo) providing it with some degree of
operational flexibility

- Technological expertise in developing new products and
efficiency improvements under way that should provide steadier
cash flow over time to face cyclical troughs, especially
compared with the recent past

Weaknesses:

- Exposure to volatile feedstock cost and foreign exchange
rates, potentially creating temporary mismatches between cost
and price increases that can momentarily create working capital
pressure and slash cash generation;

- Sales concentration in its home market of Brazil, with export
profitability as a direct function of international
petrochemical prices, consequently exposing the company to
Brazil's volatile GDP trends

- Growing competition, as existing players also move toward
consolidation and expand production capacity, some using
alternative feedstock (tending to increase price competition)

Rationale

The ratings on Braskem S.A. reflect the risks associated with
price volatility of its main feedstock, naphtha (sustained at
historic highs for a very long time already); exposure to its
home market of Brazil for EBITDA and sales generation
(considering that exports cannot fully compensate for the
profitability lost during cyclical downturns); and growing
competition with the consolidation and expansion of other
players, some of them using alternative feedstock. These
negatives are mitigated by Braskem's leading business and market
position in the Latin American petrochemical industry (which we
see as peculiarly less fragmented and therefore more favorable
than other mature markets worldwide); economies of scale and
some level of geographic diversification; increasing
technological expertise; and all efficiency improvement
initiatives being implemented by the company, both in its
financial and industrial profiles, which should result in
structural cost reductions in the medium term and therefore more
resilience in cash flow, especially when compared with the
performance in past years.

Braskem is the largest petrochemical company in Latin America,
with net sales and EBITDA of $4.18 billion and $946.9 million in
the 12 months ended March 31, 2005, respectively.

Braskem's capital structure continued improving in first-quarter
2005, moving further in the trend seen since the second half of
2004. Total debt levels declined to $1.98 billion and net debt
to $1.29 billion (from $2.13 billion and $1.46 billion,
respectively, in December 2004). Cash generation, which remained
robust in the period, permitted cash reserves to be preserved at
$686 million, so that, on a net debt basis, the company's credit
measures remain quite strong for the rating category.
Nevertheless, current strong financial ratios, with total debt
to EBITDA at 2.1x and funds from operations (FFO) to total debt
at 38.8% in the 12 months ended March 31, 2005, reflect several
improvements undertaken by the company in 2004 to extend and
improve its debt profile. Braskem should also cautiously take
account of the favorable market conditions for the petrochemical
industry worldwide, where spreads between naphtha (Braskem's
primary feedstock) and ethylene, and between ethylene and
polyethylenes, continue expanding, allowing for stronger
operating profitability and thus outstandingly strong cash flow.

In fact, the significant improvement in cash generation in 2004
and now in first-quarter 2005 should be put in context,
considering very weak levels in previous years, when the company
faced not only challenging industry conditions but also an
increase in operating working capital requirements, with higher
raw material cost and some volume increases in a context of
limited access to suppliers' financing. We understand that part
of the gains that have been gathered since 2004 also reflect
initiatives to reduce costs and improve efficiency, but higher
utilization rates (climbing to more than 90% in 2004 and first-
quarter 2005 from an average 85% in 2003), very strong prices,
and a strengthening foreign exchange rate in the past two
quarters (greatly offsetting feedstock cost spikes) should
account for the bulk of the current operating improvement. We
continue expecting FFO-to-total debt to average 30%-40% through
the petrochemical cycle, with total debt to EBITDA below 2.5x.
These should also be considered a reflection of a more
conservative financial policy undertaken by Braskem's management
from now on, which is an important supporting rating factor. The
company's efforts to reduce overall cost of debt have already
been reflected in an improvement of the EBITDA-to-interest ratio
to 4.6x in the 12 months ended March 31, 2005, from an average
of 2x in 2002 and 2003. We continue expecting this ratio to
stabilize at about 4x through 2005.

Pressured by volatile oil prices, naphtha price remains
sustained at record highs of more than $400/ton. The average
naphtha cost in first-quarter 2005 was $429/ton, comparing with
$378/ton in 2004. Having a direct impact on Braskem's margins,
the effect of wide oscillations of naphtha cost on working
capital requirements is not negligible either. We see proactive
actions undertaken by the company to manage those pressures,
diversifying its base of suppliers (though still relying heavily
on Petroleo Brasileiro S.A.-Petrobras, which accounted for 64%
of total naphtha purchases in first-quarter 2005) and both
accessing suppliers' credit for imports and increasing the use
of alternative feedstock such as oil condensate.

While we do not expect market conditions to weaken dramatically
in the short term (despite some cooling-off already noticeable
due to high domestic interest rates), the current fair-to-
positive market environment both domestically and
internationally remains an important short-term success factor
for Braskem, assuming that naphtha costs will remain at
substantially higher levels than historical ones. Some
turbulence is not ruled out for 2006 given presidential
elections; however, growth prospects should remain fairly
positive in the medium term, allowing for cost increases to be
passed on throughout the petrochemical chain in synch with
global trends. We recognize that Braskem has traditionally
managed to report much stronger operating margins than have its
global peers, even during the most challenging troughs witnessed
in the recent past. That reflects not only the company's very
favorable market position but also the peculiarities of the more
concentrated petrochemical industry in Brazil. Nevertheless,
price adjustments can be more difficult to implement under less
sanguine domestic market conditions. We also understand that
operating improvements and synergies, marginal capacity
expansions (through debottlenecking) diluting fixed costs, and a
richer product mix (with higher value-added products somewhat
reducing volatility and new applications helping sustain
volumes) will allow Braskem to report improved results on a
perennial basis even during the cycle troughs, which we expect
to be more evident under less favorable petrochemical spreads.

From a short-term perspective, current petrochemical prices have
already allowed Braskem to absorb the 2004 and first-quarter
2005 hike of raw material cost (with currency appreciation also
playing an important role in smoothing out the impact of cost
spikes this year) and still report robust results, which gives
the company some room to sustain operating profitability under a
potential slowdown scenario. This scenario, on the other hand,
could not be totally delinked from a decline in raw material
cost, also alleviating overall financial pressures. In any
event, foreign exchange fluctuations, spreads between naphtha
and ethylene and ethylene and polyolefins in international
markets, and domestic demand patterns will remain intrinsic
variables with great influence on the company's performance in
the longer term.

Liquidity

Liquidity has substantially improved after the global equity
offer cashed-in by the end of September 2004 and has remained
strong in 2005. Braskem's cash reserves amounted to $686 million
as of March 2005 (including long-term marketable securities),
favorably comparing with short-term debt maturities of $342.4
million through March 2006, a very important accomplishment in
the company's strategy for longer debt duration and a smoother
amortization schedule. Short-term maturities include primarily
working capital loans, export prepayment amortization, and loans
from government agencies and the Brazilian Development Bank
(BNDES), apart from $65 million of MTNs coming due in October
2005. Refinancing risk is now concentrated in three major
maturities: in 2007, the company will have to face principal
payment of its 1997 Trikem bond ($250 million) and of debentures
with convertible Odebrecht (which mirror an identical obligation
by Odebrecht with BNDES) of BrR899 million (approximately $337
million at the foreign exchange rate of March 2005); in 2008 the
third tranche of its MTNs ($275 million) come due. The only
other major maturity comes due in 2014, represented by Braskem's
fourth tranche of its MTNs of $250 million.

FOCF is expected to continue strengthening in 2005, despite
Braskem's plans to perform debottlenecking capital expenditures
on top of its maintenance capital expenditures: approximately
$200 million in total. In addition, the company has also
announced its partnership with Petrobras to build a new 300,000-
tpy polypropylene plant in Paul¡nia, which should add on to
current prognostics. Part of these investments already have
long-term financing with favorable amortizing schedules secured.
In April 2005, Braskem paid dividends for the first time since
its creation in 2002, in the amount of BrR204.2 million
(relative to fiscal 2004); we do expect the company to sustain a
conservative dividend policy in the future.

Outlook

The stable local-currency rating outlook derives from the
pivotal expectation that Braskem's current capital structure
will be sustained (both because management has assumed a more
moderate stance and because market conditions will allow its
financial strategy to continue being implemented) and that the
company's operating and business profiles will continue
improving gradually with debottleneckings, product mix
enrichment, and feedstock diversification. We believe that
fundamentals for Braskem's operating profitability and cash
generation are fair to positive in the medium term and stable in
the long term, allowing the company to report credit measures
that are quite comfortable for the rating category in 2005 and
that should remain adequate throughout the petrochemical cycle.
Further rating improvement can derive from the company's ability
to effectively withstand the petrochemical cycle thanks to its
several improvement initiatives and scale (which would prove so
under less favorable market conditions), combined with further
total debt reductions relative to a normalized, through-the-
cycle cash flow and with the company's addressing 2007
refinancing risks. A negative rating action could be prompted by
the company's inability to sustain margins or a radical reversal
in the trend of cash generation, or a quick deterioration of its
liquidity position. We also factor into the ratings the fact
that Braskem's commitment to a more conservative financial
policy since mid-2004, both in regards to its liquidity position
and leverage boundaries, will be preserved in the future,
providing the company with a safety cushion to weather the
inevitable downturns in the cyclical petrochemical industry and
of the volatile economy of its home market, Brazil.

The stable outlook on the foreign-currency rating reflects the
outlook on the foreign-currency sovereign rating on the
Federative Republic of Brazil.

Primary Credit Analyst: Reginaldo Takara, Sao Paulo (55) 11-
5501-8932; reginaldo_takara@standardandpoors.com

Secondary Credit Analyst: Milena Zaniboni, Sao Paulo (55) 11-
5501-8945; milena_zaniboni@standardandpoors.com


EMBRATEL: Board to Vote on Capital Increase
-------------------------------------------
Embratel Participacoes S.A. (BOVESPA: EBTP3, EBTP4; NYSE: EMT),
which holds 98.8% of Empresa Brasileira de Telecomunicacoes S.A.
("Embratel"), informs that its Board of Directors will meet
today, May 23, 2005 at 3:00 pm to ratify the capital increase
authorized in the Board Meeting of February 2 and rectified and
ratified on February 23 of 2005 and which terminated on May 3,
2005.

Embratel is the premier communications provider in Brazil
offering a wide array of advanced communications services over
its own state of the art network. It is the leading provider of
data and Internet services in the country and is well positioned
to be the country's only true national local service provider
for corporate customers. Service offerings include: telephony,
advanced voice, high-speed data communication services,
Internet, satellite data communications, corporate networks and
local voice services for corporate clients. Embratel is uniquely
positioned to be the all-distance telecommunications network of
South America. The Company's network has countrywide coverage
with 32,466 km of fiber cables.

CONTACT:  Investor Relations: Silvia M.R. Pereira
          Tel: (55 21) 2121-9662
          Fax: (55 21) 2121-6388
          Email: silvia.pereira@embratel.com.br
                 invest@embratel.com.br


PARANAPANEMA: Posts Lower 1Q05 Net Loss on Increased Sales
----------------------------------------------------------
Sao Paulo-based mining and metals holding company Paranapanema
posted a 1Q05 net loss of BRL14.8 million (US$6.05mn), 42% lower
than the 1Q04 loss, according to a filing with the Sao Paulo
stock exchange (Bovespa). Business News Americas reports that
the Company attributed the improvement to strong copper and tin
prices, as well as increased sales volumes.

Ebitda climbed 17% to BRL72.8 million in 1Q05 compared to
BRL62.4 million in 1Q04. Net sales reached BRL658 million in the
quarter, an increase of 24% over 1Q04.

The results "showed strong increases, even though they were not
sufficient to cover finance charges related to debt represented
by debentures held by controlling shareholders and Brazil's
national development bank BNDES which caused the loss in the
quarter," Paranapanema said in the filing.

Paranapanema has four main divisions: tin and industrial company
Mamore, fertilizer unit Cibrafertil, copper smelter Caraiba
Metais and copper tube and fixture maker Eluma.


VARIG: TAP Rules Out Merger
---------------------------
TAP-Portugal is not interested in forming a merger with heavily
indebted Brazilian carrier Varig, Caribbean News reports, citing
TAP president Fernando Pinto. Mr. Pinto said TAP wanted to
acquire 20% of Varig, the maximum allowed under Brazilian law
for a foreign company.

"They will always be two independent companies, there is not the
slightest chance of a merger, that is not the idea," said Mr.
Pinto, who is Brazilian and a former president of Varig.

TAP and Varig are currently in talks, which may lead to the
Portuguese airline making an investment in the firm. TAP said in
a statement that it had decided to open talks with Varig because
the airline's controlling shareholder, Fundacao Ruben Berta, had
announced that it wants to cede control of the troubled carrier.

Varig is saddled with BRL9.5 billion (US$3.8 billion) in debt
and has been losing domestic market share.

CONTACT:  VARIG (Viacao Aerea Rio-Grandense, S.A.)
          Rua 18 de Novembro No. 800, Sao Joao
          90240-040 Porto Alegre,
          Rio Grande do Sul, Brazil
          Phone: (51) 358-7039/7040
                 (51) 358-7010/7042
          Fax: +55-51-358-7001
          Home Page: www.varig.com.br/english/



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

FERROVIAS: Liquidation, Closure Anticipated End of June
-------------------------------------------------------
Defunct national railroad company Ferrovias will be completely
liquidated and closed by end-June this year, Business News
Americas reports, citing a Ferrovias representative. As part of
the process, Ferrovias has been largely disbanded and is now led
by head liquidator Emiro Aristizabal, with a small team to help
him wrap up the Company.

Ferrovias was established in 1989 after the government
liquidated national railroad company FNC. In June 2003,
President Alvaro Uribe issued a decree ordering the liquidation
of Ferrovias following lawsuits stemming from disputes under the
previous president's administration. The decree gave the Company
"at least" two years to fully liquidate. However, Ferrovias was
forced to transfer its concession programs to the national
concessions institute (Inco) within six months of the decree.


TELECOM: Former Clients Granted More Time to Settle Balances
------------------------------------------------------------
The former clients of liquidated state telco Telecom have until
May 31 to subscribe to the Company's debt recovery program,
which was launched mid-April, reports Business News Americas.

Telecom en Liquidacion, an entity representing Telecom, extended
the deadline from May 17 to give former owners of nearly 200,000
lines more time to renegotiate debts totaling at least COP88
billion (US$37 million).

As of May 10, the debt recovery program has resulted in payments
of COP1.2 billion.

Telecom was liquidated in July 2003 and its assets were taken
over by a new state operator Colombia Telecomunicaciones, which
continues to use the Telecom brand name.



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

AHMSA: Gets Wage Agreement With Workers at No. 2 Plant
------------------------------------------------------
Steelmaker Altos Hornos de Mexico SA (AHMSA) has reached a wage
agreement for 2005-2007 with workers at its No. 2 plant, reports
Business News Americas. The agreement, which was signed by AHMSA
corporate director of industrial relations Enrique Rivera Gomez,
and the president of the Mexican miners and metalworkers union
(STMMRM), Napoleon Gomez Urrutia, gives workers a 6% collective
pay rise.

The wage increase reflects the fact that workers helped make
AHMSA "one of the most efficient [steelmakers] in world," Mr.
Rivera said.

AHMSA posted a 1,318% increase in profits in the 1Q05,
registering MXN1.74 billion (US$158 million) compared to ARS123
million in the 1Q04. The Company also saw its sales of steel
increase 3% to 645,000t in the first quarter compared to 1Q04,
while sales revenues increased 55.5% to MXN5.8 billion during
the same period.

Since its defaulted on US$187 billion in debt, AHMSA has seen
its fortunes turn on soaring steel prices.

CONTACT: AHMSA
         International Operations
         Prolongacion Juarez s/n
         Monclova, Coah., 25770
         Phone: + 52 (866) 649 34 00
         Fax: + 52 (866) 649 23 10
         E-mail: sales@ahmsa.com
         Web site: http://www.ahmsa.com.mx


BALLY TOTAL: Board Member Steps Down to Avoid Potential Conflict
----------------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE: BFT), North
America's leader in health and fitness products and services,
announced Friday that David Wilhelm, recently appointed to the
Board of Directors, has resigned.

Mr. Wilhelm is a partner in venture capital companies that bring
investment capital to underserved markets in the Midwest and
Appalachia. After Mr. Wilhelm's appointment to the Bally board,
it came to our attention that one of the investments his
companies made is in a business founded by another board member.
While this fact does not constitute a legal, ethical or
corporate governance conflict, Mr. Wilhelm has resigned from the
board in order to avoid even the slightest appearance of a
conflict of interest.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers, with approximately four
million members and 440 facilities located in 29 states, Mexico,
Canada, Korea, China and the Caribbean under the Bally Total
Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle
Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R)
brands. With an estimated 150 million annual visits to its
clubs, Bally offers a unique platform for distribution of a wide
range of products and services targeted to active, fitness-
conscious adult consumers.

CONTACT: Bally Total Fitness Holding Corporation
         Mr. Matt Messinger
         Phone: 773-864-6850


GRUPO MEXICO: SPCC Minority Shareholders Prepare to Sell Stakes
---------------------------------------------------------------
On May 19, 2005, all of the holders of the Class A common stock,
par value $0.01 per share (the " Class A Common Stock "), of
Southern Peru Copper Corporation (SPCC), namely, SPHC II
Incorporated, Cerro Trading Company, SPC Investors, L.L.C.,
Phelps Dodge Overseas Capital Corporation and Climax Molybdenum
B.V., voluntarily converted (the " Conversion "), on a share-
for-share basis, all of their shares of Class A Common Stock,
totaling in the aggregate 65,900,833 shares, into 65,900,833
newly-issued shares of fully paid and non-assessable common
stock of SPCC, par value $0.01 per share (the " Common Stock ").

As a result of the Conversion, (1) no shares of Class A Common
Stock remain outstanding and no shares of Class A Common Stock
shall be reissued, and (2) the number of authorized shares of
Common Stock is now 167,207,640 and there are outstanding
147,248,216 shares of Common Stock.  In addition, the Agreement
Among Certain Stockholders of SPCC, dated January 2, 1996, as
amended, has terminated as a result of the Conversion pursuant
to section 4.2 thereof.

Accordingly, the right of the holders of Class A Common Stock
(1) to vote as a separate class with respect to the election of
directors of SPCC, (2) to elect thirteen of the fifteen members
of the Board of Directors of SPCC (3) and to have five votes per
share of Class A Common Stock when voting as a single class with
the Common Stock on all matters other than the election of
directors has been eliminated.  All holders of Common Stock
shall vote as a single class on all matters submitted to a vote
of stockholders, with each share of Common Stock entitled to one
vote.

In April, Grupo Mexico merged its Mexican and Peruvian
operations to turn SPCC into the world's No. 2 copper company by
reserves and market capitalization.

Grupo Mexico holds 75 percent of Southern Peru. After the stakes
owned by Phelps Dodge and Cerro Trading, the remainder is held
by small shareholders.

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


PYCSA: Defends Delays in Construction of Panama Highway
-------------------------------------------------------
Construction consortium Proyectos y Construcciones S.A. (PYCSA)
counters allegations that the Company's financial woes have
impeded completion of the phase two of Panama City's Northern
Corridor highway. Business News Americas reports that PYCSA has
attributed the delays to the disagreements between local
authorities and individuals whose land holdings will be
affected.

Indeed, PYCSA foresees no financial problems in the short,
medium or long term that will affect the contract with the
Panamanian government, the Company said.



===========
P A N A M A
===========

WILLBROS GROUP: Federman & Sherwood Files Class Action Lawsuit
--------------------------------------------------------------
On May 18, 2005, a class action lawsuit was filed in the United
States District Court for the Southern District of Texas against
Willbros Group, Inc. The complaint alleges violations of federal
securities laws, Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Securities and Exchange Commission Rule
10b-5, including allegations that the defendants issued a series
of material misrepresentations to the market which had the
effect of artificially inflating the market price of Willbros
Group, Inc.'s stock. The class period is from May 6, 2002
through May 16, 2005.

Plaintiff seeks to recover damages on behalf of the Class. If
you are a member of the Class as described above, you may move
the Court no later than July 18, 2005, to serve as a lead
plaintiff for the Class. However, in order to do so, you must
meet certain legal requirements pursuant to the Private
Securities Litigation Reform Act of 1995.

If you wish to discuss this action, participate in this suit, or
have any questions or concerns regarding this notice, or
preservation of your rights, please contact:

     William B. Federman
     FEDERMAN & SHERWOOD
     120 N. Robinson, Suite 2720
     Oklahoma City, OK 73102
     (405) 235-1560/FAX: (405) 239-2112
     mail to: wfederman@aol.com
     http://www.federmanlaw.com


WILLBROS GROUP: Schiffrin & Barroway Files Class Action Suit
------------------------------------------------------------
The following statement was issued Friday by the law firm of
Schiffrin & Barroway, LLP:

Notice is hereby given that a class action lawsuit was filed in
the United States District Court for the Southern District of
Texas on behalf of all securities purchasers of Willbros Group
Inc. (NYSE: WG) ("Willbros" or the "Company") between May 6,
2002 and May 16, 2005, inclusive (the "Class Period").

If you wish to discuss this action or have any questions
concerning this notice or your rights or interests with respect
to these matters, please contact Schiffrin & Barroway, LLP (Marc
A. Topaz, Esq. or Darren J. Check, Esq.) toll-free at 1-888-299-
7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.

The complaint charges Willbros, Michael F. Curran, Larry J.
Bump, Warren L. Williams, and J. Ken Tillery with violations of
the Securities Exchange Act of 1934. More specifically, the
Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them: (1) that
the Company, in violation of the Foreign Corrupt Practices Act,
engaged in illegal activities including the execution of related
party transactions and the bribery of government officials in
Bolivia, Nigeria and Ecuador; (2) that the Company filed false
tax returns, failed to file required tax returns, and failed to
pay certain taxes in locations outside the United States; (3)
that the Company lacked adequate internal controls; and (4) the
as a result of the above, Company's reported financial results
were materially overstated at all relevant times and were in
violation of US GAAP.

On May 16, 2005, Willbros announced that, as a result of the
previously disclosed tax assessment related to a completed
project in Bolivia and its ongoing internal investigation into
the facts and circumstances surrounding this tax assessment and
other illegal activities, the Company will restate its
previously issued financial statements for the 2002 and 2003
fiscal years and the first three quarters of 2004. News of this
shocked the market. Shares of Willbros fell $4.92 per share or
30.9% to close at $11.00 per share.

Plaintiff seeks to recover damages on behalf of class members
and is represented by the law firm of Schiffrin & Barroway,
which prosecutes class actions in both state and federal courts
throughout the country. Schiffrin & Barroway is a driving force
behind corporate governance reform, and has recovered in excess
of a billion dollars on behalf of institutional and high net
worth individual investors. For more information about Schiffrin
& Barroway, or to sign up to participate in this action online,
please visit http://www.sbclasslaw.com.

If you are a member of the class described above, you may, not
later than July 18, 2005, move the Court to serve as lead
plaintiff of the class, if you so choose. A lead plaintiff is a
representative party that acts on behalf of other class members
in directing the litigation. In order to be appointed lead
plaintiff, the Court must determine that the class member's
claim is typical of the claims of other class members, and that
the class member will adequately represent the class. Under
certain circumstances, one or more class members may together
serve as "lead plaintiff." Your ability to share in any recovery
is not, however, affected by the decision whether or not to
serve as a lead plaintiff. You may retain Schiffrin & Barroway,
or other counsel of your choice, to serve as your counsel in
this action.

     CONTACT:  Schiffrin & Barroway, LLP
               Marc A. Topaz, Esq.
               Darren J. Check, Esq.
               280 King of Prussia Road
               Radnor, PA 19087
               1-888-299-7706 (toll-free) or 1-610-667-7706
               Or by e-mail at info@sbclasslaw.com



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

BANCO WIESE: Intesa Reaffirms Commitment to Peruvian Unit
---------------------------------------------------------
Italian bank Banca Intesa placed five of its officials on the
board of its Peruvian unit Banco Wiese Sudameris to quell rumors
that it is pulling out of Peru, reports Business News Americas.
Recent media reports have suggested that Intesa is looking to
sell its majority stake in Banco Wiese. Intesa owns some 98% of
the Peruvian bank, which is the country's third largest bank in
terms of total loans and deposits.

However, the possibility remains that Intesa would sell a
portion of its shares to local business group Grupo Wong, which
has publicly expressed interest in purchasing Wiese Sudameris.
Canada's Scotiabank (NYSE: BNS) has also been singled out as a
potential bidder for Intesa's Peruvian assets.



=====================
P U E R T O   R I C O
=====================

R&G FINANCIAL: Moves to Defer Nasdaq Delisting
----------------------------------------------
R&G Financial Corporation (NYSE:RGF) (the "Company") a
diversified financial holding company, received on May 18, 2005,
a notice from the Nasdaq Listing Qualifications Department (the
"Department") indicating that because The Nasdaq Stock Market
("Nasdaq") had not received the Company's Form 10-Q for the
period ended March 31, 2005 (the "First Quarter 10-Q"), the
Company's preferred securities listed on Nasdaq will be subject
to delisting at the opening of business on May 27, 2005 unless
the Company requests a hearing in accordance with Nasdaq's
Marketplace Rule 4800 Series. The Company has advised that it
does intend to request a hearing by a Nasdaq Listing
Qualifications Panel pursuant to the procedures set forth in the
Nasdaq Marketplace Rules 4800 Series. The Company's Nasdaq
listed securities will remain listed pending the result of such
appeal. Pursuant to Nasdaq conventions for companies with late
public filings, a fifth character, "E", will be appended to the
trading symbols of the Company's securities traded on the Nasdaq
and other modifications will be made to the Company's trading
symbols due to the unavailability of the symbols as they would
have been modified. Accordingly, the trading symbols of the
Company's preferred securities traded on Nasdaq will be changed
from RGFCM to RGFME, from RGFCN to RGFLE, from RGFCO to RGFOE
and from RGFCP to RGFPE at the opening of business on May 20,
2005.

As previously disclosed, the Company determined to review the
independent market valuations used in valuing residual interests
retained in its securitization transactions after discussions
with its independent accountants. The Company stated that it was
revising its valuation methodology used in valuing these
interests that are presented in the Company's audited
consolidated financial statements. The Company concluded that
its previously filed interim and audited financial statements
for the periods from January 1, 2003 through December 31, 2004,
would be materially affected as a result of the revision in the
valuation methodologies being contemplated, and therefore, the
financial statements for the periods therein should be restated.
The Company indicated at such time that it was delaying the
release of its earnings for the first quarter of 2005.

As a result of these events and due to the time necessary to
revise the valuation methodologies on the residual interests
which will necessarily impact both the prior period financial
statements and the related March 2005 financial statements, the
Company was not able to meet the filing deadline of May 10,
2005, for the filing of the First Quarter 10-Q. Furthermore, the
Company previously announced that it anticipated it would not
file the First Quarter 10-Q by the May 16, 2005 deadline
permitted by Rule 12b-25 as a consequence of the work involved.
The Company is working diligently to file, as soon as
practicable, the First Quarter 10-Q and the restated results for
prior periods.

R&G Financial, currently in its 33rd year of operations, is a
diversified financial holding company with operations in Puerto
Rico and the United States, providing banking, mortgage banking,
investments, consumer finance and insurance through its wholly-
owned subsidiaries R-G Premier Bank of Puerto Rico, a Puerto
Rico-chartered commercial bank, R-G Crown Bank, its Florida-
based savings bank, R&G Mortgage Corp., Puerto Rico's second
largest mortgage banker, Mortgage Store of Puerto Rico, Inc., a
subsidiary of R&G Mortgage, Continental Capital Corp., R-G
Crown's New York and North Carolina based mortgage banking
subsidiary, R-G Investments Corporation, a Puerto Rico broker-
dealer, and Home and Property Insurance Corporation, a Puerto
Rico insurance agency. As of December 31, 2004, R&G Financial
had previously reported consolidated assets of $10.2 billion and
consolidated stockholders' equity of $855.6 million.

CONTACT:  R&G Financial Corp.
          280 Jesus T. Pinero Ave.
          Hato Rey
          San Juan, 00918
          Puerto Rico
          Website: http://www.rgonline.com
          Phone: 787-758-2424

          Officers: Victor J. Galan, Pres. & CEO
                    Joseph R. Sandoval, CFO
                    Enrique Umpierre-Suarez, Sec't.



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

UAIR: Faces Bankruptcy Threat, Suspends Flights
-----------------------------------------------
Uruguayan low-cost airline Uair has cancelled flights and is at
risk of going bankrupt due to its critical financial situation,
according to the Company's management.

"We suspended operations and arrived to this situation because
of not having reached agreement with the government," said
company president Antonio Rama.

Uair authorities had proposed to the Uruguayan government a
merger with local airline Pluna, after which UK-based fund
Ashmore would inject capital in both companies. Ashmore has
already injected US$10 million in Uair but the government
refused the proposal.

"Ashmore has been very consistent and solid; it has invested an
important amount of money in Uair and doesn't want to loose it.
The government will have to see how to persuade Ashmore of doing
business in Uruguay and how it makes it up for the US$10 million
it will loose if Uair goes bankrupt and 170 people become
unemployed," Mr. Rama added.

Ashmore said last week it would stop funding Uair.

The airline will call for a creditor's meeting in an attempt to
find a solution to the Company's crisis.



=================
V E N E Z U E L A
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PDVSA: Sets End-June Target for 2003 SEC Report
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It is still not known when state oil company Petroleos de
Venezuela SA will deliver its 2003 financial report to the US
Securities & Exchange Commission but the Company hopes to have
it ready by the end of June. Vheadline.com reports that Energy
Minister and PDVSA president, Rafael Ramirez has confirmed news
that the Company is currently working on the 2004 as well.

The KPMG accounting firm is auditing PdVSA's results for 2003
and 2004. PDVSA was supposed to submit the 2003 report last year
but missed it following the December 2002-January 2003 oil
strike that disrupted its finance department.

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

PDVSA is required to present annual reports to the SEC due to
its holdings in the US and outstanding debt. The last time PDVSA
filed its results with the SEC was in October 2003, after asking
for two extensions on its 2002 results.




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