TCRLA_Public/050527.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

            Friday, May 27, 2005, Vol. 6, Issue 104

                            Headlines

A R G E N T I N A

AEROLINEAS ARGENTINAS: Announces Creation of Peruvian Subsidiary
AEROLINEAS: Increases, Modernizes Fleet
ESCENCIA ARGENTINA: Proceeds With Liquidation
FRANCHISE INVESTMENT: Claims Validation Deadline Approaches
GASFOR S.R.L.: Submission of Individual Reports Due Monday

INDIANA MYSTERY: Court OKs Creditor's Bankruptcy Call
SIEMAR S.A.C. Y C.: Claims Filling Deadline Approaches


B E R M U D A

KWELM: Increases Payout for Creditors


B R A Z I L

PETROLEO IPIRANGA: To Recommence Operations in June
TELEMAR: To Issue BRL150M Worth of 5-Yr Debentures


E C U A D O R

PETROECUADOR: Protests Hamper Production


J A M A I C A

AIR JAMAICA: Reviews Ticket Pricing to Match Rival's


M E X I C O

EAGLEPICHER: Gets Extension of Interim DIP Financing Agreement
EMPRESAS ICA: Makes $94.9M Debt Payment
GRUPO ELEKTRA: Fitch Affirms International, National Ratings
TFM: KCSR Amends Relevant Sections of Supplemental Indentures


P A R A G U A Y

* PARAGUAY: Minister, BCP Pres. Seek New Agreement With IMF


P U E R T O   R I C O

DORAL FINANCIAL: To Delist Preferred Stock Listed on Nasdaq


V E N E Z U E L A

CITGO: Ministry Conducts Study to Recoup Excess Tax Payments
PDVSA: Ramirez Testifies Before National Assembly
PDVSA: Jointly Evaluates Business Possibility With Lukoil
SINCOR: Oil Ministry to Impose 30% Royalty Tax on Output

     -  -  -  -  -  -  -  -

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

AEROLINEAS ARGENTINAS: Announces Creation of Peruvian Subsidiary
----------------------------------------------------------------
Aerolineas Argentinas issued the following press release on May
20, 2005, informing the public of the creation of its Peruvian
subsidiary:

We do hereby announce the creation of our subsidiary Aerolineas
del Peru, a year before it has been planned.

Our Chief Executive Officer, Antonio Mata, has pointed out that
our new Company will be "the flag airline" of Peru and that its
creation will bear an "initial investment" of ten million
dollar.

Aerolineas del Peru, where the airline companies of the Marsans
group will have a 49% participation, will operate "as soon as
all legal conditions" are fulfilled in that country, he
explained to these respects.

He also stated that the other 51% will be in hands of "very
solvent Peruvian investors", as the statutes of the Andean
country have established, that will admit "in a short future
term" that the participation of the foreign capital amounts to a
70%.

Antonio Mata estimated that Aerolineas del Peru could operate
local flights "in the next three or four months", thus obtaining
licenses for international flights "at the end of the year".

The creation of this Company was foreseen for the beginning of
the next year, but it was "anticipated, because we are an
impulsive group, not because of the plans of other competing
companies", he added.

He also pointed out, that the Marsans group has "a great
interest in the tourist potential of Peru and will take into
account its "vast experience" at this sector, as well as the
synergy of all airlines that are controlled at this region, what
includes Aerolineas del Sur (that operates in Chile) and Air
Plus Comet.

Mata also stated that Aerolineas del Peru will give employment
to the Peruvians, thus bearing "a great commitment" with the
economic and social development of the Andean country.

He also underlined that the Marsans group has a great experience
in "everything concerning the tourism business", because of the
fact that they own many agencies, hotels, airlines and land
transport services.

Air Plus Comet started out in Peru during the last month of
November and will stay in the country once a new subsidiary of
the Marsans group has been created, because of the fact that
"they are separate, but complementary operations", Mata
explained.

CONTACT: AEROLINEAS ARGENTINAS
         Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA
         Phone: (54-11) 4310-3000
         Fax: (54-11) 4310-3585
         E-mail: volar@aerolineas.com.ar
         Web site: www.aerolineas.com.ar


AEROLINEAS: Increases, Modernizes Fleet
---------------------------------------
Aerolineas Argentinas obtained the sixth Boeing 737/500 and
before the end of the year ten- from a total amount of fifteen-
new planes will be joining the fleet, with the arrival of four
units during the next months.

The new airplane was registered as LV-BAX and immediately added
to the line of regional and inland flights.

All B-737/500 are still covering domestic routes from Aeroparque
(the City Airport) to Mar del Plata, C¢rdoba/Tucum n and Bah¡a
Blanca, where during the next month of June Bariloche, Calafate
will be added, as well as Montevideo as another regional route,
besides the routes already covered by the company's planes.

All B-737/500 - with a range of 4,481 km and a cruising speed of
0,745 mach - represent an important technological leap for the
Aerolineas fleet, that will totally replace the B-737/200 before
2007.

These planes, besides bearing more advantage as regards the fuel
consumption, produce less environmental pollution.

On the other hand, this month the third Boeing 747/400 arrives
to the country and before the end of the year the "Jumbo"
747/400 fleet will be completed with the arrival of a fourth
plane.


ESCENCIA ARGENTINA: Proceeds With Liquidation
---------------------------------------------
Mr. Osvaldo Pereyra successfully sought for the bankruptcy of
Escencia Argentina S.A. after Court No. 21 of Buenos Aires'
civil and commercial tribunal declared the Company "Quiebra,"
reports La Nacion.

As such, Escencia Argentina S.A. will now start the process with
Mr. Mario Leizerow as trustee. Creditors must submit proofs of
their claim to the trustee by Aug. 22, 2005 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 creditor sought for the Company's liquidation after the
latter failed to pay debts amounting to US$2226,40.

The city's Clerk No. 41 assists the court on the case that will
close with the sale of all of its assets.

CONTACT: Escencia Argentina S.A.
         Uruguay 367
         Buenos Aires

         Mr. Mario Leizerow, Trustee
         Lavalle 1290
         Buenos Aires


FRANCHISE INVESTMENT: Claims Validation Deadline Approaches
-----------------------------------------------------------
The verification of claims in the bankruptcy case of Franchise
Investment Company S.A. FICSA will end on Monday, May 30,
according to Infobae. Creditors with claims against the bankrupt
company must present proof of the liabilities to Ms. Ana Maria
Pazos, the court-appointed trustee, before the deadline.

Court No. 19 of Buenos Aires' civil and commercial tribunal is
handling the case with the assistance of Clerk No. 38. The court
has ordered the trustee to submit individual reports on the
forwarded claims and a general report containing an audit of the
company's accounting and business records on July 12 and Sep. 7,
respectively.

CONTACT: Franchise Investment Company S.A. FICSA
         Avda Corrientes 480
         Buenos Aires

         Ms. Ana Maria Pazos, Trustee
         Montiel 1147
         Buenos Aires


GASFOR S.R.L.: Submission of Individual Reports Due Monday
----------------------------------------------------------
Mr. Ernesto Carlos Borzone, the trustee assigned to supervise
the liquidation of Gasfor S.R.L., is due to submit on Monday,
May 30, the validated individual claims for court approval.
These reports explain the basis for the accepted and rejected
claims. The trustee will also submit a general report of the
case on July
12.

Infobae reports that Court No. 25 of Buenos Aires' civil and
commercial tribunal has jurisdiction over this bankruptcy case.
The city's Clerk No. 49 assists the court with the proceedings.

CONTACT: Mr. Ernesto Carlos Borzone, Trustee
         Cuenca 1464
         Buenos Aires


INDIANA MYSTERY: Court OKs Creditor's Bankruptcy Call
-----------------------------------------------------
Indiana Mystery S.R.L. entered bankruptcy after Court No. 8 of
Buenos Aires' civil and commercial tribunal approved a
bankruptcy motion filed by Palermo S.A., reports La Nacion. The
Company's failure to pay $50,330 in debt prompted Palermo S.A.
to file the petition.

Working with the city's Clerk No. 15, the court assigned Ms.
Glory Clara Kremer as trustee for the bankruptcy process. The
trustee's duties include the authentication of the Company's
debts and the preparation of the individual and general reports.
Creditors are required to present their proofs of claim to the
receiver before Aug. 1, 2005.

The Company's assets will be liquidated at the end of the
bankruptcy process to repay creditors. Payments will be based on
the results of the verification process.

CONTACT: Indiana Mystery S.R.L.
         Teniente General Benjam¡n Matienzo 1643
         Buenos Aires

         Ms. Glory Clara Kremer, Trustee
         Lavalle 1672
         Buenos Aires


SIEMAR S.A.C. Y C.: Claims Filling Deadline Approaches
------------------------------------------------------
The verification of claims for the Siemar S.A.C. y C. bankruptcy
case will end on Monday, May 30, according to Infobae. Creditors
with claims against the bankrupt company must present proof of
the liabilities to Alberto A. Vilela, the court-appointed
trustee, before the deadline.

Mr. Vilela will then present the validated claims in court as
individual reports on July 26. A general report, containing a
summary of the company's financial status as well as relevant
events pertaining to the bankruptcy, is due in court on Sep. 7.

Court No. 22 of the city's civil and commercial tribunal handles
the Company's case, which will conclude with the liquidation of
its assets.

CONTACT: Mr. Alberto A. Vilela, Trustee
         Rodriguez Pena 431
         Buenos Aires



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

KWELM: Increases Payout for Creditors
-------------------------------------
Creditors of the insolvent London-based KWELM insurance
companies will receive an average additional 11 per cent payout
across the five companies, according to the eleventh annual
report for 2004 issued today. The average payment will be 64 per
The report also projects that the average distribution will rise
further to between 68 per cent and 74 per cent in the next 12
months. This is higher than projected in the early closure
scheme which came into effect in April 2004.

- Average distribution to creditors rises from 53 per cent to 64
per cent, payable from end May 2005; distribution levels to date
range from 53 per cent to 72 per cent across the five companies.

- Creditors received a further $444 million in 2004 taking total
benefits to $3.4 billion.

- Cumulative gross reinsurance recoveries reached $2.1 billion
including $78 million recovered during 2004.

- Aggregate agreed and submitted liabilities were $3.8 billion
at end March 2005.

- Income generated of $111 million exceeded expenses by $82
million.

The KWELM companies are subsidiaries of the failed London United
Investments plc. They comprise Kingscroft Insurance, Walbrook
Insurance, El Paso Insurance, Lime Street Insurance and Mutual
Reinsurance. They specialised in US casualty, professional
indemnity and other liability insurance business. Over 90 per
cent of the KWELM assets and liabilities are in US dollars and
most of the policyholders are based in the United States.

The companies and their creditors entered into a Court approved
"Scheme of Arrangement" in 1993, the objective of which is to
pay out to valid creditors the maximum sum in the minimum
timescale. The scheme was amended in 2004 to permit early
closure.
The payouts for the five companies are:

Company         Revised payment            Previous payment
              percentage (May 2005)     percentage (April 2004)

Kingscroft            65                         57
Walbrook              65                         51
El Paso               72                         62
Lime Street           68                         60
Mutual                53                         44
Average               64                         53

Chris Hughes and Ian Bond, the Scheme Administrators responsible
for the run off of the businesses, comment:

"We have made significant progress processing the additional
claims submitted by the September 2004 bar date. The revised
payment percentages are based on our March 2005 estimate of $3.8
billion of agreed and submitted liabilities. We expect this
figure to fall further as we settle the remaining claims.

"This will enable us to pay a higher overall distribution than
projected in the scheme documents, and within a shorter
timescale. When we launched the original scheme in late 1993 we
predicted an average return to creditors of 39 per cent during a
timescale extending beyond 2015.

"In the event, the average distribution in 2004 has risen to 64
per cent and we are hoping to raise the payouts to between 68
per cent and 74 per cent before the end of 2005."

The administrators also predict that creditors will receive a
small ultimate distribution of one or two per cent within the
next two to five years.

The major proportion of insurance cover provided by the KWELM
companies was written between 1972 and 1990. Payment percentages
reflect available assets and estimated ultimate liabilities,
including estimated scheme liabilities and submitted claims,
which have not been agreed, and a provision for administrative
costs and other liabilities. No account is taken of future
investment income, reinsurance recoveries or asset realizations.

For further information, contact:

  Chris Hughes
  Telephone: +44 (0) 20 7398 2900
  E-mail: chris.hughes@kwelm.com

  Chris Reynolds
  Telephone: +44 (0) 20 7645 4990
  E-mail: chris.reynolds@kwelm.com

  Caroline Cecil, Caroline Cecil Associates
  Telephone: +44 (0) 20 7610 4110
  E-mail: cc@carolinececil.co.uk

  KWELM website: www.kwelm.com



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

PETROLEO IPIRANGA: To Recommence Operations in June
---------------------------------------------------
Privately owned refinery Refinaria de Petroleo Ipiranga, which
suspended operations in mid-April, plans to resume activities in
June to take advantage of lower international oil prices, the
company

Business News Americas recalls that the Company stopped refining
operations in mid-April, saying the lack of retail fuel price
adjustments by federal energy company Petrobras were leading to
operating losses since prices of raw materials were being
constantly marked up.

Ipiranga plans to continue talks with Petrobras and the federal
government to create a system that would avoid such losses and
guarantee the financial conditions to avoid stoppages in the
future.

Ipiranga is one of two privately owned refineries in Brazil
accounting for about 2% of total refining output in the country.
Petrobras accounts for the rest and also controls the fuel
retail market.

CONTACT:  REFINARIA DE PETROLEO IPIRANGA
          Rua Eng. Heitor Amaro Barcello
          Centro, Rio Grande
          0096202900 RS
          Investor Relations contact:
             Elizabeth Surreaux Ribeiro Tellechea - IR Director
             Fax: (53) 2338014
             Telephone: (53) 2338001
             Email: esrt@ipiranga.com.br


TELEMAR: To Issue BRL150M Worth of 5-Yr Debentures
--------------------------------------------------
Tele Norte Leste Participacoes SA (Telemar), the largest phone
company in Brazil, announced Wednesday it will issue BRL150
million worth of non-convertible debentures, relates Dow Jones
Newswires. The debentures carry a term of five years and can't
be converted into shares. The issue will be managed by Banco do
Brasil Investimentos.

CONTACT: Tele Norte Leste Participacoes S.A.
         Phone: (212) 815-2921
         Fax: (212) 571-3050
         Web Site: http://www.telemar.com.br/

         Investor Relations
         Email: invest@telemar.com.br
         Roberto Terziani 55 21 3131 1208
         IR Team 55 21 3131 1313 - 1317
         Fax: 55 21 3131 1155

         The Global Consulting Group
         Kevin Kirkeby (kkirkeby@hfgcg.com)
         Tel: 1-646-284-9416
         Fax: 1-646-284-9494



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

PETROECUADOR: Protests Hamper Production
----------------------------------------
State oil producer Petroecuador suffered a significant decline
in production due to protests in the province of Orellana
spread, which began on May 21, says Bloomberg.

On Tuesday, the Company noted a decline of 34,411 barrels in its
output as protesters blocked access to oil facilities, demanding
better roads and health and education centers.

Petroecuador had been producing about 200,000 barrels of oil a
day before the protest. The Company pumps about 40% of the
country's daily oil output of 530,000 barrels. Foreign
companies, which operate fields for Petroecuador, account for
about half of the Company's production.



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

AIR JAMAICA: Reviews Ticket Pricing to Match Rival's
----------------------------------------------------
Spirit Airlines' recent announcement that it will launch non-
stop services between Fort Lauderdale and Montego Bay and
Kingston later this year, offering cheaper flights to those
destinations, has made Air Jamaica rethink about its ticket
pricing, according to Jamaica Gleaner.

As at June 23 to June 30, Air Jamaica charges US$363 plus US$85
in taxes on a round-trip ticket between Kingston and Fort
Lauderdale.

Announcing the new non-stop services between Fort Lauderdale and
Montego Bay and Kingston, starting November 10, and December 15,
respectively, Spirit Airlines projected prices as low as US$99
each way net of tax.

"Spirit has just started to file its fares. Our pricing and
strategy people are constantly reviewing their pricing
initiative and Air Jamaica will react in a timely and
competitive manner,"' said Director of Communications for Air
Jamaica, Sandrea Falconer in an interview with Wednesday
Business.

Miss Falconer said it is too early to tell whether the
competitors will cause a significant falloff in the revenue for
Air Jamaica.

"We wouldn't know until Spirit starts up," she said.

But airline specialist John Gilmore said the Jamaican market
domestically and in South Florida can be expected to respond
dramatically to the new pricing.

"This market has been paying the highest prices in the Caribbean
on the South Florida route on a cents per mile basis for a very
long time," said Mr. Gilmore. "Air Jamaica will have to match
the Spirit fares or its traffic will simply shift to Spirit."
And if it does match the fares, he said, "The revenue
consequences will be severe."

Air Jamaica is a service-oriented passenger airline offering
travelers a level of comfort, convenience and amenities not
commonly found in air travel today. The Air Jamaica fleet is
comprised of new Airbus A320, A321 and A340 aircraft. Air
Jamaica operates 300+ weekly flights between Jamaica and the
Caribbean, the U.S., Canada, and the UK.

CONTACT: Air Jamaica
         Corporate Communications
         Phone: 876-922-3460 ext 4060-5
         Web site: www.airjamaica.com



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

EAGLEPICHER: Gets Extension of Interim DIP Financing Agreement
--------------------------------------------------------------
EaglePicher Holdings, Inc., and EaglePicher Incorporated
(collectively "EaglePicher") announced Wednesday it had received
court approval to extend the use of its interim $50 million
debtor-in-possession (DIP) financing from a bank group led by
Harris Trust and Savings Bank through June 24, 2005. The final
DIP hearing has been rescheduled for June 20, 2005. The Company
required additional time to update its 2005 forecasts and in
turn, give its financial advisors, banks and the unsecured
creditors' committee adequate time to analyze the updates. At
the same time, the Company continues to negotiate a final DIP
loan agreement and intends to present the financing package at
its June 20 hearing.

"The DIP financing agreement and time extension provides
adequate financial resources to fund our post-petition vendor
and employee obligations and other operating requirements while
allowing adequate time for the company to finalize the final DIP
agreement," said Bert Iedema, President and Chief Executive
Officer of EaglePicher.

The Company filed its voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code on April 11, 2005
in the Southern District of Ohio in Cincinnati.

EaglePicher Incorporated, founded in 1843, and headquartered in
Phoenix, Arizona, is a diversified manufacturer and marketer of
innovative, advanced technology and industrial products and
services for space, defense, environmental, automotive, medical,
filtration, pharmaceutical, nuclear power, semi-conductor and
commercial applications worldwide. The company has 4,200
employees and operates more than 30 plants in the U.S., Canada,
Mexico, Korea, and Germany.

EaglePicher Holdings, Inc. is the parent of EaglePicher
Incorporated. EaglePicher(TM) is a trademark of EaglePicher
Incorporated.

CONTACT: EaglePicher Holdings, Inc.
         Anita-Marie Laurie
         Tel: +1-310-788-2850
         URL: http://www.eaglepicher.com


EMPRESAS ICA: Makes $94.9M Debt Payment
---------------------------------------
Empresas ICA, S.A. de C.V. (BMV and NYSE: ICA), the largest
engineering, construction, and procurement company in Mexico,
announced Wednesday that it has paid 100 per cent of its holding
company debt, which totaled the equivalent of US$ 44 million. In
addition, the Company repaid all its debt with the International
Finance Corporation-IFC, which financed the construction of the
Corredor Sur toll road. Repayment was funded using a portion of
the proceeds from the placement of US$ 150 million in structured
notes by ICA Panama.

ICA pre-paid Banamex Ps. 456 million, or US$41.7, million for
long term debt maturing in 2006, as well as outstanding short
term debt. ICA also paid Caterpillar Financial US$ 2 million in
debt. Finally, ICA Panama repaid US$51.2 million from the IFC to
finance the construction of the Corredor Sur toll road.

As a result, ICA has repaid all holding company debt, completing
the corporate financial restructuring process that began in
1999. As of Wednesday, all reported debt of ICA is either
operating subsidiary debt or project finance debt, which has its
own source of repayment. This action improves the Company's
liquidity, and facilitates its ability to invest in new
projects.

ICA was founded in Mexico in 1947. ICA has completed
construction and engineering projects in 21 countries. ICA's
principal business units include civil construction and
industrial construction. Through its subsidiaries, ICA also
develops housing, manages airports, and operates tunnels,
highways, and municipal services under government concession
contracts and/or partial sale of long-term contract rights.

CONTACT: EMPRESAS ICA, S.A. de C.V.
         Ing. Alonso Quintana
         Phone: (5255) 5272-9991 x3468
         Email: alonso.quintana@ica.com.mx

         Lic. Paloma Grediaga
         Phone: (5255) 5272-9991 x3664
         Email: paloma.grediaga@ica.com.mx

         In the United States:
         Zemi Communications
         Daniel Wilson
         Phone: (212) 689-9560
         d.b.m.wilson@zemi.com


GRUPO ELEKTRA: Fitch Affirms International, National Ratings
------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn the 'BB-' international
scale foreign and local currency ratings of Grupo Elektra, S.A.
de C.V. (Elektra). Fitch has withdrawn the ratings in
consistency with Fitch's policies due to the paydown of all of
the company's dollar-denominated bonds. Fitch will no longer
provide international analytical service or coverage to this
issuer. Fitch has also affirmed Elektra's national scale short
term rating of 'F2(mex)' and will continue to follow the company
on the national scale.

Elektra is a specialty retailer of consumer electronics,
appliances, and furniture. At March 31, 2005, it operated the
following store formats in Mexico: Elektra (743 stores); Bodega
de Remates (84 stores); SyR (75 stores); and Elektricity (58
stores). The company also operated 78 Elektra stores in Central
America and Peru. In Mexico, the company offers consumer
financing and other banking services through its subsidiary
Banco Azteca (1,397 branches).


TFM: KCSR Amends Relevant Sections of Supplemental Indentures
-------------------------------------------------------------
Kansas City Southern ("KCS") (NYSE:KSU) announced Wednesday that
its wholly owned subsidiary, The Kansas City Southern Railway
Company ("KCSR"), has amended the proposed amendments and the
relevant sections of the related supplemental indentures
attached as annexes to the Consent Solicitation Statement to
permit TFM, S.A. de C.V. ("TFM"), an indirect subsidiary of KCS,
to incur indebtedness and create related liens in an amount
outstanding at any time of up to $275.0 million, $225.0 million
of which must be incurred by TFM and its restricted subsidiaries
under TFM's senior credit facility or an accounts receivable
securitization; provided however, that prior to the final
settlement of certain disputes between TFM, Grupo Transportacion
Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM"), an indirect
subsidiary of KCS, and the Mexican government, such indebtedness
may not exceed $200.0 million, $150.0 million of which must be
incurred by TFM and its restricted subsidiaries under TFM's
senior credit facility or an accounts receivable securitization.
KCS does not know when or if a settlement of the disputes
between TFM, Grupo TFM and the Mexican government will be
consummated.

Questions from holders of the Notes regarding the consent
solicitation or requests for additional copies of the Consent
Solicitation Statement, the Letter of Consent or other related
documents should be directed to D.F. King & Co., Inc., the
Information Agent for the consent solicitation, at 48 Wall
Street, New York, New York, 10005 (telephone 800-714-3313) or
the Solicitation Agent for the consent solicitation, Morgan
Stanley & Co. Incorporated, at 1585 Broadway, New York, New
York, 10036 (telephone 800-624-1808).

Holders of the Notes may request copies of the supplements, as
amended, to the Indentures by contacting Investor Relations at
the Company at 427 West 12th Street, Kansas City, Missouri,
64105 (telephone 816-983-1551).

This announcement is not a solicitation of consent with respect
to any Notes. The consent solicitation is being made solely by
the Consent Solicitation Statement and related documents, dated
May 11, 2005, which set forth the complete terms of the consent
solicitation.

Headquartered in Kansas City, Mo., KCS is a transportation
holding company that has railroad investments in the U.S.,
Mexico and Panama. Its primary U.S. holdings include The Kansas
City Southern Railway Company, founded in 1887, and The Texas-
Mexican Railway Company, founded in 1885, serving the central
and south central U.S. Its international holdings include a
controlling interest in TFM, S.A. de C.V., serving northeastern
and central Mexico and the port cities of Lazaro Cardenas,
Tampico and Veracruz, and a 50% interest in The Panama Canal
Railway Company, providing ocean-to-ocean freight and passenger
service along the Panama Canal. KCS's North American rail
holdings and strategic alliances are primary components of a
NAFTA Railway system, linking the commercial and industrial
centers of the U.S., Canada and Mexico.



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

* PARAGUAY: Minister, BCP Pres. Seek New Agreement With IMF
-----------------------------------------------------------
Paraguay's new finance minister, Ernst Bergen and the president
of the BCP [Paraguayan Central Bank], Monica Perez, are seeking
a new agreement with the International Monetary Fund (IMF) that
will enable them to protect themselves from the political
pressures and assure the maintenance of fiscal and monetary
discipline, according to local newspaper ABC Color web site.

In an interview with the paper, Bergen said that, if the
intention is to create an economic "bubble" in accord with the
political objectives, they were certainly mistaken. He insisted
that he will aim at stimulating the private sector to generate
jobs.

Bergen assured he will not tolerate any plan that would entail
the massive injection of public money to generate an economic
recovery. He added that jobs cannot be created by enlarging the
state, and that it would be appropriate if that were the result
of a reaction from the private sector.

He announced that they will negotiate a new agreement with the
IMF starting in July, for the purpose of giving investors a
greater guarantee of the continuity of the public policies, and
as protection for the new members of the economic cabinet. He
dispelled doubts about the immediate future of the economic
policy.



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

DORAL FINANCIAL: To Delist Preferred Stock Listed on Nasdaq
-----------------------------------------------------------
Doral Financial Corporation (NYSE: DRL) announced Wednesday that
on May 19, 2005 it received a notification from The Nasdaq Stock
Market Listing Qualifications Department stating that the
Company was not in compliance with the reporting requirements
for continued listing set forth in Nasdaq Marketplace Rule
4310(c)(14) and that as a result the Company's 7% Noncumulative
Monthly Income Preferred Stock, Series A, 8.35% Noncumulative
Monthly Income Preferred Stock, Series B and 7.25% Noncumulative
Monthly Income Preferred Stock, Series C (collectively, the
"Preferred Stock") are subject to delisting from The Nasdaq
Stock Market (the "Nasdaq") as of May 31, 2005 unless the
Company requests a hearing in accordance with the Nasdaq's
Marketplace Rule 4800 Series. As previously disclosed, the
Company failed to timely file its quarterly report on Form 10-Q
for the fiscal quarter ended March 31, 2005. As a result of the
Company's failure to file this report, effective May 23, 2005,
Nasdaq changed the trading symbol for the Preferred Stock from
"DORLP," "DORLO" and "DORLN" to "DRLPE," "DRLOE" and "DRLNE,"
respectively.

The Company has requested a hearing before a Nasdaq Listing
Qualification Panel pursuant to the procedures set forth in
Nasdaq Marketplace Rule 4800 Series. The Preferred Stock will
remain listed pending the hearing and the determination of the
Nasdaq Listing Qualifications Panel. There can be no assurance
that the Nasdaq Listing Qualifications Panel will grant the
Company's request for continued listing.

The Company is working diligently to complete the previously
announced restatement of its financial statements for one or
more of the periods ending on or prior to December 31, 2004 and
to become current in its filings with the Securities and
Exchange Commission.

The Company, a financial holding company, is the largest
residential mortgage lender in Puerto Rico, and the parent
company of Doral Bank, a Puerto Rico based commercial bank,
Doral Securities, a Puerto Rico based investment banking and
institutional brokerage firm, Doral Insurance Agency, Inc. and
Doral Bank FSB, a federal savings bank based in New York City.

CONTACT:  DORAL FINANCIAL CORPORATION
          Salomon Levis, 787-474-1111
                    or
          Ricardo Melendez, 787-474-1111



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

CITGO: Ministry Conducts Study to Recoup Excess Tax Payments
------------------------------------------------------------
Venezuela's oil ministry is currently examining the amount of
taxes Citgo has paid to U.S. tax authorities since 1999 as part
of an attempt to recover excess payments, Dow Jones Newswires
reports, citing Oil Minister Rafael Ramirez.

The study "opens up the possibility that Citgo recovers, at
least partly, the excess taxes paid during the last six years -
all under the double taxation agreement signed between Venezuela
and the U.S.," Ramirez said.

Ramirez also claims that Citgo, owned by state oil company
Petroleos de Venezuela (PdVSA), has been selling oil and refined
gasoline in the U.S. at discounted prices for years.

Government officials have said they are looking to change
standing Citgo contracts to make them more beneficial for the
Andean country.


PDVSA: Ramirez Testifies Before National Assembly
-------------------------------------------------
The Minister of Energy and Petroleum and CEO of PDVSA, Rafael
Ramirez Carreno, appeared before the National Assembly on
Wednesday to give testimony to the Special Commission
responsible for investigating irregularities reported by the
Ministry of Energy and Petroleum with respect to the formulation
and execution of operative agreements, strategic associations
and internationalization businesses from 1992 to 1997, a period
known as "Apertura Petrolera" (oil opening process).

During his appearance, minister Ramirez assured that "through
the Apertura Petrolera of the 90's, Venezuelan oil received a
serious attack." An attack which, on his words, was "coordinated
by some international agencies belonging to our costumers and
the already known big transnational, which together with oil
meritocracy, oligarchy and political representatives conspired
against the Venezuelan State to cause its destruction."

The Minister was determined when pointed out that events
happened during the so-called "Apertura Petrolera" were not
isolated and unforeseeable; instead, it represented a strategy
implemented since nationalization itself, which looked forward
mostly to get and control PDVSA by transnational interests; to
minimize the value of our resources; to evade control of the
State and its agencies to, then, lead to an open and direct
confrontation against the Nation."

It was a "well planned and designed" strategy whereby Petr¢leos
de Venezuela (PDVSA) was given the role of a Trojan horse; a
role willingly assumed by a meritocracy surrounded to
transnational interests," Ramirez said.

The core of the oil opening can be easily regarded as: the
globalization of the natural resource; oil would have not
belonged to Venezuela anymore but it would have been available
to the management of powerful "consumer countries".

The CEO of PDVSA highlighted that "by means of the oil opening,
transnational capitals intended to expropriate from the
Venezuelan people the handling and sovereign use of our main
resource: oil."

CONTACT: Petroleos de Venezuela S.A.
         Edificio Petroleos de Venezuela
         Avenida Libertador, La Campina, Apartado 169
         Caracas, 1010-A, Venezuela
         Phone: +58-212-708-4111
         Fax: +58-212-708-4661
         Web site: http://www.pdvsa.com.ve


PDVSA: Jointly Evaluates Business Possibility With Lukoil
---------------------------------------------------------
In a recent visit to Caracas President of Russian oil company
LUKOIL Vagit Alekperov met with Minister of Energy and
Petroleum, and President of Petroleos de Venezuela S.A. (PDVSA)
Rafael Ramirez.

Within a framework of negotiations, the parties discussed the
implementation of a Memorandum of Understanding executed between
LUKOIL and PDVSA in November 2004. The document states PDVSA's
intent to submit to LUKOIL for analysis and eventual joint
execution new production and exploration projects in the Orinoco
oil belt in the Gulf of Venezuela, as well as mature reservoir
workover projects and likely refining projects.

In April this year, LUKOIL submitted an application to
participate in the Rafael Urdaneta project bidding process
(offshore natural gas block development). Other promising joint
projects are also being considered.

In connection with Vagit Alekperov's visit, a social project to
implement a mobile medical care system in the Orinoco river
delta, in Delta Amacuro State, was presented. This project is
financed by LUKOIL and supported by PDVSA, a number of
ministries, and the Delta Amacuro government and communities.

Moreover, 9 boat-ambulances were repaired for community use (one
catamaran capable of executing operations, mid-size boat-
ambulances and small watercrafts to access the delta channels).
This boat fleet is provided with radios, medical equipment and
the required medical supplies.

Vessels were repaired in shipyards located in the cities of
Tucupita and Puerto Ordaz. Each boat was assigned to one town in
the Orinoco Delta for their maintenance and use. The boats will
be used to provide mobile medical care to the indigenous
communities of the Warao, and other populations in the region.
In addition to providing medical assistance directly "on board",
the boats will serve to link major hospitals on land with small
health care centers under the Barrio Adentro mission.


SINCOR: Oil Ministry to Impose 30% Royalty Tax on Output
--------------------------------------------------------
Oil Minister Rafael Ramirez revealed Wednesday that the
government will impose a higher royalty tax on heavy crude-
upgrading project Sincor SA because it violated standing oil
agreements.

"Sincor will pay a 30% (royalty) for every extra barrel it is
producing" in excess of the 114,000-barrel-a-day threshold,
Ramirez said during a speech before members of Venezuela 's
Congress.

Sincor, made up of France's Total (47%), Norway's Statoil ASA
(11%) and Petroleos de Venezuela (PDVSA)(42%), is currently
producing about 210,000 barrels per day, almost double its
authorized quota of 114,000 barrels per day, Ramirez said.

It was pumping crude from an area in the huge Orinoco oil belt
larger than the 250 square kilometers it had been awarded
originally, Ramirez added.

The oil ministry is working on measures to increase the royalty
payments to 30%, up from the 16.6% royalty charged to all heavy
crude upgrading projects in Orinoco region, said Ramirez.

The four upgrading projects based in the area - Cerro Negro,
Petrozuata, Sincor and Hamaca - produce more than 600,000
barrels of crude a day, according to government data.

Ramirez has said that previous administrations of PdVSA allowed
foreign companies to pump more oil and adjusted contracts
without approval from Congress.

The government has said foreign oil companies owe as much as
US$3 billion in unpaid back taxes and more than US$1 billion in
royalty payments.


                            ***********


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
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
Sheryl Joy P. Olano, Editors.

Copyright 2005.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
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.


* * * End of Transmission * * *