TCRLA_Public/050610.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, June 10, 2005, Vol. 6, Issue 114

                            Headlines


A R G E N T I N A

AQUAPARK S.A.: Deadline for General Report Set
BERSA: Auction Draws Three Bidders
ESTUDIANTINA S.A.: Reorganization Proceeds To Bankruptcy
HB COMUNICACIONES: Individual Reports Due in Court on August 2
HELY S.A.: Court Appoints Trustee for Reorganization

INGEOMA S.A.: Gets Permission to Begin Reorganization
INTECEL S.A.: Gears for Reorganization
INTERNATIONAL CENTER: Verification Deadline Approaches
JORDAN COMUNICACIONES: Court Designates Trustee for Liquidation
LAMINOID S.A.: Court Orders Liquidation

MAILNET: Initiates Bankruptcy Proceedings
MARINA PROPIEDADES: Files Petition to Undergo Reorganization
MATAFUEGOS CUENCA: Files Petition to Reorganize
MATTULICH S.A.I.C.: Court Approves Concurso Motion
SOCIEDAD COMERCIALIZADORA: Court OKs Creditor's Bankruptcy Call


B E R M U D A

LOM HOLDINGS: Withdraws From OTC Markets


B R A Z I L

BANCO BMG: Moody's Assigns B1 Rating to Senior Unsecured Notes
CONSTRUTORA NORBERTO: S&P Affirms Ratings
CSN: Calls Shareholders to a Meeting
CSN: Schedules Meeting to Amend Company Bylaws
PARANAPANEMA: Shares to Undergo 2,000:1 Reverse Split

VARIG: ILFC to Take Back 11 Jets on Failure to Keep Up Payments


C H I L E

CELCO: Shuts Down Pulp Plant Amid Government Inquiry
MANQUEHUE NET: To be Acquired by GTD Teleductos


D O M I N I C A N   R E P U B L I C

AES DOMINICANA: Venezuelan Exec. Becomes Unit President


M E X I C O

AOL LATIN AMERICA: Time Warner Agrees to Support Liquidation
CIE: Places $200M Notes Due 2015
DIRECTV GROUP: Plans to Raise $1B in Senior Notes
IKON OFFICE: Moody's Changes Outlook to Negative From Stable
TFM: KCS Announces Amendments to KCSR Consent Solicitation


P E R U

* PERU: External Debt Burden Constrains Rating, Outlook - Moodys


P U E R T O   R I C O

R&G FINANCIAL: Murray, Frank Files Class Action Suit


T R I N I D A D   &   T O B A G O

BWIA: To Halt Flights to Scotland, Ireland


U R U G U A Y

* URUGUAY: IMF Executive Board OKs $1.13B Stand-By Arrangement


V E N E Z U E L A

PDVSA: In Discussions With Brazil's Petrobras to Import Ethanol

     -  -  -  -  -  -  -  -


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

AQUAPARK S.A.: Deadline for General Report Set
----------------------------------------------
Mendoza-based accountant Enrique Romero, the court-designated
trustee for the reorganization of Aquapark S.A., will submit a
general report to the city's civil and commercial Court No. 1 on
Aug. 26, 2005. The general report will contain the Company's
audited accounting and business records as well as the summary
of important events pertaining to the reorganization.

Mr. Romero verified creditors' claims until May 18, 2005. The
validated claims will be presented in court as individual
reports on July 1, 2005.

An Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled for Feb. 27, 2006.

Clerk No. 1 assists the court on this case.

CONTACT: Aquapark S.A.
         Las Canas 1833
         Guaymallen (Mendoza)

         Enrique Romero, TRUSTEE
         San Martin 1425
         Mendoza


BERSA: Auction Draws Three Bidders
----------------------------------
Out of the seven locally-owned banks that purchased the bidding
rules for the auction of Banco de Entre Rios (BERSA), only three
have presented their bids, a spokesperson at federal bank Banco
Nacion confirmed to Business News Americas.

The three banks are Banco de Santiago del Estero, Nuevo Banco de
Santa Fe and Comafi. Their bids will be studied by a committee
composed by Argentina's economy ministry and Banco Nacion
executives, "and the final decision will be announced after
studying not only the financial proposal, but the banks'
solvency and other data," the spokesperson said.

The announcement of the winner is scheduled for June 15.

The other four banks that had purchased the bidding rules for
the BERSA auction but did not present bids are Banco de Galicia,
Macro Bansud, Banco Hipotecario, and Credicoop.

French banking giant Credit Agricole left Argentina in the midst
of the country's economic and financial crisis in 2002 and left
behind three subsidiaries, BERSA, Suquia and Bisel. The three
were taken over for the purpose of selling them back to the
private sector at a later stage. Suquia was auctioned last year
and the Bisel auction could take place this year.


ESTUDIANTINA S.A.: Reorganization Proceeds To Bankruptcy
--------------------------------------------------------
The reorganization of Estudiantina S.A. has progressed into
bankruptcy. Argentine news source Infobae relates that Mar del
Plata civil and commercial Court No. 12 ruled that the Company
is "Quiebra Decretada".

The report adds that the court assigned Rodolfo Damaso Crespi as
trustee, who will verify creditors' proofs of claim until Aug.
1, 2005.

The court also ordered the trustee to prepare individual reports
after the verification process is completed. A general report on
the bankruptcy process will then follow.

CONTACT: Estudiantina S.A.
         Saavedra 3125
         Mar del Plata

         Rodolfo Damaso Crespi, TRUSTEE
         Ortiz de Zarate 6450
         Mar del Plata


HB COMUNICACIONES: Individual Reports Due in Court on August 2
--------------------------------------------------------------
Mr. Roberto Gilli, the trustee appointed to oversee the
bankruptcy proceedings of HB Comunicaciones S.R.L. is due to
submit the validated individual claims for court approval on
Aug. 2, 2005.

These reports explain the basis for the accepted and rejected
claims. The trustee will also submit a general report of the
case on Sep. 14, 2005.

Infobae reports that HB Comunicaciones S.R.L. entered bankruptcy
protection after Court No. 8 of San Isidro's civil and
commercial tribunal, with the assistance of Clerk No. 12,
declared the Company "Quiebra."

CONTACT: HB Comunicaciones S.R.L.
         Ingeniero Marconi 3365
         Beccar (Partido de San Isidro)

         Mr. Roberto Gilli, Trustee
         Rivadavia 479
         San Isidro


HELY S.A.: Court Appoints Trustee for Reorganization
----------------------------------------------------
Buenos Aires Court No. 12 has granted local company Hely S.A.
approval to start its reorganization process, appointing Mr.
Juan Angel Fontecha as trustee.

An Infobae report states that Mr. Fontecha will verify creditors
claims until Aug. 8, 2005. Afterwards, he will present these
claims as individual reports for final review by the court on
Sep. 19, 2005. The trustee will also provide the court with a
general report pertaining to Hely's reorganization on Oct. 31,
2005.

The court, which is aided by Clerk No. 24 on this case, has
scheduled the informative assembly for April 27, 2006.

CONTACT: Mr. Juan Angel Fontecha, TRUSTEE
         Parana 785
         Buenos Aires


INGEOMA S.A.: Gets Permission to Begin Reorganization
-----------------------------------------------------
Court No. 1 of Buenos Aires' civil and commercial tribunal
approved a petition for reorganization filed by Ingeoma S.A.,
reveals La Nacion.

Mr. Ricardo Adrogue, whom the court appointed as trustee, will
verify creditors' proofs of claim until Sep. 2, 2005. After the
verification period, the trustee will submit the individual and
general reports to court. Dates for submission of these reports
are yet to be disclosed.

The informative assembly, at which creditors will vote to ratify
the completed settlement plan, is scheduled for April 25, 2006.

The city's Clerk No. 21 assists the court on the case.

CONTACT: Ingeoma S.A.
         Avenida del Libertador 828
         Buenos Aires

         Ricardo Adrogue, TRUSTEE
         Bouchart 468
         Buenos Aires


INTECEL S.A.: Gears for Reorganization
--------------------------------------
Buenos Aires' civil and commercial Judge No. 10, with assistance
from Clerk No. 19, issued a resolution opening the
reorganization of Intecel S.A. This pronouncement authorizes the
Company to begin drafting a settlement proposal with its
creditors in order to avoid liquidation. The reorganization
allows Intecel to retain control of its assets subject to
certain conditions imposed by Argentine law and the oversight of
the court appointed trustee.

Mr. Jorge Daniel Alvarez will serve as trustee during the course
of the reorganization. He will be validating creditors' proofs
of claim until Sep. 14, 2005. The results of the verification
will be presented in court as individual reports on Oct. 27,
2005. The trustee is also obligated to give the court a general
report of the case on Dec. 9, 2005. The general report
summarizes events relevant to the reorganization and provides an
audit of the Company's accounting and business records.

Mr. Alvarez will present the completed settlement proposal to
its creditors during the informative assembly scheduled on Aug.
18, 2006.

CONTACT: Intecel S.A.
         Chile 577
         Buenos Aires

         Jorge Daniel Alvarez, TRUSTEE
         Bartolome Mitre 1738
         Buenos Aires


INTERNATIONAL CENTER: Verification Deadline Approaches
------------------------------------------------------
The verification of claims for the International Center Food
S.A. bankruptcy will end on July 7, 2005 according to Infobae.
Creditors with claims against the bankrupt company must present
proof of the liabilities to Nestor A. Iribe, the court-appointed
trustee, before the deadline.

Buenos Aires Court No. 4 handles the Company's case with the
assistance of Clerk No. 7. The bankruptcy will conclude with the
liquidation of the Company's assets to pay its creditors.

CONTACT: Nestor A. Iribe, TRUSTEE
         Avda Corrientes 1250
         Buenos Aires


JORDAN COMUNICACIONES: Court Designates Trustee for Liquidation
---------------------------------------------------------------
Buenos Aires' accountant Norberto Volpe was assigned trustee in
the liquidation of local company Jordan Comunicaciones S.A.,
relates Infobae.

Mr. Volpe will verify creditors' claims until Sep. 12, 2005, the
source adds. After that, he will prepare the individual reports,
which are to be submitted to court on Oct. 27, 2005. The
submission of the general report should follow on Dec. 19, 2005.

The city's civil and commercial Court No. 9 handles the
Company's case with assistance from Clerk No. 17.

CONTACT: Norberto Volpe, TRUSTEE
         Maipu 859
         Buenos Aires


LAMINOID S.A.: Court Orders Liquidation
---------------------------------------
Laminoid S.A. prepares to wind-up its operations following the
bankruptcy pronouncement issued by Court No. 22 of Buenos Aires'
civil and commercial tribunal. The declaration effectively
prohibits the Company from administering its assets, control of
which will be transferred to a court-appointed trustee.

Infobae reports that the court appointed Ms. Adriana Isabel
Rinaldi as trustee, who will be reviewing creditors' proofs of
claim until Aug. 22, 2005. The verified claims will serve as
basis for the individual reports to be presented for court
approval on Oct. 3, 2005. The trustee will also submit a general
report of the case on Nov. 15, 2005.

Clerk No. 44 assists the court on this case that will end with
the sale of the Company's assets. Proceeds from the sale will be
used to repay debts.

CONTACT:  Ms. Adriana Isabel Rinaldi, TRUSTEE
          Dorrego 2789
          Buenos Aires


MAILNET: Initiates Bankruptcy Proceedings
-----------------------------------------
Court No. 19 of Buenos Aires' civil and commercial tribunal
declared Mailnet de Argentina S.A. "Quiebra," reports Infobae.
Clerk No. 37 assists the court on the case, which will close
with the liquidation of the Company's assets to repay creditors.

Mr. Francisco R. Cano, whom the court appointed as trustee in
the case, will verify creditors' claims until July 7, 2005 and
then prepare the individual reports based on the results of the
verification process.

The individual reports will then be submitted to court on Aug.
31, 2005, followed by the general report on Oct. 11, 2005.

CONTACT: Mr. Francisco R. Cano, Trustee
         Uruguay 618
         Buenos Aires


MARINA PROPIEDADES: Files Petition to Undergo Reorganization
------------------------------------------------------------
Court No. 24 of Buenos Aires' civil and commercial tribunal is
now analyzing whether to grant Marina Propiedades S.A. approval
for its petition to reorganize. La Nacion recalls that the
Company filed its petition following cessation of debt payments
since June 2003. Clerk No. 48 is assisting the court on the
Company's case.

CONTACT: Marina Propiedades S.A.
         25 de Mayo 252
         Establecimiento en Maipu 271
         Cordoba


MATAFUEGOS CUENCA: Files Petition to Reorganize
-----------------------------------------------
Matafuegos Cuenca S.A. has filed a "Concurso Preventivo" motion,
reports La Nacion. The Company is seeking to reorganize its
finances following cessation of debt payments since April 12,
2005. The Company's case is pending before Buenos Aires' civil
and commercial Court No. 1, who is assisted by Clerk No. 2.

CONTACT: Matafuegos Cuenca S.A.
         Avenida Alvarez Jonte 5145
         Buenos Aires


MATTULICH S.A.I.C.: Court Approves Concurso Motion
--------------------------------------------------
Buenos Aires' civil and commercial Court No. 5 approved a
petition for reorganization filed by Mattulich S.A.I.C.,
according to a report by Argentine daily La Nacion.

The Company, which listed assets of $40,123.45 and liabilities
of $280,480.77, will undergo a reorganization process with Elida
A. Vitorero as trustee.

Ms. Vitorero will verify claims until Aug. 16, 2005. After
verifying the claims, she will then submit the individual and
general reports to court. Dates for submission of these reports
are yet to be disclosed.

The informative assembly, the last part of the reorganization
process, will be held on May 10, 2006.

Clerk No. 9 assists the court on the case.

CONTACT: Mattulich S.A.I.C.
         Fernando de Montalvo 158
         Buenos Aires

         Elida A. Vitorero, TRUSTEE
         Migueletes 1806
         Buenos Aires


SOCIEDAD COMERCIALIZADORA: Court OKs Creditor's Bankruptcy Call
---------------------------------------------------------------
Sociedad Comercializadora de Carnes S.A. entered bankruptcy
after Court No. 5 of Buenos Aires' civil and commercial tribunal
approved a bankruptcy motion filed by Caprevielle, Kay y Cia.
Sacfm, reports La Nacion. Sociedad Comercializadora's failure to
pay $5,832.44 in debt prompted Caprevielle, Kay y Cia. Sacfm to
file the petition.

Working with the city's Clerk No. 10, the court assigned Ms.
Monica Aquim 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. 4, 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: Sociedad Comercializadora de Carnes S.A.
         Rivadavia 1273
         Buenos Aires

         Monica Aquim, TRUSTEE
         Uruguay 662
         Buenos Aires



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

LOM HOLDINGS: Withdraws From OTC Markets
----------------------------------------
The Board of Directors and management of LOM Holdings Limited
have decided that effective 30th June 2005 LOM will dramatically
curtail client activity in the US bulletin board and pink sheet
over-the-counter markets.  LOM has, over the past several years
encountered increasing scrutiny and negative publicity from this
one area of our business in particular - the U.S. OTC Bulletin
Board market.

This is the market that trades the most junior U.S. securities
and involves micro cap stocks.  It's fraught with risks and has
become very difficult from a risk management perspective.  In
addition, the market is regulated in such a way that LOM, as
agent in a transaction, is at risk from any wrongdoing or
alleged wrongdoing by our customers, despite having met all the
relevant regulations required of us in our jurisdictions.

LOM recognizes the need for change to ensure customers do not
breach enormously complex regulations, which have become
increasingly tough and excessively risky.

As a result, the brokerage subsidiaries of the LOM Group will
dramatically restrict dealing in the U.S. OTC Bulletin Board
market effective Thursday, 30th June.  The only exception to
this will be where the client is well known to the group and
where the OTC portion of their transactions form only a small
percentage of the whole portfolio and even then there will be
restrictions on the manner in which such transactions are
executed.

All other business will continue as usual uninterrupted.

It is with regret to our loyal clients that LOM has decided to
drastically curtail activity in this area.  Customers will no
longer be able to deliver OTC securities into their accounts at
LOM, nor will they be able to deliver securities to any third
party account internally or externally.  Customers who hold OTC
securities at LOM may sell those securities or alternatively
deliver them out to the organization from which they were
received in the same manner as such securities were delivered to
us.

LOM regrets withdrawing from any market and we will suffer an
adverse financial impact as a result.  However, we recognize
that although we have been fighting regulatory battles on
principle, it is a war that is being lost at significant cost to
us - both from a financial and reputational perspective; and we
respect this reality.

We're rolling up our sleeves and working hard to get LOM firmly
back on target.  Removing this piece of the business will enable
the other successful areas of the business to flourish
untarnished by the negative publicity trading in the over the
counter market has attracted.



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

BANCO BMG: Moody's Assigns B1 Rating to Senior Unsecured Notes
--------------------------------------------------------------
Moody's Investors Service assigned a B1 long-term foreign
currency rating to Banco BMG S.A.'s US$150,000,000 senior
unsecured notes. The outlook on the rating is positive.

Moody's stated that the B1 rating incorporates Banco BMG's
fundamental credit quality, which is reflected by its Ba3 global
local-currency deposit rating and which includes all relevant
country risks. The B1 rating also incorporates the probability
of a sovereign default implied by the Brazilian government's
sub-investment-grade B1 foreign currency bond rating, as well as
the likelihood that the Brazilian government could impose a debt
moratorium in the event of default on its own foreign currency
obligations.

Moody's noted that the rating also addresses the risk that any
such moratorium might include foreign currency bonds and that
BMG's bonds might particularly be affected. Because the banking
system is an arm of the government's monetary and foreign
exchange policy, Moody's believes that, in general, banks may
have a lower probability of having their bonds exempted from a
moratorium than, say, a major commodity exporter would. The
rating, therefore, indicates the joint probabilities of default
that are contained in the B1 foreign currency ceiling and in the
local currency rating of Banco BMG.

Moody's has recently assigned a D- bank financial strength
rating to Banco BMG, as well as a Ba3 global local-currency
rating. The ratings reflect the bank's track record of adequate
profitability and efficiency ratios, which compare well with
peers', and which reflect BMG's niche business strategy centered
in consumer lending. The bank's core earnings are solid, and
they are indicative of high margins in its core product, as well
as of a lean operating structure, also supported by adequate
asset quality.

Banco BMG is headquartered in Minas Gerais, Brazil and had R$3
billion (approximately US$1.1 billion) in total assets as of
March 2005.

The following rating was assigned to Banco BMG S.A.'s notes:

Banco BMG S.A.: B1 long-term foreign-currency debt rating,
positive outlook.


CONSTRUTORA NORBERTO: S&P Affirms Ratings
-----------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' local- and
foreign-currency corporate credit ratings on Construtora
Norberto Odebrecht S.A. (CNO). The outlook is stable.

The local-currency rating on CNO reflects the company's exposure
to the competitive, volatile, and cyclical heavy engineering and
construction (E&C) business, some backlog concentration in
public works in economically and politically volatile countries,
and a somewhat leveraged financial profile," said Standard &
Poor's credit analyst Reginaldo Takara. "These risks are
somewhat offset by CNO's long-standing experience in the E&C
business, the quality and sector and geographic diversification
of its backlog, and consistent profitability and cash flow
protection measures within the past several years as a result of
significant efforts to focus on more profitable projects."

CNO is the largest heavy construction company in Brazil, with
sales and EBITDA of $2.2 billion and $152 million in the last 12
months ended March 31, 2005. The company reported a total debt
balance of $500 million on the same date.

The stable outlook for the local currency rating reflects our
expectations that CNO's financial ratios will continue to
improve through 2005 with further debt reduction, allowing for
credit measures to comfortably fall into its current rating
category. Reducing refinancing risks thanks to debt repayment
and a committed credit line that goes over 2006 are also short-
term positives. We foresee positive trends for CNO's operating
performance in 2005 and 2006, with the recovery of Brazilian
projects, stable margins in its traditional markets in South
America and Angola, and increasing activity in the U.S.,
Portugal, and Mexico, but a positive revision of the ratings
would depend on significant improvement on credit measures,
essentially with an overall lower debt position relative to
long-term cash flows. A reversal in trends would first be
signaled by a deterioration in backlog; harsher changes in
profitability trends and cash generation would also be reasons
for the ratings to stabilize or be revised negatively. The
stable outlook for the foreign currency rating reflects that of
the foreign currency sovereign rating of the Federative Republic
of Brazil.


CSN: Calls Shareholders to a Meeting
------------------------------------
The Shareholders of COMPANHIA SIDERURGICA NACIONAL are, hereby,
invited to attend the Special Meeting, to be held on June 23,
2005, at 11 a.m., at the head offices of the Company, located at
Rua Sao Jose n§ 20 - Grupo 1602, Centro, Rio de Janeiro - RJ, in
order to decide about the following Agenda:

1. Cancellation of 14,849,099 shares currently held in treasury,
without corporate capital reduction;

2. Amendment to Article 5 and 7 of the By-laws of the Company,
in order to reflect the cancellation of the shares mentioned in
item 1 above.

The documentation related to the matter contained in the Agenda
will be available for analysis of the Shareholders at the head
offices of the Company.

The Shareholders, whose shares are held in custody, are
requested to present updated extract provided by the custodian
entity, with the respective shareholding participation, and
those who intend to be represented by attorney-in-fact are
requested to comply with the provisions of Article 126,
Paragraph 1 st, of Law 6,404/76, with the deposit at the head
offices of the Company of the powers-of-attorney with specific
powers for representation at the Special Meeting referred in
this notice of call, within three (3) working days prior to the
date determined for its holding.

CONTACT: Mr. Marcos Leite Ferreira
         CSN - Investor Relations
         Phone: (55 11) 3049-7591
         E-mail: marcos.ferreira@csn.com.br
         Web site: http://www.csn.com.br/


CSN: Schedules Meeting to Amend Company Bylaws
----------------------------------------------
The Shareholders of COMPANHIA SIDERURGICA NACIONAL are invited
to attend the Special Meeting, to be held, in second call, on
June 23, 2005, at 10 a.m., at the head offices of the Company,
located at Rua Sao Jose n§ 20 - Grupo 1602, Centro, Rio de
Janeiro - RJ, in order to decide about the following Agenda:

1. Amend the Bylaws of the Company with the purpose of creating
the Audit Committee.

According to the provisions of Article 135 of Law 6,404/76, the
meeting will be installed, in this second call, upon the
presence of any number of shareholders.

The documentation related to the matter contained in the Agenda
will be available for analysis of the Shareholders at the head
offices of the Company.

The Shareholders, whose shares are under custody, are requested
to present updated extract provided by the custodian entity,
with the respective shareholding participation, and those who
intend to be represented by attorney-in-fact are requested to
comply with the provisions of Article 126, Paragraph 1 st , of
Law 6,404/76, with the deposit at the head offices of the
Company of the powers-of-attorney with specific powers for
representation at the Special Meeting referred in this notice of
call, three (3) working days prior to the date determined for
its holding.


PARANAPANEMA: Shares to Undergo 2,000:1 Reverse Split
-----------------------------------------------------
Sao Paulo-based mining and metals holding company Paranapanema
announced its shares will be subject to a reverse split
effective June 14 as part of the standardization efforts by the
Bovespa stock exchange, relates Business News Americas.

Shares will be subject to a ratio of 2,000:1, Paranapanema said,
adding that the shares will be negotiated in standard lot sizes
of 100 shares on the Bovespa.

Shares not subject to the reverse split will be valid until June
13, according to stock clearing firm SSE Itau.

The 2,000:1 ratio was decided to be an optimal one for
shareholders allowing smaller investors to maintain positions in
the Company.

Remaining fractional shares will be sold at auction on the
Bovespa and distributed proportionally to shareholders.

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: ILFC to Take Back 11 Jets on Failure to Keep Up Payments
---------------------------------------------------------------
The International Lease Finance Corporation (ILFC), the aircraft
leasing unit of American International Group Inc., ordered
Brazilian debt-ridden airline Varig to return 11 Boeing jets.

The ILFC told Varig to return five Boeing 737s, four Boeing 757s
and two Boeing 777s, some of which are used on international
flights, because it hasn't kept up payments.

"We are still negotiating with them as they are being paid late.
This type of threat is permanent and is part of the game," David
Zylbersztajn, Varig's board president, said, adding that ILFC
had not yet sought the legal seizure of the planes.

Varig has suffered severe financial problems since the airline
industry was hit by a recession in 2001. It has struggled to
service net debts estimated at more than BRL6 billion.

Just recently, Varig signed an agreement to allow Portugal's TAP
Air Portugal to acquire about 20% of its stock, an alliance that
falls short of a merger. But analysts say the debt issues still
must be resolved.

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

CELCO: Shuts Down Pulp Plant Amid Government Inquiry
----------------------------------------------------
Pulp producer Celco informed the SVS securities regulator of its
decision to indefinitely shut down its Valdivia pulp plant,
relates Business News Americas.

The measure follows questioning from government and legislative
figures for having allegedly filed false environmental studies
on the supposed contamination of Cruces river from discharges
from its plant in Region X.

"Celco cannot operate with this degree of uncertainty. We trust
that closing the plant down will contribute to a serene and
objective analysis that will provide scientific evidence over
Cruces' river contamination," Celco chair Alberto Etchegaray was
quoted as saying.

In line with the decision, the Company has also appointed a new
general manager and director for the Company, said Matias
Domeyko Cassel, who previously was the Company's financial
manager.


MANQUEHUE NET: To be Acquired by GTD Teleductos
-----------------------------------------------
Corporate services provider GTD Teleductos has agreed to buy
100% of telephony and broadband provider Manquehue Net in an
operation that is expected to be concluded as early as this week
or next, reports Business News Americas.

GTD has agreed to pay US$32 million for Manquehue's assets as
well as pay off Manquehue's debt totaling US$85 million.

Margarita Andrade, of Chilean credit ratings agency Humphreys,
believes GTD's acquisition will lead to a favorable result.

"Manquehue net has gone through several changes in the last few
years and is just now starting a period with positive financial
results. So obviously a change in controllers is positive
because it should lead the company to a more stable path,"
Andrade said.

Manquehue, which has been in the red since it was launched in
2000, expects to report profits this year, saying it will focus
on providing broadband service, the only business area that has
recorded positive growth with a client base of 15,000
connections.

"Closing this year in the black is independent of the change in
ownership, because it has more to do with management, which has
certainly performed well," Andrade added.

Manquehue offers fixed line telephony services and Internet
access to the corporate and residential segments in Chile's
metropolitan region, with 100,000 clients and a 2.7% market
share.

The Company is currently owned by gas distribution firm Metrogas
(25.54%), US telecoms holding company Williams International
Telecom (23.52%), Capital Trust (19.14%), Chile's Rabat family
(19.13%) and Xycom Devel Chile (12.67%).



===================================
D O M I N I C A N   R E P U B L I C
===================================

AES DOMINICANA: Venezuelan Exec. Becomes Unit President
-------------------------------------------------------
AES Dominicana, the local subsidiary of U.S. power company AES
Corp. (NYSE: AES), will have a new president in the person of
Venezuelan Manuel Perez Dubuc.

According to Business News Americas, Perez Dubuc's position as
vice-president of finance at Caracas-based AES subsidiary EDC
will be assumed by Diego Garcia, who is currently head of the
treasury office.

"Both promotions reflect the achievements of the finance team at
EDC," EDC said in a statement.



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

AOL LATIN AMERICA: Time Warner Agrees to Support Liquidation
------------------------------------------------------------
Time Warner Inc., a Delaware corporation that was formerly named
AOL Time Warner Inc., reached an agreement with the investors of
AOL Latin America to support the liquidation of the ailing
Internet service provider. The agreement, however, is not
finalized yet and does not require AOL Latin America to wind-
down or to file a bankruptcy petition.

In its Quarterly Report on Form 10-Q for the quarter ended March
31, 2005, AOL Latin America stated that it had US$16.6 million
of available cash on hand as of March 31, 2005 and that its
available cash will only be sufficient to fund operations into
the third quarter of 2005. The Company further stated in its
Form 10-Q that to continue normal operations beyond such time,
it would need an additional, substantial capital infusion and
that it will not be able to obtain such additional financing
from any source.

In the Form 10-Q, AOL Latin America discussed the strategic
alternatives it has explored and the potential actions it would
take if it is not successful in completing transactions to sell
all or part of its businesses. AOL Latin America stated that if
it is not successful in selling its businesses in a timely
manner, it expects to cease operating the businesses and that it
may determine that it is advantageous to file a petition for
bankruptcy under the U.S. bankruptcy laws or other jurisdictions
in which it operates businesses.

Time Warner holds US$160 million in AOL Latin America's senior
convertible notes. After paying potential costs and priority
claims related to a liquidation of AOL Latin America, 60% of any
proceeds would go to Time Warner.

Affiliates of the Cisneros Group of Cos., a privately-held
investment firm and an AOL Latin America investor, would receive
the remainder.

Time Warner also agreed to assume ownership of AOL Latin
America's assets in Puerto Rico as partial repayment of claims
AOL Latin America owes.

Beginning in 2004, AOL Latin America became a subsidiary of Time
Warner for consolidation purposes.

CONTACT: America Online Latin America, Inc.,
         Fort Lauderdale
         Mario Lanzoni
         954-689-3244


CIE: Places $200M Notes Due 2015
--------------------------------
Mexico City-based CIE, one of the largest "out of home"
entertainment companies in Latin America, placed Wednesday
US$200 million in 10-year notes at an annual interest rate of
8.875%.

Citing a filing with the Mexican Stock Exchange, Dow Jones
Newswires reports that the notes, due June 14, 2015, were placed
among more than 50 international investors in the U.S., Europe
and Latin America.

Citigroup was the sole bookrunner, while Credit Suisse First
Boston and Scotia Capital were co-managers.

Moody's Investors Service earlier assigned a Ba2 rating to the
notes.

The proceeds of the transaction will be used to refinance short-
term debt and extend CIE's maturity profile.

CONTACTOS: CIE
           Jaime J. Zevada
           Director Corporativo de Finanzas

           Juan Carlos Sotomayor
           Atencion a Inversionistas

           Conrado M. Ramirez
           Comunicacion con Grupos Financieros

           E-mail: inversionistas@cie.com.mx
           Tel: +52 (55) 5201-9000


DIRECTV GROUP: Plans to Raise $1B in Senior Notes
-------------------------------------------------
DIRECTV Holdings LLC and DIRECTV Financing Co., Inc.
(collectively, "DIRECTV") announced Wednesday that they intend
to privately offer up to $1.0 billion principal amount of senior
notes due 2015.

DIRECTV plans to use the net proceeds from this offering to
repay $500.0 million of borrowings under its current senior
secured credit facility with the remainder of the proceeds to be
retained by DIRECTV for general corporate purposes.

The ten-year senior notes will be unsecured indebtedness
guaranteed on a senior basis by all of DIRECTV's domestic
subsidiaries. The senior notes will be sold to qualified
institutional buyers in reliance on Rule 144A, and outside the
United States in compliance with Regulation S under the
Securities Act. The senior notes initially will not be
registered under the Securities Act of 1933 or state securities
laws and may not be offered or sold by holders thereof without
registration unless an exemption from such registration is
available.

DIRECTV (NYSE:DTV) is a world-leading provider of digital
multichannel television entertainment.

CONTACT: DirecTV, Inc.
         Bob Marsocci
         Phone: 310-964-4656


IKON OFFICE: Moody's Changes Outlook to Negative From Stable
------------------------------------------------------------
Moody's Investors Service changed the ratings outlook for IKON
Office Solutions (senior implied at Ba2) to negative from
stable. The change in outlook to negative reflects (1) weak
revenue patterns and strong pricing competition that continues
to pressure margins, which in turn is necessitating cost
reduction efforts and a streamlining of certain business
activities in addition to (2) an accounting review of its US
trade receivable balances that has delayed its ability to file
its most recent financial statements.

The rating action reflects Moody's expectation that revenue
growth will remain challenging and that competitive pricing
and/or product mix may continue to exert pressure on operating
profitability over the intermediate term. IKON's revenue has
declined between 1% and 7% over each of the last four quarters
although the decline has been less if revenues are normalized
for discontinued or deemphasized operations.

Importantly, within overall revenue, equipment sales continue to
decline (down by 5.6% and 3.2% in each of the first two quarters
of fiscal 2005) with (1) declines noted in higher end and more
profitable segments five and six devices, (2) growth in lower
end (and less profitable) segments and, (3) growth in color
devices although IKON's growth is less than some key competitors
and pricing has become increasingly aggressive in order to
capture the color installed base in order to obtain more
profitable after market business.

As a consequence of its weak revenue pattern, changing mix, and
aggressive price competition, in addition to the sale of its
North American leasing operations last year, IKON's gross
margins remain under some pressure, having declined from nearly
38% two years ago to an estimated 35.6% for the quarter ended
March 2005. Excluding finance operations, gross margins have
declined by about 1% over the same period. With most of these
trends likely to persist, IKON has recognized the need to embark
upon more aggressive cost reduction efforts. In this regard,
IKON recently announced pretax restructuring charges of
approximately $30 million aimed at (1) exiting its off-site
digital printing and fulfillment activities (2) downsizing its
legal document services facilities (3) exiting the majority of
its operations in Mexico and (4) reducing administrative staff.
Moody's expects that the cash outflow related to these actions
will approximate $20 million.

IKON is undergoing an accounting review relating to certain of
its US trade receivables that surfaced during a review of
billing controls and reserve practices during its Sarbanes-Oxley
testing. Based on preliminary data, IKON estimates that US trade
receivables of $372 million could be overstated by about $45
million, which will likely require a restatement of revenues and
trade accounts receivable of prior period financial statements.


TFM: KCS Announces Amendments to KCSR Consent Solicitation
----------------------------------------------------------
Kansas City Southern ("KCS") (NYSE:KSU) announced Wednesday that
its wholly owned subsidiary, The Kansas City Southern Railway
Company ("KCSR"), in connection with its previously announced
solicitation of consents to amend the indentures, as
supplemented where applicable (the "Indentures"), under which
KCSR's outstanding 9 1/2% Senior Notes due 2008 (the "9 1/2%
Notes") and outstanding 7 1/2% Senior Notes due 2009 (the "7
1/2% Notes" and together with the 9 1/2% Notes, the "Notes")
were issued, has amended both of the proposed supplemental
indentures which were attached as annexes to the Consent
Solicitation Statement dated May 11, 2005, by amending Section
1.01 (a) thereof to eliminate the defined term "TFM Credit
Facility," and by eliminating Sections 1.01 (c) and 1.02
thereof, which permit TFM, S.A. de C.V., an indirect subsidiary
of KCS, to incur additional indebtedness and create related
liens. The amount of the consent payment has changed to $3.75
for each $1,000 principal amount of each series of Notes,
payable to holders that validly give their consents prior to the
Expiration Time, as described in the Consent Solicitation
Statement and as amended by all previously issued press releases
relating thereto.

All of the other terms and conditions set forth in the Consent
Solicitation Statement, as amended by all previously issued
press releases relating thereto, remain unchanged. The
Expiration Time is 5:00 p.m., New York time, on June 10, 2005.

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
KCSR 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, 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.

CONTACT:  KANSAS CITY SOUTHERN
          William H. Galligan, 816-983-1551 (Investors)
          E-mail: william.h.galligan@kcsr.com
                     or
          C. Doniele Kane, 816-983-1372 (U.S. Media)
          E-mail: doniele.c.kane@kcsr.com
                     or
          Gabriel Guerra, 011-525-55-208-0860 (Mexico Media)
          E-mail: gguerra@gcya.net



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

* PERU: External Debt Burden Constrains Rating, Outlook - Moodys
----------------------------------------------------------------
In its annual report on Peru, Moody's Investors Service says the
country's Ba3 foreign-currency debt rating and stable outlook
are supported by conservative fiscal management and monetary
policies but constrained by a high external debt burden and the
presence of a dollarized banking system.

"The country's financial standing benefits from macroeconomic
stability and a recent economic recovery, but a trend in favor
of improvement in the external-debt burden is not enough to
lessen its impact on the rating," said Moody's Vice President
Mauro Leos, author of the report.

Peru's ratio of external debt to current account revenues was
194% during 2004, almost twice the average for Ba-rated
countries, according to Moody's report. Despite a declining
trend in the country's external-debt indicators (the ratio was
over 300% in the 1990's), the progress is currently not
sufficient to warrant a reassessment of the credit rating, says
the ratings agency.

Other credit-risk factors include foreign-currency denominated
debt, which comprises 80% of the government's debt, a condition
that may be alleviated by an upcoming Paris Club debt buyback
and counterpart local debt issuance, according to the report.

The government's conservative fiscal policies have resulted in
manageable and fairly stable government-debt ratios, said Mr.
Leos. At the end of 2004, Peru's government-debt-to-GDP ratio
stood at 44%, slightly better than the 54% mean for the Ba-
rating category.

Peru also derives significant credit support from a solid
international reserve position, which provides ample external
liquidity relative to Peru's external financial obligations.



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

R&G FINANCIAL: Murray, Frank Files Class Action Suit
----------------------------------------------------
Murray, Frank & Sailer LLP announces that it has filed a class
action lawsuit in United States District Court for the Southern
District of New York on behalf of all securities purchasers of
R&G Financial Corporation (NYSE:RGF) (Berlin:RG1B) between April
21, 2003 and April 25, 2005, inclusive (the "Class Period").

The complaint alleges that during the Class Period R&G and
certain of the Company's executive officers issued materially
false and misleading financial statements to the investing
public regarding its financial performance and prospects in
violation of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 and Rule 10b 5 promulgated thereunder.

R&G Financial 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. During the
Class Period, defendants made materially false and misleading
statements regarding the Company's business and prospects.
Unbeknownst to public investors, the true facts, which
defendants knew and/or recklessly disregarded and failed to
disclose to the investing public during the Class Period,
included: (a) that the Company was using fraudulent accounting
practices and materially overstated its net income, net gain on
mortgage loan sales and net capital; and (b) that the Company
was using ineffective risk management and hedging strategies
against the increasing risk of rising interest rates. As a
result of the defendants' false statements, R&G Financial's
stock price traded at inflated levels during the Class Period.

After the market closed on April 25, 2005, the Company issued a
press release announcing that it would be reviewing the
independent market valuations it had employed in valuing
residual interests retained in securitization transactions of
the Company. In connection with the review, the Company
announced it would be restating its financial results for fiscal
years 2003 and 2004 to reflect a reduction in the fair value of
its residual interests as of December 31, 2004 by approximately
$90 million to $150 million. In response to this announcement,
shares of R&G Financial fell 35 percent on April 26, 2005 to
close at $15.04. On April 26, 2005, R&G issued a press release
announcing that it was the subject of an informal SEC
investigation related to its restatement announcement.

Murray, Frank & Sailer LLP and its predecessor firms have
devoted its practice to shareholder class actions and complex
commercial litigation for more than thirty years and have
recovered hundreds of millions of dollars for shareholders in
class actions throughout the United States.

If you purchased or otherwise acquired R&G securities on any
world exchange between April 21, 2003 and April 25, 2005, and
sustained damages, you may, no later than June 20, 2005, move
the Court to serve as lead plaintiff. Shareholders outside the
United States may also join the action, regardless of which
exchange was used to purchase the securities. To serve as lead
plaintiff, however, you must meet certain legal requirements.
You can join this class action as lead plaintiff online at
http://www.murrayfrank.com/CM/NewCases/NewCases.asp.If you
would like to discuss this action, this announcement, or your
rights and interests, please contact plaintiff's counsel Eric J.
Belfi or Christopher Hinton of Murray, Frank & Sailer LLP.

CONTACT:  Murray, Frank & Sailer LLP
          Eric J. Belfi
          Christopher Hinton
          (800) 497-8076
          (212) 682-1818
          Fax: (212) 682-1892
          info@murrayfrank.com



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

BWIA: To Halt Flights to Scotland, Ireland
------------------------------------------
National airline BWIA announced Tuesday that it will terminate
services to/from Prestwick, Scotland, and Belfast, Northern
Ireland effective June 23 as part of its latest attempt to save
itself from financial collapse.

"For further information regarding reservations on these
services, please contact 627-2942 (Trinidad and Tobago), 1-800-
538-2942 (for the Caribbean and North America, including
Canada), 0870-499-2942 (United Kingdom and Europe)," BWIA said
in a news release announcing the termination of the flights.

In April, independent Senator Ramesh Deosaran recommended BWIA's
closure, saying the airline is not making money. His
recommendation came days after the government threw a US$35.6
million lifeline around BWIA's neck.

To see important facts about BWIA:
http://bankrupt.com/misc/BWIA.pdf

CONTACT: BRITISH WEST INDIES AIRWAYS (BWIA)
         Phone: + 868 627 2942
         E-mail: mail@bwee.com
         Home Page: http://www.bwee.com



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

* URUGUAY: IMF Executive Board OKs $1.13B Stand-By Arrangement
--------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
approved Wednesday a 36-month, SDR 766.3 million (about US$1.13
billion) Stand-By Arrangement for Uruguay, aimed at supporting
the country's economic stabilization through mid-2008 and
helping to foster sustainable growth while reducing
vulnerabilities related to high public debt. The approval
enables the immediate release of SDR 30.7 million (about US$
45.3 million) under the arrangement.

Following the Executive Board discussion on Uruguay, Mr. Agustˇn
Carstens, Deputy Managing Director and Acting Chair, made the
following statement:

"Uruguay's economic performance over the past three years has
been very favorable. After stabilizing the economy from the
severe financial crisis in 2002, the authorities' Fund-supported
program achieved an impressive recovery of growth, in an
environment of rising exports and international reserves,
falling inflation, and sharply improving fiscal accounts. These
favorable results reflect the steadfast pursuit of prudent
fiscal and monetary policies, important structural reforms
especially in the banking sector, and a generally supportive
external environment. The smooth political transition to a new
government following the 2004 elections also helped solidify
market confidence in sustained domestic consensus on a core
framework of stability and growth-oriented policies.

"While much has been achieved over the past three years, the
task is now to sustain the recent recovery and build a lasting
trend of rapid growth and improving social conditions. Although
fiscal adjustment, prudent monetary policy, and banking reforms
have reduced economic vulnerabilities, important weaknesses and
risks remain-including a still large public debt, weaknesses in
the financial sector, and obstacles to investment that hamper
Uruguay's growth potential and its ability to compete in the
global market place. There have also been delays with planned
tax and pension system reforms, which-unless addressed-leave the
fiscal accounts vulnerable to shocks and contingent costs.

"The authorities' economic strategy aims to address these
challenges and create a sustained dynamic of rapid growth,
declining public debt, and improving social conditions. Key to
their strategy is the creation of a favorable environment for
private investment, through the pursuit of prudent fiscal and
monetary policies and a comprehensive growth-oriented structural
reform agenda. Decisive implementation of these envisaged
measures will be crucial. At the same time, the strategy places
increased emphasis on ensuring that the benefits of growth are
more equally shared and on addressing the lingering social
dislocations from the recent crisis.

"A key plank of the authorities' strategy is continued fiscal
consolidation, supported by structural fiscal reforms, while
making room for a temporary social emergency program to address
urgent social needs. Monetary policy will be geared to achieving
a steady reduction in inflation to the low single digits, while
strengthening international reserves in the context of a
flexible exchange rate system. As in the fiscal area, the agenda
includes important institutional reforms to strengthen the
framework and instruments of monetary policy. A broad range of
growth-enhancing structural reforms, supported by the World Bank
and the Inter-American Development Bank, aim to strengthen the
environment for private investment and productive enterprise,
with emphasis on improving access to financing, competition,
infrastructure, and the regulatory framework," Mr. Carstens
said.

                       Annex

Program Summary

The authorities' program for 2005-08 envisages real GDP growth
to average around 4 percent a year, benefiting from the momentum
of the recent recovery and two large foreign investment
projects. Inflation is targeted to decline gradually, by 1
percentage point a year, to around 3« percent by 2008, while
exports are projected to increase by about 9 percent a year and
net international reserves to increase by US$1.5 billion over
the program period. A key program goal is to gradually re-
establish Uruguay's access to international capital markets,
instrumental to the country's longer-term growth prospects as
well as the envisaged exit from IMF financial support.

The fiscal program is anchored on a medium-term primary surplus
target of 4 percent of GDP, to bring down the public debt-to-GDP
ratio to about 60 percent by 2008 and to about 50 percent by
2012. Key measures to achieve these goals include a
comprehensive tax reform, an improved budgetary framework and
firm spending control, timely adjustment of public tariffs, and
reform of the specialized pension funds. The primary surplus in
2005-06 would be somewhat lower to accommodate a temporary
social emergency program.

Monetary policy will continue to be based on base money
targeting in the context of a flexible exchange rate regime,
until conditions are in place to move to an inflation targeting
framework. To prepare for this move, the program envisages a
strengthening of the autonomy and financial position of the
central bank.

Financial system reforms are to continue, building on the crisis
resolution efforts of recent years with a view to creating the
necessary infrastructure of financial intermediation in support
of sustained private-sector led growth. Priorities include the
continued reform of public banks (BROU and BHU); strengthening
NBC, including by divesting the government's stake; further
improving the supervisory framework; and overhauling the bank
resolution framework to ensure rapid and efficient resolution of
banking problems should they occur.

A wide range of growth-enhancing reforms constitute another core
pillar of the program and are designed to stand beside prudent
macroeconomic policies and supporting institutional reforms.
Many of these reforms are being supported under World Bank and
the Inter-American Development Bank lending programs, and aim at
creating an environment conducive to private investment and
productive enterprises. The reforms include developing capital
markets, opening up sectors currently reserved for the state to
private sector participation and competition, bolstering
property and creditor rights, improving infrastructure, and
strengthening Uruguay's investment climate.

CONTACT:  INTERNATIONAL MONETARY FUND
          700 19th Street, NW
          Washington, D.C. 20431 USA

          IMF EXTERNAL RELATIONS DEPARTMENT
          Public Affairs: 202-623-7300 - Fax: 202-623-6278
          Media Relations: 202-623-7100 - Fax: 202-623-6772



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

PDVSA: In Discussions With Brazil's Petrobras to Import Ethanol
---------------------------------------------------------------
State oil company Petroleos de Venezuela SA (PDVSA) is in
"conversations" with its Brazilian counterpart Petroleo
Brasileiro SA to import ethanol, Business News Americas reports,
citing the head of refining at PDVSA.

Venezuela is looking to import ethanol to replace
environmentally-damaging leaded gasoline, which the government
plans to phase out this year.

"We are the only country in the Americas that uses lead in
gasoline," said Alejandro Granado following a hearing in the
National Assembly on Tuesday.

Ethanol is an alternative automotive fuel derived from grain and
corn that is often blended with gasoline.

Granado said the nation's refineries could begin producing
ethanol as well. PdVSA could also begin mixing alcohol with
gasoline as a lead substitute.

"We are evaluating the different options to replace lead in
gasoline," he said.

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



                            ***********


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
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Information contained herein is obtained from sources believed
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