TCRLA_Public/050620.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

           Monday, June 20, 2005, Vol. 6, Issue 120

                            Headlines


A R G E N T I N A

ACEROS ZAPLA: Authorities Intervene in Dispute
ACTION FANS: Court Orders Liquidation
BERSA: Santa Fe Wins Auction, Awaits Central Bank Clearance
ERBO S.A.: Debt Payments Halted, Moves to Reorganize
NOVA DONNA: Court Appoints Trustee for Reorganization

REPSOL YPF: Moody's Upgrades Local Unit's Ratings
SAN SALVADOR: Court Designates Trustee for Liquidation


B E R M U D A

FOSTER WHEELER: Corporate Financing Week Lauds 2004 Debt Deal



B O L I V I A

AGUAS DEL ILLIMANI: Prepared to Give Up Concession



B R A Z I L

AES TIETE: Two Major Banks Complete Sale of Minority Stakes
PRIMO SCHINCARIOL: Police Arrest Execs on Tax Evasion Charges
USIMINAS: Latibex Listing Pending
VARIG: Files For Creditor Protection in Brazil, U.S.


D O M I N I C A N   R E P U B L I C

AES DOMINICANA: Andres, Lenders Extend Forbearance Agreement


M E X I C O

CIE: Concludes MXN1.1 Bln Capital Increase
HYLSAMEX: Techint's Acquisition May Pressure Credit Quality
INDUSTRIAS UNIDAS: S&P Lowers Ratings to 'B'


P A N A M A

WILLBROS GROUP: Baron & Budd Files Class Action Lawsuit


P A R A G U A Y

COPACO: Guarantees No Competition in Rural Areas


P E R U

* PERU: Paris Club Accepts Offer to Prepay Up to $2B of Debt


V E N E Z U E L A

PDVSA: Decision on Operative Agreements Saves Venezuela $300M
PDVSA: To Increase Crude Output
SIVENSA: Wraps Up First Phase of Capital Increase

     -  -  -  -  -  -  -  -

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

ACEROS ZAPLA: Authorities Intervene in Dispute
----------------------------------------------
Officials from the government decided to step into the Aceros
Zapla dispute after negotiations between the steel products
maker and its striking workers reached an impasse, according to
Business News Americas.

The officials, including the country's Defense Minister Jose
Pampurro and several other legislators, met with workers to
offer a solution to their demands. Labor minister Carlos Tomada
promised to mediate worker requests to the Company directly.

The workers began a strike on June 2 demanding a salary hike of
ARS300 (US$104) a month. The Company's offer of a ARS130-hike by
June to be upped to ARSP160 by July and to ARS200 by August was
rejected by the union.


ACTION FANS: Court Orders Liquidation
-------------------------------------
Action Fans S.R.L. prepares to wind-up its operations following
the bankruptcy pronouncement issued by Court No. 24 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 Mr. Gabriel T Vulej as
trustee. Mr. Vulej will be reviewing creditors' proofs of claim
until Aug. 29, 2005. The verified claims will serve as basis for
the individual reports to be presented for court approval on
Oct. 10, 2005. The trustee will also submit a general report of
the case on Nov. 22, 2005.

Clerk No. 48 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 the Company's debts.

CONTACT: Mr. Gabriel T Vulej, Trustee
         Tucuman 1484
         Buenos Aires


BERSA: Santa Fe Wins Auction, Awaits Central Bank Clearance
-----------------------------------------------------------
Federally-run Banco Nacion announced that the government has
chosen local bank Nuevo Banco de Santa Fe to be Banco de Entre
Rios' (BERSA) buyer, Business News Americas reports.

The decision came despite rival bidder Banco de Santiago del
Estero's challenge of the offers made Banco de Santa Fe and
another local bank Comafi.

Previously, local press reported that Banco de Santiago claimed
its rivals' payment guarantees were reportedly made using checks
instead of in cash or charged on a central bank account as the
tender rules had stipulated.

Nevertheless, Santa Fe's bid still needs approval from the
central bank. BERSA is likely to remain as the Entre Rios
province's financial agent after the sale.

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. Banco Nacion
took over the banks 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.

In the recent auction for BERSA, Banco de Santa Fe offered
ARS172 million (US$59.9mn), surpassing competitors Banco de
Santiago del Estero and Comafi's ARS120 million and ARS98
million.


ERBO S.A.: Debt Payments Halted, Moves to Reorganize
----------------------------------------------------
Court No. 21 of Buenos Aires' civil and commercial tribunal is
studying the request for reorganization submitted by local
company Erbo S.A., says Infobae. The report adds that that the
Company filed a "Concurso Preventivo" petition after failing to
pay its creditors for its debts. The city's Clerk No. 41 assists
the court on this case.

CONTACT: Erbo S.A.
         Tucuman 1538
         Buenos Aires


NOVA DONNA: Court Appoints Trustee for Reorganization
-----------------------------------------------------
Nova Donna S.R.L., a company operating in Buenos Aires, is ready
to start its reorganization after Court No. 10 appointed Mr.
Jose Maria Colace to supervise the proceedings as trustee. Clerk
No. 19 assists the court on this case.

An Infobae report states that Mr. Colace will verify creditors'
claims until Oct. 17, 2005. Afterwards, he will present these
claims as individual reports for final review by the court on
Nov. 28, 2005. Mr. Colace will also provide the court with a
general report pertaining to Nova Donna's reorganization on Feb.
9, 2006. The court has scheduled the informative assembly on
Sep. 4, 2006.

CONTACT: Nova Donna S.R.L.
         Avda Libertador 6550
         Buenos Aires

         Mr. Jose Maria Colace, Trustee
         Avda Cordoba 652
         Buenos Aires


REPSOL YPF: Moody's Upgrades Local Unit's Ratings
-------------------------------------------------
Moody's Investors Service upgraded Thursday the ratings of
Spanish oil company Repsol YPF's local subsidiary YPF S.A.
Moody's upgraded YPF's senior unsecured rating to Ba3 from B1
and the unit's domestic currency issuer rating to Baa2 from
Baa3.

YPF's foreign currency issuer rating of Caa1 remained unchanged,
as it is constrained by the sovereign ceiling of Argentina.
YPF's Corporate Family Rating (formerly known as the senior
implied rating) is aligned with the foreign currency issuer
rating at Caa1.

All ratings now have a stable outlook.

Moody's upgrade follows Repsol's ongoing maintenance of a solid
financial profile and supportive liquidity, management's stated
strategy to broaden the group's asset diversification, sustained
strong positions and cash generation from the group's Spanish
refining and marketing business, and gradual improvements in
Argentina's operating environment, despite ongoing macroeconomic
challenges.

At the same time, ratings remain constrained by the group's
still high, albeit reducing, asset exposure to Argentina, which
in 2004 represented 65% of Repsol's total production of 1.17
million barrels of oil equivalent (boe) per day, close to 50% of
its 4.9 billion boe in reserves and 48% of the group's EUR 3.97
billion of operating profit. Ratings also remain constrained by
Repsol's recently weak reserve replacement, largely the result
of the mature nature of its Argentinean reserves, the group's
wider exposure to South America, including approximately 25% of
total reserves in politically tumultuous Bolivia, and the
execution risk attached to some of its growth strategy, which
contains a greater reliance on exploration activities.

Moody's notes that Repsol's ratings incorporate the group's
recently published five-year strategic plan to 2009, which is
based on sustaining strong cash generation from its Argentinean
operations, while at the same time investing predominantly in
Trinidad & Tobago, Algeria, Libya and the Middle East to
diversify its asset base. Although some of the group's future
reserve growth is scheduled to be derived from higher-risk
exploration activities, Moody's takes comfort from the good
pipeline of especially LNG-related projects, which should help
support Repsol's recently low reserve replacement ratios. Over
the next five years, Repsol plans to invest over USD 1.9 billion
into Algeria and Libya to increase its net production in the
region. Repsol also plans to spend around USD 980 million
developing the two-train 14bcm p.a. capacity Persian LNG project
in Iran and expects the first train of the Gassi Touil LNG plant
in Algeria to be operational by 2009. Train 4 of Repsol's
flagship LNG liquefaction asset, Atlantic LNG, is due to come on
stream by the end of 2005.

Moody's adds that both Repsol YPF's and YPF's financial profiles
have continued to improve, with management having further
reduced consolidated debt at year-end 2004, and the group's
Argentinean subsidiary is now virtually net debt free. This
leaves them in a strong financial position to withstand further
potential shocks in Argentina, generating sound cash flow to
debt and interest coverage and cushioned by robust liquidity.
Moody's also factors into its ratings management's aim to
maintain solid financial ratios on an ex-Argentina basis in the
unlikely event that it should lose access to cash flows from
YPF. In Moody's view, both Repsol's financial and business risk
profile on an ex-Argentina basis would still justify solid
investment grade ratings, given Repsol's strong refining
position in Spain, the business's solid cash flows and overall
manageable debt levels. Nonetheless, Moody's adds that Repsol's
access to YPF's cash flows has been unimpaired throughout the
economic crisis in the region.

The upgrade of YPF's ratings in particular are supported by the
subsidiary's fully integrated profile, its low operating costs,
which Moody's expects however to rise in line with sector-wide
cost inflation and the appreciation of the peso, and its strong
financial profile.

Going forward, Moody's views Repsol's revised five year strategy
as largely supportive of its ratings, given (1) the efforts to
increase geographic diversification from presently high upstream
concentration in Argentina, (2) initiatives aimed at improving
historically weak reserve replacement and curbing declining
production from its mature Argentinean assets, (3) increasing
the level of integration, particularly via LNG projects, (4)
moderate downstream investments aimed at preserving the cash
generation strength of its domestic refining by further
improving conversion capacity and (5) maintaining a prudent
capital structure with ongoing efforts to reduce debt. Signs of
successful execution of Repsol's strategy, together with a
further stabilisation of the operating environment in Argentina,
could further benefit ratings over the medium term.

In addition, Moody's would anticipate Repsol to maintain its
retained cash flow (RCF) to net adjusted debt ratio above 30%
and funds from operations (FFO) to cover interest 9-10 times,
while achieving group-wide through-cycle reserve replacement
ratios of more than 100% to consider a further upgrade of
Repsol's ratings into the 'A' category. Moody's also expects
Repsol to maintain its leverage (including preference shares)
within its 35-45% band at all times. Any material acquisitions,
none of which are anticipated by Moody's, would likely require
equity contributions, as Moody's will expect Repsol to sustain
its currently strong debt protection ratios and liquidity in
counterbalance of its higher risk business profile.

Repsol YPF, headquartered in Madrid, Spain, is a major oil and
gas company with a strong downstream presence in Spain and
upstream concentration in Argentina through its wholly-owned
subsidiary, YPF. In 2004, the group had 4.9 billion boe of
proved reserves and produced 1.17 million boe per day of oil and
gas and had revenues of EUR 36.16 billion.


SAN SALVADOR: Court Designates Trustee for Liquidation
------------------------------------------------------
Buenos Aires accountant Norberto Bonesi was assigned as trustee
for the liquidation of local San Salvador S.A.I.C.F. y A.,
relates Infobae.

Mr. Bonesi will verify creditors' claims until Aug. 1, 2005, the
source adds. After that, he will prepare the individual reports,
which are to be submitted in court on Sep. 12, 2005. The
submission of the general report should follow on Oct. 24, 2005.

The city's civil and commercial Court No. 12 handles the
Company's case. Clerk No. 24 assists the court with the wind-up
proceedings.

CONTACT: Mr. Norberto Bonesi, Trustee
         Avda Juan B. Justo 5096
         Buenos Aires



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B E R M U D A
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FOSTER WHEELER: Corporate Financing Week Lauds 2004 Debt Deal
-------------------------------------------------------------
Foster Wheeler Ltd. (Nasdaq:FWLT) announced that its equity-for-
debt exchange, successfully completed in 2004, has been named
runner-up as "best deal pitch" of the year in Corporate
Financing Week's 2005 Rainmaker Awards.

The annual Rainmaker Awards are given to the individuals, firms
and deals that made the biggest impact on corporate finance in
the last 12 months.

Foster Wheeler engaged Rothschild, the investment bank, and King
& Spalding LLP, a leading international law firm, as advisors
for its planned equity-for-debt exchange, which involved
negotiations with a number of separate entities, including banks
and holders, both domestic and international, of the Company's
securities. The deal was successfully concluded in September
2004.

Corporate Financing Week lauded the ability of Raymond J.
Milchovich, Foster Wheeler's chairman, president and chief
executive officer, King & Spalding, and Rothschild, to settle
such a variety of difficult issues, saying it "raises the bar
for complex restructurings to come."

Foster Wheeler Ltd. is a global Company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and management,
research and plant operation services. Foster Wheeler serves the
refining, upstream oil and gas, LNG and gas-to-liquids,
petrochemicals, chemicals, power, pharmaceuticals, biotechnology
and healthcare industries. The corporation is based in Hamilton,
Bermuda, and its operational headquarters are in Clinton, New
Jersey, USA.

CONTACT: Foster Wheeler Ltd.
         Media Contact:
         Maureen Bingert
         Phone: 908-730-4444

         Investor Contact:
         John Doyle
         Phone: 908-730-4270

         Other Inquiries:
         Phone: 908-730-4000
         Web site: http://www.fwc.com



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B O L I V I A
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AGUAS DEL ILLIMANI: Prepared to Give Up Concession
--------------------------------------------------
La Paz water concessionaire Aguas del Illimani (AISA) is not
going to fight off an earlier decision by the government to
rescind its contract, Business News Americas suggests.

In fact, the Company, which is controlled by French water giant
Suez, has asked the government to speed up an audit it had
ordered to examine the Company's performance under the
concession as well as contractual compliance issues in order get
clearance to leave the country as soon as possible.

Deputy minister for basic services, Eduardo Rojas, said AISA is
looking to terminate the contract as soon as possible to avoid
having to renew a guarantee bond worth US$20 million.

AISA said it will be turning responsibility for water supplies
in the city over to a state-owned Semapa, which earlier admitted
it does not have the means to maintain the water supply services
over anything more than the short term. Moreover, La Paz city
and satellite town El Alto say they would not be able to afford
to run the service given the high capital input costs required.

La Paz and El Alto, together with central government officials,
are studying the advantages of a public-private partnership as
administrator of the service.

The government moved to replace AISA after residents complained
about lack of services in parts of the city and water bills tied
to the US dollar.



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

AES TIETE: Two Major Banks Complete Sale of Minority Stakes
-----------------------------------------------------------
Sao Paulo's government-owned bank Nossa Caixa and Banco do
Estado de Sao Paulo SA (Banespa) have completely divested of
their minority stakes in the Brazilian electric power utility
AES Tiete.

The power company - controlled by the Brasiliana holding
company, which is a joint venture between U.S.-based AES Corp.
(AES) and Brazil's National Development Bank (BNDES) - revealed
in a statement that the banks offered 18.02 million preferred
shares and 5.49 million voting shares.

The preferred shares were sold at a price of BRL40.00 Brazilian
($1=BRL2.44) per lot of 1,000 shares while the voting shares at
a price of BRL36.50 per lot of 1,000. The offer raised BRL921.6
million.

The banks, which announced their intention to sell their
holdings in AES-Tiete in May, together held a 28% stake in AES
Tiete. Credit Suisse First Boston and Banco Santander Brasil
coordinated the offer.

The shares were sold in Brazil and also to qualified investors
in the U.S. under 144A rules.


PRIMO SCHINCARIOL: Police Arrest Execs on Tax Evasion Charges
-------------------------------------------------------------
Federal Police arrested executives of Primo Schincariol
Industria de Cervejas e Refrigerantes SA, the country's second
largest brewery, for allegedly participating in a tax evasion
scheme that defrauded authorities of BRL1 billion (US$411
million) over the last five years.

Arrested were the Company's president, Adriano Schincariol, his
brother Alexandre Schincariol and uncle Gilberto Schincariol,
two other people from the Schincariol family and two directors
of the company.

Authorities said "Operation Barley," which mobilized hundreds of
federal police and tax officials across 12 states, was their
biggest crackdown ever on tax evasion.

According to the findings of a 14-month investigation,
Schincariol evaded federal and state taxes with the help of
distributors by underreporting sales, buying goods illegally and
falsifying information.

The top executives will be charged with offenses including money
laundering, tax evasion, corruption and participating in
organized crime.

"We believe this organization was very well thought out and very
well put together to have committed all these crimes," Sao Paulo
Federal Police Superintendent Jose Ivan Lobato said at a news
conference.

Schincariol issued a statement denying the accusations and
saying its books had always been open to tax authorities. The
Company claimed it paid BRL1.17 billion in taxes in 2004,
compared with MXN688 million in the previous year.


USIMINAS: Latibex Listing Pending
---------------------------------
USIMINAS - Usinas Siderurgicas de Minas Gerais S/A [USIM3,
USIM5, USIM6, USNZY], informs that its Preferred "A" shares,
will be traded on Latibex, starting on July 5th. The company's
shares will be traded under the XUSI code. Espirito Santo
Investment will be the market maker. Currently, USIMINAS is the
fourth most traded stock in the Brazilian Stock Market and
represents 5.16% of the Ibovespa theoretical portfolio.

According to its CEO, Mr. Rinaldo Campos Soares, the company's
goal is to get closer to the European financial community. "Once
more, USIMINAS confirms its commitment with the international
capital market and consolidates itself as one of the biggest
players in the world steel sector."  

On next July 5th, at 11:30 am, Mr. Rinaldo Campos Soares, will
participate in the Latibex opening ceremony. Following, Mr.
Rinaldo and executives of USIMINAS will give a presentation to
investors, analysts and to the press at the Madrid Stock
Exchange. On July 6th they will be presenting at Barcelona Stock
Exchange.

Latibex will reach a total of 34 listed companies from 7
different countries (Argentina, Brazil, Chile, Mexico, Panama,
Peru and Porto Rico) thus consolidating itself as the third
market for Latin American securities in terms of capitalization.

CONTACT: Usinas Siderurgicas Minas Gerais SA
         Mr. Bruno Seno
         Phone: +55 (31) 3499-8710
         E-mail: brunofusaro@usiminas.com.br


VARIG: Files For Creditor Protection in Brazil, U.S.
----------------------------------------------------
Viacao Aerea Rio-Grandense SA (Varig), Brazil's debt-laden
flagship airline, filed for bankruptcy protection from creditors
in Brazil and the U.S. on Friday.

According to Varig's lawyer, Sergio Bermudes, the airline filed
for bankruptcy reorganization in the 8th district state business
court of Rio de Janeiro, as well as in the Southern District of
New York.

The airline filed the petition to keep a restructuring plan on
track and prevent 11 of its 82 jetliners from being seized by a
division of American International Group Inc. (AIG). The ILFC,
the aircraft leasing unit of AIG, had given Varig until Friday
to return the 11 leased planes because of a lapsed leasing
agreement.

Due to the filing, the carrier can continue to use the jetliners
while a judge mediates details of the airline's rescue plan with
creditors, said Bermudes.

The legal move came as Varig is trying to negotiate an alliance
with Portugal's state-owned airline TAP aimed at preventing the
South American carrier from collapsing under a mountain of debt.
Varig now has two months to present a recovery plan to creditors
under new Brazilian bankruptcy laws, Bermudes said, and will
continue operating as usual.

"It's not possible for a company of Varig's size to go out of
business," he said.

Varig, founded 78 years ago, is the first company to seek
protection under Brazil's week-old bankruptcy law, said Charles
Gruenberg, a bankruptcy lawyer in Sao Paulo.

Under the new law, a distressed company is allowed to offer
creditors alternative plans to stay in business and pay its
debts in a process overseen by a judge. The plan could include
restructuring obligations or selling assets to raise cash.

The plan must win approval from Varig's creditors, which include
the government, banks such as Banco do Brasil SA and Uniao de
Bancos Brasileiros SA and other financial institutions including
the leasing unit of the American International Group Inc.

Varig has US$2.8 billion in balance sheet debt and US$2 billion
in debt not included in its balance sheet, according to
documents filed to the U.S. court. The carrier has no
significant fixed assets, according to court papers in the U.S.
All of its aircraft are leased.

Varig sought protection in the U.S. to bar creditors there from
interfering with restructuring in Brazil. The filing under
Section 304 of the U.S. Bankruptcy Code, will enable Varig "to
avoid a piecemeal distribution of its assets, prevent
substantial litigation costs, and prevent creditors from
attaching any assets in the U.S.," airline lawyer Vicente Cervo
said in papers filed with the U.S. Bankruptcy Court in New York.

The Sao Paulo stock exchange suspended trading on Varig's shares
and asked the Company to comment on news reports saying the
airline filed for bankruptcy protection.

CONTACT:  VARIG S.A. (Viacao Aerea Rio-Grandense)
          Avenida Almirante Silvio de Noronha, 365
          Rio de Janeiro, RJ 20021-010
          Brazil

          VICENTE CERVO - FOREIGN REPRESENTATIVE OF VARIG
          Attorneys for the Foreign Representative:
               PILLSBURY WINTHROP SHAW PITMAN LLP
               1540 Broadway
               New York, New York 10036-4039
               (212) 858-1000 (Phone)
               (212) 858-1500 (Fax)
               Rick B. Antonoff (RBA-4158)



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D O M I N I C A N   R E P U B L I C
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AES DOMINICANA: Andres, Lenders Extend Forbearance Agreement
------------------------------------------------------------
As previously announced, Andres and Los Mina, two wholly-owned
subsidiaries of AES located in the Dominican Republic, were in
default under their US$112 million and US$24 million respective
credit facilities. On December 15, 2004, both Andres and Los
Mina entered into forbearance agreements with their respective
lenders pursuant to which Andres and Los Mina agreed to pay
interest when due under the facilities and the lenders agreed
not to exercise any remedies under the respective credit
agreements. These forbearance agreements expired on June 10,
2005. On June 16, 2005, Andres entered into an agreement with
its lenders to extend its forbearance agreement until July 30,
2005. Andres is in negotiations with the lenders under its
credit agreement to amend the facility. As of May 31, 2005, the
unaudited net assets of Andres were US$311 million. While an
extension of the forbearance agreement for Los Mina has not been
executed, Los Mina is currently involved in discussions with its
lenders. As of May 31, 2005 the unaudited net assets of Los Mina
were US$92 million.



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M E X I C O
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CIE: Concludes MXN1.1 Bln Capital Increase
------------------------------------------
Entertainment company Corporacion Interamericana de
Entretenimiento SA (CIE) completed Wednesday a MXN1.1 billion
capital increase via a rights offering, reports Dow Jones
Newswires.

CIE issued 50 million class B shares at MXN22 a share, the
Company revealed, adding, 37.5 million shares were subscribed to
by existing shareholders. The Company has received requests for
all of the remaining shares not purchased under the rights
offering.

CIE will use the proceeds to buy Grupo Finaciero Inbursa SA's
25% stake in its unit CIE Las Americas for MXN990 million.

Las Americas operates the horse racetrack in Mexico City, as
well as the Centro Banamex convention and exhibition center.

CIE also revealed that it has completed the placement of US$200
million in 10-year bonds. The proceeds of the transaction will
be used to refinance short-term debt and extend the Company's
maturity profile.

CONTACT:  Corporacion Interamericana de Entretenimiento
          Paseo de las Palmas 1005
          Colonia Lomas de Chapultepec
          11000 Mexico, D.F., Mexico
          Phone: +52-55-5201-9000
          Fax: +52-55-5201-9401


HYLSAMEX: Techint's Acquisition May Pressure Credit Quality
-----------------------------------------------------------
Fitch Ratings believes that the proposed plan by Grupo Techint
(Techint) to expand its operations in Latin America via the
US$2.3 billion acquisition of the Mexican steel producer
Hylsamex S.A. de C.V. (Hylsamex), holds the potential to
pressure the credit quality of Techint's current and future
operating subsidiaries, in particular, Siderar S.A. (Siderar)
and Hylsamex. However, Fitch believes that the transaction could
be structured in a way that would allow the operating
subsidiaries involved to support moderate increases in their
respective debt levels or their indirect debt servicing burden
via required dividend payments, and still maintain their current
ratings.

Fitch expects the transaction will be financed with a
combination of debt and equity. Incremental debt is expected to
be raised at both the holding and operating company levels,
which will likely have a direct or an indirect leveraging impact
on Siderar and Hylsamex. Although the additional debt and the
expected changes of shareholder structure may not have an
immediate impact on the rated entities, Fitch will review the
final financing structure to determine if each entity's free
cash flow will adequately meet direct and indirect debt
servicing requirements consistent with its respective rating
level. Hylsa S.A. de C.V. (Hylsa), Hylsamex's operating
subsidiary, is rated 'BB+' (mex) on the Mexican national rating
scale, with a Positive Rating Outlook; Siderar is rated 'AA'
(arg) on the Argentine national rating scale, with a Stable
Rating Outlook.

Techint will likely raise debt and equity primarily at a new
holding company to be created to consolidate its current and
future international investments in flat and long steel
producers Siderar (Argentina), Hylsamex (Mexico) and Siderurgica
del Orinoco S.A. Sidor (Venezuela). Fitch expects excess free
cash flow from these operating companies to be used to make
dividends payments to the holding company to service any debt
obligations incurred at this level. Fitch estimates that each
operating entity could potentially be expected to provide
annually between US$75 million and US$100 million in funds to
support debt service requirements at the holding company level.
In April 2005, Siderar distributed US$100 million in dividends.
Sidor's recent debt structuring agreement restricts the
company's ability to incur additional debt and distribute
dividends, except for payments of excess cash to shareholders
and creditors according to a specified equation. Together these
companies are expected to have an annual production capacity of
12 million tons, sales of US$5 billion and total debt of less
than approximately US$1.7 billion.

Although Fitch expects debt to be incurred at the holding
company level, Fitch does not anticipate that Techint will raise
new debt at the Hylsamex level as a result of the proposed
acquisition. The total potential indirect debt servicing burden
by Hylsamex should be manageable at the current rating level as
the company has consolidated debt of approximately US$675
million, cash of US$220 million as of March 31, 2005 and is
expected to generate EBITDA of about US$800 million in 2005.

As Techint plans to have its Argentine flat steel subsidiary,
Siderar, acquire up to 30% of Hylsamex by purchasing shares on
the open market, up to approximately US$380 million of related
debt may be raised at Siderar. Fitch also believes that since
Siderar currently has very low leverage, the additional debt
expected to be incurred by Siderar, should still allow the
company to maintain a credit profile consistent with its rating.
The incremental direct or indirect debt servicing burden by
Siderar is viewed to be manageable as the company has
essentially no debt, cash of about US$400 million as of March
31, 2005 and is forecasted to generate EBITDA of about US$500
million in 2005.

In a separate transaction, Siderar plans to expand its position
in Argentina by investing US$55 million of internal funds to
purchase two plants from Acindar S.A. (Acindar) with a capacity
to produce 140,000 tons of steel pipes. This smaller acquisition
and that of Hylsamex, would allow Siderar to enhance its size
and geographical diversification, broaden its mix of higher
valued-added products and consolidate its position in the local
market of Argentina.

The proposed acquisition of Hylsamex by Techint should have a
minimal effect on the credit profile of Tenaris, the entity that
consolidates Techint's steel pipe businesses serving the oil and
gas industries. The transaction involves only for Tenaris to
exchange its 12.6% stake in Sidor, a Venezuelan steel producer,
for shares of the new holding company to be created. In
addition, Tenaris will likely buy a steel tube plant, from
Acindar for US$28 million. Tenaris is rated 'BBB' on an
international scale, with a Stable Rating Outlook.

Techint plans to purchase the 42.5% stake in Hylsamex's total
capital held by Grupo Alfa, Hylsamex's controlling shareholder.
The acquisition will be carried out via Techint's subsidiary,
Industrial Investments Inc., the controlling shareholder of
Siderar. Techint also plans to acquire the remaining shares of
Hylsamex traded on the Mexican stock exchange via public
offering to minority shareholders. The price agreed upon with
Grupo Alfa places the value for 100% of Hylsamex at US$2.3
billion, including a US$143 million dividend to be paid by
Hylsamex. The acquisition is subject to approval by the Mexican
regulatory authorities as well as the result of the public
offering, which must result in Techint obtaining more than 50%
of the Hylsamex's capital. Another separate agreement between
Techint and Grupo Alfa involves the acquisition of Grupo Alfa's
10.5% stake in Sidor for US$107 million, which would bring
Techint's direct and indirect holdings in Sidor to 47.7%.

Grupo Techint, headquartered in Milan and Buenos Aries, operates
through more than 30 companies worldwide in the steel, energy,
engineering and construction sectors and had consolidated
revenues of US$8.5 billion for the financial year ending June
30, 2004. Grupo Alfa holds a 42.5% stake in Hylsamex, a Mexican
manufacturer of flat and long steel with an annual production
capacity of 3.7 million tons of liquid steel. Siderar, with an
annual production capacity of 2.6 million tons of crude steel,
is the major producer of flat steel products in the Argentine
market. Tenaris is majority-owned by Techint and holds the
group's seamless and welded pipe manufacturing companies with
combined capacity of 4.1 million tons of tubular steel products
primarily for the oil and gas drilling and pipelines. Sidor,
with an annual production capacity of 4.4 million tons of crude
steel, is the largest producer of flat and long steel products
in Venezuela. Acindar has an annual production capacity of 1.4
million tons of crude steel and is the largest producer of long
steel products in Argentina.


INDUSTRIAS UNIDAS: S&P Lowers Ratings to 'B'
--------------------------------------------
Standard & Poor's Ratings Services lowered its long-term local
and foreign currency corporate credit ratings on Industrias
Unidas S.A. de C.V. (IUSA) to 'B' from 'B+'. The issuer's
corporate credit national scale rating was lowered to 'mxBBB-'
from 'mxBBB'. The outlook is stable.

"The rating action follows IUSA's announcement that it has
postponed the syndication of its proposed $300 million senior
secured credit facility and reflects our concerns regarding
IUSA's liquidity, particularly refinancing risk," said Standard
& Poor's credit analyst Jose Coballasi. "The rating action also
reflects the weakness of IUSA's financial performance during
first-quarter 2005 and expectations of continued weakness during
the second quarter."

The ratings assigned to IUSA reflect the inherent cyclicality of
the construction industry, the company's high leverage,
competitive pressure on core products and markets, tight
liquidity, and low operational margins. These factors are
partially offset by the company's leading market positions in
Mexico and the U.S., product mix, and some geographic
diversification in the manufacturing and distribution of copper
tubing, copper-alloy products, valves, controls, watt-hour
meters, wire and cable, and electrical devices.

IUSA is one of Mexico's largest diversified industrial
companies, offering a large variety of products through
integrated manufacturing and distribution operations located
principally in Mexico and the U.S. The company's operations are
conducted by seven principal business groups: copper tubing,
wire and cable, copper alloys, electrical products, watt-hour
meters, valves and controls, and diversified assets group.

The stable outlook reflects our expectation that IUSA's
financial performance will improve modestly at best during the
second half of the year. Further weakness in the issuer's
financial performance and liquidity could lead to a negative
rating action. The successful refinancing of its short-term debt
maturities coupled with a sustained recovery in operating
margins and key financial ratios could lead to a positive rating
action.

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



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

WILLBROS GROUP: Baron & Budd Files Class Action Lawsuit
-------------------------------------------------------
The law firm of Baron & Budd, P.C. announces that a class action
lawsuit has been filed on behalf of purchasers of Willbros
Group, Inc. (NYSE:WG)("Willbros" or the "Company") securities
during the period between May 6, 2002 and May 16, 2005,
inclusive (the "Class Period").

The complaint alleges that Willbros Group, Inc. has violated
federal securities laws by issuing false or misleading
information and that the Company failed to disclose and
misrepresented the following material adverse facts which were
known to defendants or recklessly disregarded by them.
Specifically, the complaint alleges: (a) that the Company was
violating the Foreign Corrupt Practices Act by bribing foreign
officials in order to obtain business in Bolivia, Nigeria, and
Ecuador; (b) Willbros filed false tax returns, failed to file
required tax returns, and failed to pay certain taxes in
locations outside of the United States which materially
overstated the Company's financial results and exposed the
Company to potential fines and penalties; (c) that the Company
was participating in undisclosed related party transactions; (d)
that the Company lacked adequate internal controls; and (e) that
as a result of the above, the Company's reported financial
results were materially overstated at all relevant times and
were not prepared in conformity with Generally Accepted
Accounting Principles ("GAAP") and were materially false when
issued.

After the market closed on May 16, 2005, Willbros announced the
results of the Audit Committee's internal investigation into the
circumstances behind the Company's tax assessment and other
illegal activities, stating that the Company will restate its
previously issued financial statements for the fiscal years
2002, 2003, and the first nine months of 2004. The restatement
is expected to reduce net income between a range of $7.2 and
$9.2 million.

This news shocked the market and the Company's stock plummeted
$4.92 per share, more than 30%, from its May 16, 2005 closing
price of $15.92 to its close on May 17, 2005 at $11.00.

If you acquired the securities of Willbros Group, Inc. during
the Class Period and meet certain legal requirements, you may,
no later than July 17, 2005, move for appointment as lead
plaintiff on behalf of the proposed class.

About Baron & Budd, P.C.

Since 1977, the law firm of Baron & Budd, P.C. has championed
the rights of people and communities harmed by corporate
misconduct. With over 70 attorneys and offices in Texas,
Illinois, Ohio, Louisiana, and New York, Baron & Budd enjoys a
national reputation as a leader of the plaintiff's bar. The firm
represents individuals with mesothelioma and other diseases
caused by asbestos; leukemia and lymphoma caused by benzene;
injuries caused by other toxic substances and unsafe
pharmaceuticals; water authorities seeking clean-up costs for
drinking water contamination; securities investors defrauded by
corporate wrongdoing; and consumers in class actions. For more
information on the firm, call 1-800-222-2766 or visit
www.baronandbudd.com

CONTACT:  Baron & Budd, P.C.
          Randall K. Pulliam, Esq.
          Max Jodry
          (800) 222-2766
          E-mail: info@baronbudd.com
          URL: http://www.securitiesactions.com



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

COPACO: Guarantees No Competition in Rural Areas
------------------------------------------------
State-run fixed line operator Copaco moved to alleviate
incumbent mobile operators' fears, saying its new service won't
compete with theirs in rural areas.

Business News Americas reports that private operators have
expressed some opposition to Copaco's plans to launch a mobile
unit.

But Copaco commercial manager Osmar Lopez told mobile operators
they have nothing to fear from its new service as it plans to
use its GSM network only to bring coverage to low density
sectors. The Company plans to use a spectrum license that it is
now buying from Paraguayan telecoms regulator Conatel.

"No company is using cable systems [in low density areas] these
days, because it is all replaced by wireless solutions and that
is what Copaco plans to do. We do not plan to compete with
mobile operators in those markets they cover but we plan to
reach rural areas," Lopez added.

Lopez revealed Copaco is preparing a tender to purchase mobile
handsets and will respect Conatel's decision not to subsidize
the mobile service with revenues from its fixed line services.



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

* PERU: Paris Club Accepts Offer to Prepay Up to $2B of Debt
------------------------------------------------------------
The representatives of the Paris Club creditor countries met on
Wednesday to agree on the offer made by the Republic of Peru to
prepay up to US$ 2 billion principal maturities of its debt
falling due between August 2005 and December 2009. The
prepayment will be made at par and offered to all creditors.

The debt covered by this offer is the debt not granted under
Official Development Assistance conditions. The interest savings
achieved through this prepayment will support the Republic of
Peru in the implementation of a cautious and balanced debt
management strategy.

Participation in the prepayment programme is voluntary. The
majority of Peru's creditors have indicated that they are likely
to participate. Payments to creditors will be made on August 15,
2005.

The Paris Club was formed in 1956. It is an informal group of
creditor governments from major industrialized countries. It
meets on a monthly basis in Paris with debtor countries in order
to agree with them on restructuring their debts.

The members of the Paris Club who are creditors of the Republic
of Peru are Austria, Belgium, Canada, Finland, France, Germany,
Italy, Japan, the Netherlands, Norway, Spain, Sweden, the United
Kingdom and the United States of America.

The Republic of Peru's debt not granted under Official
Development Aid conditions and owed to Paris Club creditors will
be, prior to any prepayment, US$ 4.2 billion as of July 1, 2005.



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

PDVSA: Decision on Operative Agreements Saves Venezuela $300M
-------------------------------------------------------------
Minister of Energy and Petroleum and President of PDVSA, Rafael
Ramirez, pointed out that the decision of limiting payments of
operative agreements helps Venezuela save over US$300 million
dollars.

During the ceremony held to celebrate the beginning of works for
the construction of La Raisa Thermal Power Plant, in Santa
Teresa del Tuy, Miranda State, Minister Ramirez reported that
PDVSA's operation costs rose due to the way Operative Agreements
were conceived.

"We have already explained that costs resulting from operative
agreements were indexed to oil prices. Therefore, with the
gradual increase of oil prices, PDVSA has seen a rise in its
operational costs, contrary to what it is expected," Ramirez
indicated.

He remind the audience that producing an oil barrel out of these
operative agreements costs $18, while a barrel produced directly
by PDVSA costs $4. This is the reason why last April 12th the
Ministry of Energy and Petroleum released a statement whereby
payments under these terms were restricted.

This new provision, as explained by Minister Ramirez, will be in
force to pay operative agreements corresponding to the first
quarter of the current year. "This measure will contribute to
our new costs structure as, like any other corporation, we have
been forced to apply it to the best interest of the country," he
added.

Ramirez insisted that PDVSA maintains relations in good terms
with the shareholders of Operative Agreements, and made clear
that the issue to focus on is related to a deviation of the
exchange agreement. As a consequence, PDVSA has asked Venezuelan
Central Bank to release a statement where it is established how
many of these payments must be issued in US currency and how
many in bolivars.

"The Venezuelan Central Bank has already determined some of the
activities and elements to be paid in dollars, such as drills.
Other activities, however, must be paid in bolivars," Ramirez
said.

He also pointed out that the Ministry of Energy and Petroleum
and the National Tax and Tributary Administration Service
(Seniat) work jointly on a proposal to reform the Income Tax
Law. Ramirez informed that immediately after having a real
project, this will be subject to the National Assembly
discussion.

"In any part of world, the main economic activity is subject to
special regulations", Ministry of Energy and Petroleum said. In
this sense, he mentioned that in the `70s the Income Tax Law had
a specific article regarding oil activities; but later on, 70
successive reforms made disappear details concerning this
sector.

Production

During the ceremony held in Valles del Tuy, Miranda State,
Minister Ramirez indicated that in Monagas State, according to
volumetric measurements planning for this year, PDVSA Northern
District produces 25,000 crude oil barrels more than what it was
expected, contributing, like this, to establishing a balance of
commitments set up in the Corporation's budget.

He also informed that in a few months, PDVSA will be able to
show better results in Western Venezuela, where measures have
been taken to reactivate some wells which, due to structural
problems such as vapor and gas injection deficiencies, were
totally inactive.

Minister Ramirez emphasized that PDVSA will not grant Orimulsion
patents to Sinovensa as it was speculated about by the national
press. "We do not intent to or are able to grant patents," he
assured. "As everybody knows, all over the world patents are
protected by an intellectual property right; we apply it, and
anybody who wants to enjoy such a right must pay royalty. This a
regular provision stated in the whole planet, and we see no
reason to change it here in Venezuela."

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: To Increase Crude Output
-------------------------------
PDVSA president and energy and oil minister Rafael Ramirez
announced that oil firm PDVSA will raise its oil production this
year.

The decision, according to Business News Americas, follows an
announcement from OPEC that it will raise production quotas for
members of the cartel for the second time this year.

Although Venezuela has always favored slashing OPEC production
to raise prices, Ramirez said PDVSA would abide by the decision.

Venezuela's production quota was increased earlier this year to
3.17 million barrels of oil a day (Mb/d), but the new quota has
not yet been announced.

"There will have to be an [OPEC] meeting in September to see
what decision we take regarding our production volume," Ramirez
told the radio station, adding that an increase in PDVSA's
output is expected in 4Q05.

PDVSA says national production is currently around 3.3Mb/d,
which is above its OPEC quota but below its goal for 2005 fiscal
budget purposes of 3.4Mb/d.


SIVENSA: Wraps Up First Phase of Capital Increase
-------------------------------------------------
Steelmaker Sivensa concluded the first stage of a capital
increase on June 15, reports Business News Americas.

In a filing with the Caracas stock exchange, the Company
disclosed that the amount of VEB32.3 billion (US$12.3 million)
was oversubscribed by some VEB5 billion.

Sivensa suggested that the second stage of the capital increase
will take place if by June 30 the amount equivalent to US$15
million at the official exchange rate of VEB2,150 to the US
dollar has not been raised, focusing on shares not taken up in
the first stage.

Sivensa split the share offer in two stages to raise funds and
pay part of the US$15 million bank debt held by the Company and
its subsidiary Sidetur.

The capital increase is part of a March 31 debt accord reached
between the Company and creditor banks, allowing Sivensa to
extend the debt's maturity date from September 30, 2007, to
December 31, 2009, among other things.

The Company's creditor banks include local institutions
Industrial, Provincial, Mercantil and Corp Banca; the Andean
Development Corporation (CAF) and foreign banks BNP Paribas, ING
Bank, ABN Amro Bank and Citibank.



                            ***********


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

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

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