TCRLA_Public/050624.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 24, 2005, Vol. 6, Issue 124

                            Headlines

A R G E N T I N A

AEROLINEAS ARGENTINAS: Keeps on With the Renewal of Fleet
BAIRES POST: Court Declares Company Bankrupt
CAMERPLAST S.R.L.: Court Rules Bankruptcy
COOPERATIVA DE VIVIENDA: Court Names Trustee in Bankruptcy Case
FERRICOR S.A.: Bankruptcy Process Stops, Reorganization to Begin

INTERNATIONAL PURCHASE: To Undergo Bankruptcy Process
MAC SUPPORT: Debt Payments Halted, Set To Reorganize
NEO TEC: Enters Bankruptcy on Court Orders
NORPETROL S.A.: Court Converts Bankruptcy to Reorganization
TRANSENER: Share Offer Closes With Few Takers


B R A Z I L

BANCO SANTOS: Govt. Appointed Trustee Requests Liquidation
BRASKEM: Shareholders Elect New Board Members  
BRASKEM: Announces $240M JV With Petroquisa
COPEL: Board OKs Replacement of Representatives UEG Committee
ELETROPAULO METROPOLITANA: To Price $200M in Bonds This Week

NET SERVICOS: Morgan Stanley Starts Coverage
VARIG: Rio de Janeiro Court OKs Restructuring Petition


C O L O M B I A

TELECOM: Gets More Time to Pay Off Remaining Debt


J A M A I C A

AIR JAMAICA: Govt. Struggles to Put Airline's Finances in Order


M E X I C O

AOL LATIN AMERICA: Enters Executive Retention Agreements


P A R A G U A Y

COPACO: President to Prevent Launching of Mobile Service


V E N E Z U E L A

PDVSA: Ownership of CITGO Affects Unit's Ratings
PDVSA: Slams Reports Suggesting Citgo Sale
PDVSA: Analysts Apprehensive of Reform Bill

     -  -  -  -  -  -  -  -                            

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

AEROLINEAS ARGENTINAS: Keeps on With the Renewal of Fleet
---------------------------------------------------------
Aerolineas Argentinas added another Boeing 747/400 plane to four
of this kind, which will increase the fleet before the end of
the year. These planes offer a greater amount of seats, less
sound pollution and state of the art technology.

The seventh Boeing 737/500 will also arrive next week to the
country for the completion of the ten units during the year 2005
and a total amount of fifteen units in the future. This way the
Company keeps on with the successful accomplishment of the
Renewal Plan of the Fleet that was announced in October 2004.

CONTACT:  AEROLINEAS ARGENTINAS
          Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA
          Phone: (54-11) 4310-3000
          Fax: (54-11) 4310-3585
          E-mail: volar@aerolineas.com.ar
          Home Page: www.aerolineas.com.ar
          Officer: Patricio Zabalia Lagos, President


BAIRES POST: Court Declares Company Bankrupt
--------------------------------------------
Court No. 20 of Buenos Aires' civil and commercial tribunal
declared local Company Baires Post S.R.L. "Quiebra", relates La
Nacion. The court approved the bankruptcy petition filed by
Osecac, whom the Company has debts amounting to $95,068.58.

The Company will undergo the bankruptcy process with Ms. Maria
Adornetto as trustee. Creditors are required to present proof of
their claims to Ms. Adornetto for verification before Sep. 23,
2005. Creditors who fail to submit the required documents by the
said date will not qualify for any post-liquidation
distributions.

Clerk No. 40 assists the court on the case.

CONTACT: Baires Post S.R.L.
         Sarmiento 385
         Buenos Aires

         Ms. Maria Adornetto, Trustee
         Suipacha 670
         Buenos Aires


CAMERPLAST S.R.L.: Court Rules Bankruptcy
-----------------------------------------
Buenos Aires civil and commercial Court No. 6 decreed the
bankruptcy of Camerplast S.R.L., reports Infobae. The Company
will kick off the process with Ms. Adriana Beatriz Benzer as
receiver, who will verify creditors' claims until Aug. 31, 2005.
The Company's case will conclude with the liquidation of its
assets to repay creditors. Clerk No. 11 assists the court in
handling the proceedings.

CONTACT: Ms. Adriana Beatriz Benzer, Trustee
         Montevideo 149
         Buenos Aires


COOPERATIVA DE VIVIENDA: Court Names Trustee in Bankruptcy Case
---------------------------------------------------------------
Buenos Aires accountant Ana Beatriz Bravo was assigned as
trustee for the liquidation of local company Cooperativa de
Vivienda Consumo y Credito Esquel Ltda., relates Infobae.

Ms. Bravo will verify creditors' claims until Aug. 4, 2005, the
source adds. After that, she will prepare the individual
reports, which are to be submitted in court on Sep. 16, 2005.
The submission of the general report should follow on Nov. 1,
2005.

The city's civil and commercial Court No. 2 handles the
Company's case. Clerk No. 3 assists the court with the wind-up
proceedings.

CONTACT: Cooperativa de Vivienda Consumo y Credito Esquel Ltda.
         Lavalle 1290
         Buenos Aires

         Ms. Ana Beatriz Bravo, Trustee
         25 de Mayo 596
         Buenos Aires


FERRICOR S.A.: Bankruptcy Process Stops, Reorganization to Begin
----------------------------------------------------------------
Ferricor S.A. will proceed with reorganization after La Plata's
civil and commercial Court No. 12 converted the Company's
ongoing bankruptcy case into a "concurso preventivo", states
Infobae.

Under bankruptcy protection, the Company will be able to draft a
proposal designed to settle its debts with creditors. The
reorganization also prevents an outright liquidation.

Mr. Jorge Jauregui Lorda, the court-appointed trustee, will
verify creditors' proofs of claim until June 30, 2005. Creditors
with unverified claims cannot participate in the Company's
settlement plan.

CONTACT: Ferricor S.A.            
         Calle 137 y 523
         La Plata

         Mr. Jorge Jauregui Lorda, Trustee
         Calle 50 Nro. 408
         La Plata


INTERNATIONAL PURCHASE: To Undergo Bankruptcy Process
-----------------------------------------------------
International Purchase S.A. will undergo bankruptcy process
after Buenos Aires' civil and commercial Court No. 6 declared
the Company "Quiebra", La Nacion reports.

The court, with the assistance of Clerk No. 11, appointed city
accountant Juan Treppo as receiver. Mr. Treppo will verify
creditors' claims until Sep. 19, 2005. From these claims, he
will make individual reports to be presented to court. A general
report will follow.

CONTACT: International Purchase S.A.
         Espinosa 1583
         Buenos Aires

         Mr. Juan Treppo, Trustee
         Sarmiento 1183
         Buenos Aires


MAC SUPPORT: Debt Payments Halted, Set To Reorganize
----------------------------------------------------
Court No. 24 of Buenos Aires' civil and commercial tribunal is
reviewing the merits of the petition of Mac Support S.A. to
reorganize. Infobae recalls that the Company filed the petition
following cessation of debt payments. Reorganization will allow
the Company to avoid bankruptcy by negotiating a settlement with
its creditors.

Clerk No. 47 is assisting the court on the Company's case.

CONTACT: Mac Support S.A.
         Viamonte 1388
         Buenos Aires


NEO TEC: Enters Bankruptcy on Court Orders
------------------------------------------
Neo Tec S.A. entered bankruptcy protection after Court No. 6 of
Buenos Aires' civil and commercial tribunal, with the assistance
of Clerk No. 11, ordered the Company's liquidation. The order
effectively transfers control of the Company's assets to a
court-appointed trustee who will supervise the liquidation
proceedings.

Infobae reports that the court selected Federico G. Estrada as
trustee. Mr. Estrada will be verifying creditors' proofs of
claim until the end of the verification phase on Oct. 7, 2005.

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

CONTACT: Mr. Federico G. Estrada, Trustee
         Moldes 2453
         Buenos Aires


NORPETROL S.A.: Court Converts Bankruptcy to Reorganization
-----------------------------------------------------------
Buenos Aires' civil and commercial Court No. 12, with the
assistance of Clerk No. 24, converted the ongoing bankruptcy
case of Norpetrol S.A. into "concurso preventivo", reports
Infobae.

The ruling allows Norpetrol S.A., which is now gearing for the
reorganization process, to draft a proposal that will settle its
debts with creditors, preventing an outright liquidation of the
Company's assets.

Court-appointed trustee Hudo D. Pantaleo is tasked to verify
creditors' claims.

CONTACT: Norpetrol S.A.
         Melincue 3665
         Buenos Aires

         Mr. Hudo D. Pantaleo, Trustee
         Avda Corrientes 1450
         Buenos Aires
     

TRANSENER: Share Offer Closes With Few Takers
---------------------------------------------
Just as analysts had predicted, high-voltage power transporter
Transener S.A.'s preferred share subscription closed with
virtually no takers, says Dow Jones Newswires.

Transener revealed Wednesday in a statement with the local stock
exchange that its offer for 76,027,500 Class B shares closed on
June 17 with investors subscribing to 9,867 of those shares.

These participants were able to buy those shares by first
purchasing a coupon, which had been trading at less than 1
centavo ($1=ARS2.865). No existing Class B shareholders
participated in the offer, Transener said.

The non-subscribed shares, which total 76,017,633, will be
distributed to creditors that opted for the equity option under
the Company's US$465-million debt restructuring, Transener said.

The equity option also includes a 2015 discount bond that
carries an 18% reduction in principal. The Company concluded its
debt work-out in May with a 98.8% approval rate from creditors.

Analysts have been expecting low interest in the offer since
most of Transener's existing Class B shares are in the hands of
local pension funds that weren't expected to increase their
holdings.

Apart from that, the subscription price was set at ARS1.38 per
share, which was above the price at which Transener's highly
illiquid shares were trading during the offer period.

Transener is issuing a total 84,475,000 new shares, which will
increase the share capital by 23.45%.

CONTACT:  TRANSENER S.A.
          Paseo Colon 728 6th Floor
          (1063) Buenos Aires
          Republica Argentina
          Tel: (54-11) 4342-6925
          Fax: (54-11) 4342-7147
          Email: info-trans@transx.com.ar
          Web site: http://www.transener.com.ar



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

BANCO SANTOS: Govt. Appointed Trustee Requests Liquidation
----------------------------------------------------------
Banco Santos, which has been under central bank intervention
since November 2004, could be liquidated in the short term if a
bankruptcy court grants a petition to declare the institution
insolvent.

Mr. Vanio Pickler Aguiar, the trustee appointed by the
government to administer Banco Santos, filed the petition with a
Sao Paulo bankruptcy judge, saying Banco Santos was currently in
a situation of "total insolvency."

No date has been set for a hearing on the petition.

When the central bank intervened Banco Santos in November, it
discovered that Banco Santos was short of its reserve
requirement levels by more than BRL2 billion ($1=BRL2.37).


BRASKEM: Shareholders Elect New Board Members  
---------------------------------------------
Shareholders of Braskem S.A. held an Extraordinary General
Meeting on Tuesday to elect new board members to replace Mr.
Fernando de Castro Sa. Secretary Ana Patricia Soares Nogueira
recorded:

Minutes Of The Extraordinary General Shareholders' Meeting
Held On June 21, 2005

1. DATE AND TIME: June 21, 2005 at 10:30 p.m.

2. LOCATION: At the Company's headquarters, located at Rua
Eteno, 1561, Camacari Petrochemical Complex, CEP 42.810-000,
Camacari, BA.

3. NOTICE: Notice of Convocation published pursuant to Articles
124 and 289 of Law No. 6,404/76, in the newspaper "Diario
Oficial do Estado da Bahia", on June 03, 04/05 and 07, 2005, in
the newspaper "A Tarde", on June 03, 04 and 06, 2005, and
pursuant to CVM Instruction Nos. 207/94 and 232/95 for broader
circulation in the newspapers "Gazeta Mercantil" on June
03/04/05, 06 and 07, 2005.

4. ATTENDANCE: Shareholders representing more than 85% of the
voting capital, as evidenced by signatures contained in the
Register of Shareholder Attendance.

5. MEETING BOARD: Chairman: Marcelo Andre Lajchter, and
Secretary: Ana Patricia Soares Nogueira, chosen in accordance
with Article 17 of the Bylaws.

6. ITEM ON THE AGENDA: substitution of members of the Board of
Directors, due to certain resignations presented.

7. DELIBERATIONS: The sole item on the agenda were discussed and
put to a vote, and the following decisions were made unanimously
by those present:

7.1.) RESIGN AND SUBSTITUTION OF MEMBERS OF THE BOARD OF
DIRECTORS - a) the shareholders took notice of the fact that
Board Member Fernando de Castro Sa presented his resignation; b)
the shareholders registered votes of gratitude and recognition
to these board members for his dedicated efforts and
contribution to the Company; c) the shareholders then elected
the following new board members to fill the vacant position due
to the resign of Mr. Fernando de Castro Sa, as well as to fill
the currently vacant alternate position at the Board of
Directors, with a mandate coincident to the other members of the
Board of Directors, being until the Ordinary General Meeting
that will analyze the management accounts related to the fiscal
year ended December 31, 2005, respectively, Mrs. MARIA ROMA DE
FREITAS , Brazilian, single, chemical engineer, enrolled with
the CPF/MF Individual Taxpayers' Registry under No. 457.805.106-
44, bearer of Identity Card No. M-2.380.070, issued by the
Identification Institute of Minas Gerais, resident and domiciled
in Rio de Janeiro, RJ, with professional address at Av.
Republica do Chile, 65, Centro, Rio de Janeiro, RJ, CEP: 20139-
900, and Mr. FERNANDO DE CASTRO SA, Brazilian, single, lawyer,
enrolled with the Brazilian Bar Association under No. 65.035 and
with the CPF/MF Individual Taxpayers' Registry under No.
974.096.937-20, resident and domiciled in Rio de Janeiro, RJ,
with professional address at Av. Republica do Chile, 65, Centro,
Rio de Janeiro, RJ, CEP: 20139-900. The Board Members elected
herein presented written declarations stating that, in
accordance with Article 37, item II, of Law No. 8,934 of
11/18/1994, with text given by Article 4 of Law No.10,194 of
2/14/2001, they are in no way impeded from performing their
commercial or administrative duties as a result of any criminal
sentence, as well as they are in no way impeded by any special
law or condemned by bankrupt crime, violation of duty, bribery,
concussion, peculation, crimes against the economy, full faith
and credit, or property, or any criminal penalty that impedes,
even temporarily, the access to public offices, in accordance
with the 1st Paragraph of Article 147 of Law No. 6,404 of
12/15/1976, as well as having presented, in fulfillment of CVM
Instruction No. 358, of 1/3/02, and No. 367, of 5/29/02, written
declarations according to the terms of said Instructions, which
were placed on file at the Company's headquarters, which after
were drafted their respective investiture contracts. Therefore,
based on the changes approved above, the Company's Board of
Directors shall now be made up of the following members: TITLE-
HOLDERS: PEDRO AUGUSTO RIBEIRO NOVIS - CHAIRMAN; ALVARO
FERNANDES DA CUNHA FILHO - VICE-CHAIRMAN; JOSE DE FREITAS
MASCARENHAS; LUIZ FERNANDO CIRNE LIMA; NEWTON SERGIO DE SOUZA;
ALVARO PEREIRA NOVIS; FRANCISCO TEIXEIRA DE SA; KUNIYUKI TERABE;
PATRICK HORBACH FAIRON; ANDRE TAPAJOS CUNHA; MARIA ROMA DE
FREITAS. RESPECTIVE ALTERNATES: RUY LEMOS SAMPAIO; MARCOS LUIZ
ABREU DE LIMA; GUILHERME SIMMES DE ABREU; HILBERTO MASCARENHAS
ALVES DA SILVA FILHO; JOSE AUGUSTO CARDOSO MENDES; MARCOS WILSON
SPYER REZENDE; LUCIO JOSE SANTOS JUNIOR; EDMUNDO JOSE CORREIA
AIRES; ROGERIO GONCALVES MATTOS; DEUSDEDITE FAGUNDES DE BRITO
FILHO; FERNANDO DE CASTRO SA.

8. CLOSING: Having no further business on the agenda, the
Extraordinary General Shareholders' Meeting was adjourned, and
this resolution drafted, read, discussed and signed by all those
present, comprising the quorum necessary for the validity of the
deliberations in this meeting. Then, as decided by the same
shareholders, the Secretary of the meeting was authorized to
take out the necessary certifications. Camacari/BA, June 21,
2005.

CONTACT: Braskem S.A.
         Jose Marcos Treiger
         Investor Relations Officer
         Phone: 55-11-3443-9529
         E-mail: jm.treiger@braskem.com.br
         Or
         Luiz Henrique Valverde
         IR Manager
         Phone: 55-11-3443-9744,
         E-mail: luiz.valverde@braskem.com.br
         Or
         Luciana Paulo Ferreira
         IR Manager
         Phone: 55-11-3443-9178
         E-mail: luciana.ferreira@braskem.com.br


BRASKEM: Announces $240M JV With Petroquisa
-------------------------------------------
BRASKEM S.A. (BOVESPA: BRKM5; NYSE: BAK; LATIBEX: XBRK), leader
in the thermoplastic resins segment in Latin America and one of
the three largest Brazilian privately- owned industrial
companies, together with PETROBRAS QUIMICA S.A. -- PETROQUISA
("Petroquisa"), announce their decision to invest US$ 240
million in a modern and competitive industrial unit for the
production and sale of polypropylene in Paulinia -- State of Sao
Paulo. This initiative, which implies the creation of a joint
venture between the companies, was approved June 22 by their
respective Boards of Directors.

The new industrial unit, which will be located in the heart of
the main consumer center in Brazil, will have initial
polypropylene production capacity of 300,000 tons/year, with
potential to reach 350,000 tons. Operations are scheduled to
begin by the end of 2007. Including this additional capacity,
Braskem will have 950,000 tons/year production capacity of
polypropylene to meet the growing demand for this resin,
enabling the Company to consolidate its leadership position in
the principal thermoplastics produced by Braskem. The raw
material used in the new unit will be polymer-grade propylene
supplied by Petrobas.

The decision is consistent with Braskem's strategy of creating
value for its shareholders. "Braskem and Petroquisa are
investing in a world-class polypropylene unit, which combines
production scale, updated technology and access to competitive
raw material," said Braskem's CEO Jose Carlos Grubisich.
"Additionally, this initiative consolidates our strategic
association with Petroquisa," he added.

The management of the new unit will be shared by both companies,
with Braskem being responsible for sales and marketing. Average
annual revenues are projected to reach US$ 317 million, and the
net present value of the project is estimated at US$ 204
million.

Braskem will have a 60% stake in the new unit's voting capital,
and Petroquisa will hold the remaining 40%. Out of a total of
US$ 240 million to be invested in the new industrial unit, 30%
will be equity contributions by shareholders and the remaining
amount will be funded by long term financing specifically for
this project. "The decision of making this investment shows our
confidence in the growth of both the Brazilian economy and the
thermoplastic resins market," affirmed Grubisich.

Braskem will contribute the process technology that will be
employed in the Paulinia industrial unit, which is the most
modern technology available in international markets and as to
which Braskem has complete technical know-how, representing a
competitive advantage of the venture, in addition to opening the
possibility of transferring technology to future projects. The
new unit will operate under the strictest safety and
environmental standards, consistent with sustainable development
concepts.

The Paulinia industrial unit is part of Braskem's expansion
plan, which has been developed since 2004 and that is expected
to add 1.2 million tons to its production capacity through 2007.
Through these initiatives, Braskem maintains its focus on
improving the productivity and competitiveness of its
operations, strengthening its value creation model in all stages
of the petrochemical cycle.

Braskem, a world-class Brazilian petrochemical company, is the
leader in the thermoplastic resins segment in Latin American,
and is among the three largest Brazilian-owned private
industrial companies. The company operates 13 manufacturing
plants located throughout Brazil, and it has an annual
production capacity of 5.8 million tons of resins and other
petrochemical products.


COPEL: Board OKs Replacement of Representatives UEG Committee
-------------------------------------------------------------
Companhia Paranaense de Energia (Copel) approved during its
annual meeting on Monday the replacement of Copel's
representatives in the Decision-making Committee of UEG
Araucaria Ltda.

Summary Of The Minutes Of The 109th Annual Board Of Directors'
Meeting

1. VENUE: Rua Coronel Dulcidio, 800, city of Curitiba, State of
Parana.

2. DATE AND TIME: June 20, 2005 - 2 p.m.

3. PRESIDING BOARD: Joao Bonifacio Cabral Junior - Chairman;
Rubens Ghilardi - Executive Secretary.

4. RESOLUTIONS TAKEN:

I. the replacement of Copel's representatives in the Decision-
making Committee of UEG Araucaria Ltda. was approved, by
unanimous vote, indicating Mr. Robson Luiz Rossetin as sitting
member and Ms. Denise Campanholo Busetti Sabbag as alternate
member;

II. the 20-F Report, to be filed with the United States
Securities and Exchange Commission - SEC, approved, by unanimous
vote; and

III. the proposal for the Board members start receiving the
minutes of the meetings of the Executive Board, as the Fiscal
Council members currently receive them, and for the Board member
Maria Aparecida Rodrigues Placa starts receiving, also, the
minutes of the meetings of the Board of Directors of the
Company's Wholly-owned Subsidiaries, was approved, by unanimous
vote.

5. SIGNATURES: JOAO BONIFACIO CABRAL JUNIOR - Chairman; RUBENS
GHILARDI - Executive Secretary; ACIR PEPES MEZZADRI; FRANCELINO
LAMY DE MIRANDA GRANDO; LAURITA COSTA ROSA; MARIA APARECIDA
RODRIGUES PLACA; NELSON FONTES SIFFERT FILHO; ROGERIO DE PAULA
QUADROS; SERGIO BOTTO DE LACERDA.

CONTACT: COMPANHIA PARANAENSE DE ENERGIA- COPEL
         Rua Coronel Dulcidio 800
         Curitiba
         Parana, 80420-170
         Brazil

         Investor Relations team:
         E-mail: ri@copel.com
         Phone:(55 41) 3222-2027


ELETROPAULO METROPOLITANA: To Price $200M in Bonds This Week
------------------------------------------------------------
Electric power utility Eletropaulo Metropolitana Eletricidade de
Sao Paulo SA is expected to price before the end of the week
US$200 million worth of Brazilian Real-linked unsecured and
unsubordinated overseas bonds, reports Dow Jones Newswires.

A syndicate source close to the deal said the 60-month bonds are
likely to be placed at a yield of around 19.0%. The sale is
being coordinated by Merrill Lynch.

Standard & Poor's Ratings Services, which last week assigned a
'B' rating to the forthcoming bonds, said the transaction will
not increase Eletropaulo's total debt because at least 50% of
the proceeds will be used to prepay short- and long-term
positions of debt restructured in 2004 (original amount of
BRL2.3 billion), and the remainder will be applied to enhance
liquidity.

"Overall, this issue will reduce foreign currency denominated
debt, fairly smoothen out the total debt profile, and relieve
2005 amortization requirements," said Standard & Poor's credit
analyst Marcelo Costa.

At the end of the first quarter, Eletropaulo's net debt totaled
BRL5.0 billion.

Controlled by a joint venture between U.S.-based AES Corp. (AES)
and Brazil's National Development Bank (BNDES), Eletropaulo
distributes power to some 4 million clients in the city through
a distribution and transmission network 23,000km long.
Eletropaulo operates over 70,000 overhead transformers on the
city poles.

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


NET SERVICOS: Morgan Stanley Starts Coverage
--------------------------------------------
US investment bank Morgan Stanley initiated coverage of Net
Servicos de Comunicacao SA (NETC) on Wednesday saying Brazil's
largest cable television firm is "interesting," but that its
share prices don't have much room to rise, relates Dow Jones
Newswires.

"We see opportunity in the company's growth profile, but this
appears to fully priced in," Morgan Stanley said in a note to
investors.

Morgan Stanley said Net Servicos shares are trading at a 15%
discount to similar cable firms in richer countries, but that a
20%-25% discount would be more appropriate.

"Investors are pricing in too much good news associated with
Telmex ownership," Morgan Stanley said.

Telmex, Mexico's largest phone company, bought a minority stake
in Net Servicos earlier this year as part of Net's broader plans
to restructure its debts.

Net Servicos' shares could jump significantly if Telmex were to
launch a tender offer, but Morgan Stanley said this was
"unlikely."

Morgan Stanley also said the Company's debt restructuring has
positioned it for modest revenue growth going forward, though
profitability should improve.

"With liquidity concerns behind them, management should be able
to better focus on operational concerns," it said.

CONTACT:  NET SERVICOS DE COMUNICACAO
          Investor Relations: Marcio Minoru
          Phone: 011-5511-2111-2811
          Email: minoru@netservicos.com.br

          Sandro Pina
          Phone: 011-5511-2111-2721
          Email: sandro.pina@netservicos.com.br
          http://www.netservicos.com.br


VARIG: Rio de Janeiro Court OKs Restructuring Petition
------------------------------------------------------
Cash-strapped Brazilian airline Varig has secured a Rio de
Janeiro court's approval on a petition to begin a financial
restructuring process under the new bankruptcy law.

Saddled with a debt of BRL9.5 billion (US$4 billion), Varig and
its two subsidiaries, Rio Sul and Nordeste, filed a petition on
June 17, seeking to reorganize its finances under the new
bankruptcy law.

Judge Alexander Macedo, of the Eighth Corporate Court in Rio de
Janeiro, accepted the petition on June 22, giving Varig 60 days
to present its restructuring plan. Creditors then have 30 days
to decide whether they approve.

The court named law firm Cysneiros Vianna Advogados Associados
to manage the proceedings and ordered that any other court
action against Varig be suspended for 180 days.

"This decision is the first step of a journey with our partners
to rebuild the largest airline in the country," said Varig's
President Henrique Neves in a statement.

Meanwhile, Jose Diniz, managing director at Sao Paulo law firm
Alvarez & Marsal LLC, who has worked on the sidelines of the
Varig case, expressed pessimism on the outcome of Varig's
bankruptcy process.

Diniz said Varig's creditors are unlikely to approve any
restructuring plan, and that the airline will be declared
bankrupt, and its assets sold off.

He said, however, that Varig may choose to try and sell its
assets before declaring bankruptcy. The airline and its
operating units are "healthy" and "viable" without the
significant debts, and could raise between BRL2-3 billion, Diniz
said.

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)



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

TELECOM: Gets More Time to Pay Off Remaining Debt
-------------------------------------------------
State-owned telco Colombia Telecomunicaciones (formerly known as
Telecom) obtained a six-month extension to pay off debts,
according to Javier Lastra, the Company's chief liquidator.

Business News Americas reports that the government postponed the
June 12 deadline to December 31 this year, giving Telecom more
time to clear its debts.

Lastra believes Telecom, which has cleared 70% of its debt, will
be able to settle everything before the new deadline. The
Company will still have debts after December 31 but these mature
in 20 years, according to Lastra.

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



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

AIR JAMAICA: Govt. Struggles to Put Airline's Finances in Order
---------------------------------------------------------------
The government is yet to prove that its decision to assume
control of Air Jamaica in December 2004 was for the betterment
of the airline.

The Jamaica Observer reports that Air Jamaica lost US$61 million
for the first five months of the year. The figure represents an
acceleration of the hemorrhaging that took place when the
airline was in private hands.

However, the airline's new management assured that the bleeding
will be curbed once the recent cost containment measures begin
to take effect.

Air Jamaica's executive chairman, Dr. Vin Lawrence, revealed
that that an operating deficit of US$36 million had been
budgeted for the first six months of this year.

However, unforeseen disruption of services, caused primarily by
an increase in the frequency of major maintenance, and route
restructuring, had added another US$25 million in expenses.

Prior to the government's takeover of Air Jamaica in December
last year, the airline had been losing an average of US$65
million per year over the 10 years that it was in private hands.

CONTACT: AIR JAMAICA
         Corporate Communications
         Tel: 876-922-3460 ext 4060-5
         URL: www.airjamaica.com



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

AOL LATIN AMERICA: Enters Executive Retention Agreements
--------------------------------------------------------
America Online Latin America, Inc. ("AOLA") entered on June 16,
2005 into Executive Retention Agreements with Charles Herington,
AOLA's President and Chief Executive Officer and Osvaldo Banos,
AOLA's Executive Vice President and Chief Financial Officer. The
Executive Retention Agreements were initially approved in 2004,
but were not executed until June 16, 2005.

CONTACT: AOL Latin America
         6600 N. Andrews Ave.
         Suite 400 Ft. Lauderdale
         FL 33309
         Phone:(954) 233-1803



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

COPACO: President to Prevent Launching of Mobile Service
--------------------------------------------------------
State-run fixed line operator Copaco's plans to launch a GSM
mobile service may not materialize in the near term, according
to Business News Americas.

Paraguay's President Nicanor Duarte, with the support of his
party, Partido Colorado, and cabinet members, plans to thwart
Copaco's efforts to implement the project on concern that it may
not be able to keep up with the competition in the mobile
sector, that's already covered by experienced, private companies
with state of the art technology.

Duarte understands that Copaco has the right to a mobile license
and is exploring this avenue so that it would be a more
attractive purchase should the government attempt to privatize
it.

But the President and his followers recommend that Copaco must
become profitable and put its books in order before it can think
about investing the US$12 million earmarked for this project.

It would make more sense to use the US$12 million to help pay
off Copaco's longstanding interconnection debt with incumbent
mobile operators, said congressman Nelson Chavez.



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

PDVSA: Ownership of CITGO Affects Unit's Ratings
------------------------------------------------
Rationale

The ratings on Houston, Texas-based CITGO Petroleum Corp.
reflect the company's competitive position in the highly
cyclical and capital-intensive U.S. refining and marketing
industry, and risks associated with its ownership by Petroleos
de Venezuela S.A. (PDVSA), the national oil company of
Venezuela, which constrains the ratings at CITGO.

CITGO holds and operates several of PDVSA's U.S. refining and
marketing operations, which include three wholly owned fuel
refineries, two asphalt refineries, and (in a nonoperating
position) its 42% interest in the Lyondell-CITGO Refining L.P.
joint venture. The gross crude capacity of CITGO's refineries is
about 1.13 million barrels per day (bpd)--net crude capacity is
970,000 bpd--placing it among the largest refiners in the U.S.
The company has supply arrangements with more than 14,000
branded service stations mainly east of the Rocky Mountains.
CITGO does not own the stations, however, and thus does not
benefit directly from convenience store and other nonfuel
revenue.

The competitive strengths of the refining operations are its
ability to process large volumes of heavy, sour crude oils,
which trade at sharp discounts to better-quality crude oil, into
high-margin products, and large average unit sizes that
translate into economies of scale. The refiner's profitability
is limited by the concentration of its operations in the highly
competitive Gulf Coast market, which usually has the lowest
margins in the U.S.

Standard & Poor's applies a higher rating to CITGO than to PDVSA
because of the relative strength of the refiner's financial
profile, the covenant protection in CITGO's financing
arrangements, and the asset protection afforded to CITGO
creditors if CITGO defaults for PDVSA-specific reasons (i.e., a
Venezuela sovereign default). Nevertheless, CITGO could be
challenged by events surrounding PDVSA.

To mitigate the boom-and-bust nature of refining margins, CITGO
has entered into long-term crude oil supply contracts with
PDVSA, which have margin-stabilization provisions. As such,
CITGO's cash flows are significantly less volatile than those of
its peer group. However, adverse changes to these contracts can
trigger events of default under CITGO's financing arrangements.
These contracts are favorable to CITGO's credit quality and
their revision or elimination could result in negative actions
on CITGO's rating.

CITGO remains highly dependent on PDVSA not merely through the
ties of ownership, but also because PDVSA is CITGO's largest
crude supplier. Changes in crude deliveries can have severe
consequences for CITGO's financial performance, because heavy
crude oils with similar margins as Venezuelan crude may not be
available in the market. CITGO is particularly vulnerable,
because much of the refiner's crude is delivered under very
favorable trade credit terms (30 days). As such, Standard &
Poor's incorporates the risk of the refiner suffering from
PDVSA's potential operating and financial difficulties into
CITGO's ratings. Most recently, the Venezuelan government has
suggested that PDVSA might sell CITGO to take advantage of high
refinery valuations, and for political reasons. The effect of
the sale by PDVSA on CITGO's ratings would depend on the form
the sale took, and on whether CITGO retained the crude supply
contracts with Venezuela. To date, however, no concrete sale
plan has emerged.

While the intermediate-term outlook for refining margins is
generally favorable, CITGO still faces significant challenges,
primarily the funding of nearly $1 billion (through 2008) of
required investments to meet clean-fuel standards. CITGO's funds
from operations (FFO) should average about $600 million per year
(translating into about 50% FFO to total debt and about 10% free
operating cash flow to total debt), but volatile margins and
working-capital requirements can cause actual cash available for
capital investment and debt service to vary widely. (Annual FFO
since 2002 has ranged from about $200 million to about $1
billion.) Standard & Poor's expects CITGO to generate
substantial operating cash flow relative to planned capital
expenditures in 2005. However, Standard & Poor's also expects
much free cash flow to be returned to PDVSA through dividends.

Liquidity

CITGO's has strong liquidity, mainly due to favorable refining
margins. As of March 31, 2005, CITGO has unrestricted cash
balances of about $240 million. Available bank-borrowing
capacity totals about $260 million, and CITGO has no borrowings
on its $350 million accounts-receivable conduit. The company's
next sizable maturing debt is in 2006, when about $200 million
comes due. CITGO recently repaid a $200 million secured term
loan from its cash balances, which climbed during 2004 as a
result of strong cash flow.

CITGO should be self-financing during most phases of the
refining cycle, assuming that CITGO's crude supply from
Venezuela is not interrupted. Under average cyclical margins,
CITGO's FFO should be sufficient to fund future capital
expenditures, which the company estimates will average about
$500 million per year through 2007. However, the volatile and
cyclical nature of refining margins may cause CITGO to
periodically draw on its bank credit facilities to fund ongoing
working-capital and capital-investment requirements. In a severe
cyclical downturn, CITGO's annual cash needs (assuming the
refinancing of debt maturities) are unlikely to exceed $300
million.

Outlook

The outlook on CITGO is stable. Future rating changes will be
linked to ratings changes on PDVSA. Presently, PDVSA ratings
limit CITGO's credit rating, despite a financial profile that
would be commensurate with a higher rating level and ratings
improvement is unlikely under existing ownership. Factors that
could result in lower ratings include an extended period of
reduced refining margins, unscheduled equipment outages, and
overspending operating cash flow, each of which would negatively
affect the company's business and financial profiles.

Primary Credit Analyst: Ben Tsocanos, New York (1) 212-438-1995;
ben_tsocanos@standardandpoors.com


PDVSA: Slams Reports Suggesting Citgo Sale
------------------------------------------
State oil company Petroleos de Venezuela (PDVSA) denied reports
that it is selling its US refining and distribution arm Citgo.

PDVSA is "evaluating the profitability" of Citgo, PDVSA Deputy
President for Exploration and Production Luis Vierma told
lawmakers and reporters on Tuesday.

"We are not saying we will sell CITGO ... what we are saying is
that we have set up a committee that will estimate the value of
each of our assets in the refining sector ... and depending on
this appraisal, PDVSA will take the decisions needed to
strengthen the businesses that generate a lot of value, and see
what to do with those which have less."

PDVSA President and Energy and Oil Minister Rafael Ramirez said
earlier this year that some Citgo assets could be sold off and
that PDVSA had even met with prospective buyers.

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: Analysts Apprehensive of Reform Bill
-------------------------------------------
Analysts believe that keeping tabs on PDVSA's production volumes
and spending will prove to be difficult once a proposed reform
to the law governing the sale of PDVSA's export revenues to the
Central Bank is passed, according to Business News Americas.

"Once the reform that has been presented [to the national
assembly] is passed, it will be hard to know the flow of oil
revenue with any accuracy, making uncertainty about volumes even
greater," said Miguel Angel Santos, an economist and professor
at the IESA management institute.

"It's a sign there will be an opaque handling of [public]
finances because the spending will be unknown. The government
will not give explanations about how the revenues are being
employed," Santos added.

The present law stipulates that PDVSA must sell to the Central
Bank all of the foreign currency it obtains from oil exports. To
keep any of the money, it needs to get the approval of the
Central Bank first.

With the new law, PDVSA will only have to sell a certain amount
of revenues to the bank to cover operating expenses and fiscal
contributions, but it will not need the bank's approval to spend
the remainder of its export revenues.

The idea is that PDVSA could contribute a large portion of its
oil export windfall to a US$5-billion government fund for
education, health and debt-reduction programs.



                            ***********


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

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