TCRLA_Public/050629.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

           Wednesday, June 29, 2005, Vol. 6, Issue 127



AGUAS PROVINCIALES: Source Claims Suez Accepts Emgasud's Offer
AOL LATIN AMERICA: Chapter 11 Filing Prelude to Shutdown
BANCO GALICIA: Unit to Seek Shareholder's OK to Issue $50M Bonds
BI S.A.: Declared Bankrupt by Court
CAPEX: S&P Assigns `D' Rating Following Debt-Restructuring

FERRICOR S.A.: Verification of Creditors' Claims Ends
INSTAL TUBE: Asks Court for Reorganization
ITALPANAL S.A.: Court Grants Reorganization Plea
J.B.F. S.A.: Court Designates Trustee for Liquidation
LA PANADERIA S.A.: Trustee Closes Claims Verification Phase

LGD PUBLICIDAD: Court Rules for Liquidation
NOR CON PROYECTOS: Begins Liquidation
PAY BACK: Trustee Closes Claims Verification Phase
PETROBRAS ENERGIA: S&P Releases Ratings Analysis


BANCO VOTORANTIM: S&P Rates $100M, Medium-Term Notes 'BB-'
BRASKEM: Plans Venture With Pequiven to Build Venezuelan Plant
LOCALIZA RENT: Publishes Result of Shares Public Offering


EDT: Six Firms Eyeing Assets

C O S T A   R I C A

ICE: Disproves Deficiency Claims on Int'l Roaming Service

D O M I N I C A N   R E P U B L I C

* DOMINICAN REPUBLIC: CB Former Exec Defends Bank's Actions


PETROECUADOR: Board Names New VPs for 3 Divisions

E L   S A L V A D O R

BANCO AMERICANO: Deposit Outflows Pull Down Ratings


MILLICOM INTERNATIONAL: May 31 Meeting Fails to Reach Quorum


EMPRESAS ICA: Vying For Commuter Train Contract


PDVSA: Claims it is World's Hydrocarbon Reserve Leader

     -  -  -  -  -  -  -  -


AGUAS PROVINCIALES: Source Claims Suez Accepts Emgasud's Offer
French water giant Suez has accepted Argentine company Emgasud's
offer to buy its shares in Aguas Provinciales de Santa Fe, El
Cronista reports, citing a source close to the negotiations.

"Suez has already accepted the economic offer presented by
Emgasud. In fact, they signed a pre-agreement which is looked
upon favorably by the Santa Fe government, and the deal is close
to being finalized," the source said.

Suez reportedly signed last week an exclusive agreement with
Fides Group and Grupo Energia BV, both controlled by Emgasud,
for the sale of its share in Aguas Provinciales. The agreement
stipulates that the sale must come into effect by July 31.

Aside from buying Suez's 51.69% share in Aguas Provinciales,
Emgasud will also take over the stakes owned by Interagua
(14.92%) and Aguas de Barcelona (10.9%). Emgasud has also
contacted Banco Galicia regarding its 12.5% in Aguas

Emgasud is a natural gas distributor in Buenos Aires province
owned by Argentine businessman Alejandro Ivanissevich.

AOL LATIN AMERICA: Chapter 11 Filing Prelude to Shutdown
America Online Latin America, Inc., together with its
subsidiaries -- AOL Puerto Rico Management Services, Inc.,
America Online Caribbean Basin, Inc., and AOL Latin America
Management LLC -- filed voluntary chapter 11 petitions in the
United States Bankruptcy Court for the District of Delaware on
June 24 in preparation for a plan to wind down its businesses.

The Debtors could wind down their businesses by either selling
all or a portion of their assets and closing those that could
not be sold. Each of the Debtors' board of directors and board
of managers have approved the wind-down of operations.

The AOLA Group, as a whole, has never generated positive cash
flow since its inception in 1998. Other than the proceeds
received from the issuance of senior convertible notes due in
March 2007, the Debtors relied heavily on certain affiliates'
equity capital and the U.S. public equity market for their
working capital needs and expenses. For the three-month period
ended March 31, 2005, the Debtors recorded a $72.6 million net
loss on $12.8 million of revenues. The Debtors reported
approximately $1 billion in accumulated deficit as of March 31,

                     Liquidation Plan

Before filing for bankruptcy, the Debtors and their principal
stockholders, including Time Warner and AOL Online, negotiated
the terms of a plan of liquidation under a letter and support

Pursuant to the letter agreement, the principal stockholders
agreed to support a Plan that provided for the subordination of
America Online's and Time Warner's claims to the general
unsecured creditors. Consenting creditors will receive 100% of
the allowed amount of their claims if they release the principal
stockholders from any liability. From the remaining available
cash, the Debtors will distribute 60% to America Online and Time
Warner while 40% will go to the 31.6% equity stakeholder, The
Cisneros Group.

In light of the letter and support agreement, the Debtors expect
to file a disclosure statement explaining a Plan of Liquidation
with the Bankruptcy Court as soon as possible.

AOL Latin America's other subsidiaries will continue normal
operations, and its subscribers will continue to receive the
America Online branded service without interruption.

Headquartered in Fort Lauderdale, Florida, America Online Latin
America offers AOL-branded Internet service in Argentina,
Brazil, Mexico, and Puerto Rico, as well as localized content
and online shopping over its proprietary network. The Company
and three of its affiliates filed for chapter 11 protection on
June 24, 2005 (Bankr. D. Del. Case No. 05-11778 through 05-
11781). Edmon L. Morton, Esq., Margaret B. Whiteman, Esq., and
Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor,
LLP, represent the Debtors in their liquidation efforts. When
the Debtors filed for protection from their creditors, they
listed $28,500,000 in total assets and $181,774,000 in total

As of June 24, 2005, the AOLA Group employs 346 full-time
workers -- 67 in Brazil, 87 in Mexico, 146 in Argentina, 19 in
the United States and 27 in Puerto Rico.

CONTACT: America Online Latin America, Inc.
         6600 N. Andrews Ave.
         Suite 500
         Fort Lauderdale, FL 33309
         Phone: 954-689-3000

BANCO GALICIA: Unit to Seek Shareholder's OK to Issue $50M Bonds
Tarjeta Naranja, the credit card arm of Banco de Galicia y
Buenos Aires S.A., the largest private sector commercial bank in
Argentina, plans to issue US$50 million worth of five-year

According to Business News Americas, the unit will ask
shareholders to approve the proposal on July 14. Proceeds of the
operation will be used to finance the unit's ongoing business

Earlier this year, Tarjeta Naranja sold ARS30 million
(US$10.2mn) of commercial papers in an operation that saw demand
from retail and institutional investors reach ARS62.3 million.

CONTACT:  Banco De Galicia Y Buenos Aires
          Tte Gral Juan D Peron 407
          Buenos Aires
          Phone: +54 11 6329 0000
          Fax: +54 11 6329 6100

BI S.A.: Declared Bankrupt by Court
BI S.A. is now "Quiebra" - meaning bankrupt, says Infobae. Mar
de Plata's civil and commercial Court No. 6 decreed the
Company's bankruptcy and appointed Lia Stella Maris Alvarez, as
receiver for the Company.

Ms. Alvarez will be reviewing creditors' claims until Nov. 4,
2005. Analyzing these claims is important because the outcome of
the process will determine the amount each creditor will get
after all the assets of the Company are liquidated. The court,
which is aided by Clerk No. 2, will conclude the bankruptcy
process by liquidating the Company's assets to repay creditors.

         Jacinto Peralta Ramos 1410
         Mar del Plata

         Ms. Lia Stella Maris Alvarez, Trustee
         Santa Fe 2160
         Mar del Plata

CAPEX: S&P Assigns `D' Rating Following Debt-Restructuring
The 'D' corporate credit rating on Argentine power generator
CAPEX S.A. reflects the company's debt-restructuring process
following the decision to suspend payments of principal on its
financial debt during 2002.

The rating will remain at 'D' until the company completes the
debt restructuring. CAPEX has shown progress in restructuring
the debt by refinancing a US$27.5 million secured debt in March
2004 and reaching an agreement with 100% of the creditors of
unsecured debt for about US$250 million in April 2005. In
addition, CAPEX repaid US$0.2 million of the US$27.5 million
debt in January 2005 and reached a new agreement with that
debt's creditors to change the amortization schedule. As a
result, the US$27.3 million outstanding secured debt will now
have to be exchanged for a new bond to be issued by CAPEX or
fully repaid before Dec. 31 2005.

CAPEX operates a 672 MW, natural gas-fired plant in Argentina.
The company's business and financial profile significantly
eroded since 2002 mainly because of the indirect pesification of
electricity prices in Argentina, combined with the Argentine
peso's strong devaluation. In this sense, the strong decrease of
electricity prices in U.S. dollar terms created a strong
imbalance between the company's highly peso-related cash
generation and the evolution of its mostly U.S. dollar-
denominated financial debt, which reached US$294 million in
January 2005. As a result of this situation, the company's
leverage increased to a high 73.3% as of January 2005 from 52%
as of April 2001. Although CAPEX engages in nonregulated
businesses, such as crude oil exploration and production and
liquefied petroleum gas and gasoline production, power
generation (partly fueled by its own gas reserves) continues to
be the company's core business (about 60% of sales).

Because of the pesification and freeze on electricity tariffs
charged by distribution companies to end-users, the energy price
that is passed through to end-users (and remitted to Cammesa,
the wholesale electricity market administrator, who then pays
the generators) is not enough to cover generation costs,
especially during winter when more higher-cost thermal power
generators are dispatched. In this context, the country's energy
secretary issued Resolution 240 in August 2003 reducing the spot
price for electricity to a level equal to the variable cost of
the next natural gas-fired unit to be dispatched into the pool
system. Thus, the variable cost incurred by power generators
that need to burn fuel no longer influences the spot price.
Before the resolution, the electricity price was set relative to
the next generating unit to be dispatched, regardless of fuel.
This measure further deteriorated Argentine power generators'
financial condition. However, despite Resolution 240, funds
remitted to Cammesa continued to be insufficient to cover power
generation costs. As a result, power generators (mainly hydro
generators) are not collecting 100% of their sales and are
accruing growing credits with Cammesa, which were partly reduced
in late 2003 and in 2004 thanks to loans from the government to
Cammesa. However, through Resolution 1427 dated Dec. 6, 2004,
the energy secretary offered power generators to apply at least
65% of the uncollected sales for January 2004 through December
2006 as an equity contribution into a fund that will finance the
construction of new thermal power generation capacity of at
least 800 MW. The Argentine government will mainly provide the
cash that will finance the construction of the new power
generation capacity. In exchange, the energy secretary is
committed to gradually increase electricity prices in the next
few years and to return to the marginal cost system defined by
Law 24.065 after the the new power generation capacity starts up
by 2007. CAPEX has already accepted the energy secretary's
proposal, but its uncollected credits with Cammesa are not

The Argentine electricity industry's decreasing capacity
reserves as a result of the strong increase in electricity
demand since second-half 2002, combined with a low availability
of water and natural gas to generate electricity, resulted in
interruptions to interruptible customers during first-quarter
2004. Despite some mitigating measures taken by the Argentine
government (such as importing natural gas from Bolivia and
importing fuel oil for thermal generation), thermal power
generators could be affected by a low availability of natural
gas during longer periods throughout the year compared with
shortages mainly during the peak winter season years before.
However, CAPEX is protected from such risk because part of the
plant's natural gas consumption comes from its own natural gas
reserves. In addition, CAPEX's operating margins and cash
generation have already improved in the nine months ended
January 2005 and is projected to continue improving due to the
higher electricity prices in May 2004 through July 2005 to large
users as a consequence of the natural gas price-increase path
established between the government and producing companies.

CAPEX's primary business is generating electricity in the
Comahue region in southwestern Argentina. Its thermal plant,
with six gas-fired units and one steam unit, has an installed
nominal capacity of 672 MW, representing about 3% of total
installed capacity in the Sistema Argentino de Interconexi˘n.
CAPEX is controlled by Compa¤Ħa Asociadas Petroleras S.A.
(CAPSA) through a 60% ownership stake, with the rest trading on
the Buenos Aires and Luxembourg stock exchanges. CAPSA is a
privately owned company that explores for, develops, produces,
and sells oil.


CAPEX's financial flexibility and liquidity position are
severely restricted because of the company's current default
situation. As of Jan. 31, 2005, the company had US$294 million
in financial debt, while cash reserves reached only US$17
million. CAPEX's liquidity will remain constrained until the
company restructures its debt profile and electricity prices in
Argentina significantly increase.

Primary Credit Analyst: Sergio Fuentes, Buenos Aires (54) 114-

Secondary Credit Analyst: Mariano Ingaramo, Buenos Aires (54)

FERRICOR S.A.: Verification of Creditors' Claims Ends
Trustee Jorge Jauregui Lorda will cease the verification of
claims of creditors of Ferricor S.A. tomorrow, June 30, 2005.
Creditors who failed to submit claims could not participate in
the Company's settlement plan.

Mr. Lorda, who was appointed by the court, will then prepare
individual reports based on the validated claims. He is also
tasked to present to court a general report.

La Plata's civil and commercial Court No. 12 converted the
Company's bankruptcy case into a "concurso preventivo", allowing
the Company to draft a proposal designed to settle its debts
with creditors and have it presented during the informative
assembly. Reorganization also prevents an outright liquidation.

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

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

INSTAL TUBE: Asks Court for Reorganization
Instal Tube S.A., a company operating in Buenos Aires, has filed
a petition to undergo reorganization after failing to pay its
liabilities, reports Infobae.

The reorganization petition, once approved by the court, will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

The case is pending before the city's civil and commercial Court
No. 5. Clerk No.10 assists on this case.

CONTACT: Instal Tube S.A.
         Brandsen 257/261
         Buenos Aires

ITALPANAL S.A.: Court Grants Reorganization Plea
Italpanal S.A., a company operating in Buenos Aires, begins
reorganization proceedings after the city's civil and commercial
Court No. 14, with assistance from Clerk No. 27, granted its
petition for "concurso preventivo".

During the reorganization, the Company will be able to negotiate
a settlement proposal for its creditors so as to avoid a
straight liquidation.

According to Argentine news source Infobae, the reorganization
will be conducted under the direction of Penna y Steinhaus, the
court-appointed trustee.

Creditors with claims against Italpanal S.A. must present proofs
of the company's indebtedness to the trustee before Aug. 18,
2005. These claims will constitute the individual reports to be
submitted in court on Sep. 29, 2005. The court also requires the
trustee to present an audit of the Company's accounting and
business records through a general report due on May 19, 2006.

CONTACT: Italpanal S.A.
         Esmeralda 740
         Buenos Aires

         Penna y Steinhaus, Trustee
         Defensa 649
         Buenos Aires

J.B.F. S.A.: Court Designates Trustee for Liquidation
Buenos Aires accountant Gustavo Alejandro Pagliere was assigned
trustee for the liquidation of local company J.B.F. S.A.,
relates Infobae.

Mr. Pagliere will verify creditors' claims until Aug. 29, 2005,
the source adds. After that, he will prepare the individual
reports, which are to be submitted in court on Oct. 17, 2005.
The submission of the general report should follow on Nov. 30,

The city's civil and commercial Court No. 9 handles the
Company's case. Clerk No. 17 assists the court with the wind-up

CONTACT: Mr. Gustavo Alejandro Pagliere, Trustee
         Tucuman 1424
         Buenos Aires

LA PANADERIA S.A.: Trustee Closes Claims Verification Phase
The verification of claims of creditors of La Panaderia S.A.
will end on Thursday, June 30, 2005.

The validated claims will be presented in court as individual
reports on Aug. 26, 2005, to be followed by a general report,
which contains a summary of the company's financial status as
relevant events pertaining to the bankruptcy on Oct. 7, 2005.

Court No. 26 of Buenos Aires' civil and commercial tribunal
appointed Jose Miguel Fernandez as trustee after declaring La
Panaderia S.A. bankrupt. The bankruptcy process will end with
the disposal of the Company's assets in favor of its creditors.

CONTACT: La Panaderia S.A.
         Sarandi 248
         Buenos Aires

         Mr. Jose Miguel Fernandez, Trustee
         Junin 55
         Buenos Aires

LGD PUBLICIDAD: Court Rules for Liquidation
Court No. 7 of San Isidro's civil and commercial tribunal
ordered the liquidation of LGD Publicidad S.R.L. after the
Company defaulted on its obligations, Infobae reveals.

The liquidation pronouncement will effectively place the
Company's affairs as well as its assets under the control of
Marcelo Ruben Hermida, the court-appointed trustee.

Mr. Marcelo Ruben Hermida will verify creditors' proofs of claim
until June 30, 2005. The verified claims will serve as basis for
the individual reports to be submitted in court on Aug. 30,
2005. The submission of the general report follows on Sep. 27,

Court No. 13 assists the court on this case, which will end with
the disposal of the Company's assets in favor of its creditors.

CONTACT: Mr. Marcelo Ruben Hermida, Trustee
         Centenario 566
         San Isidro

NOR CON PROYECTOS: Begins Liquidation
Nor Con Proyectos y Construcciones S.A. of Buenos Aires will
begin liquidating its assets after Court No. 17 of the city's
civil and commercial tribunal declared the Company bankrupt.
Infobae reveals that the bankruptcy process will commence under
the supervision of court-appointed trustee, Donato Antonio

The trustee will review claims forwarded by the Company's
creditors until Aug. 31, 2005. After claims verification, Mr.
Sarcuno will submit the individual reports for court approval on
Oct. 20, 2005. The general report will follow on Dec. 12, 2005.
Clerk No. 33 assists the court on this case.

CONTACT: Mr. Donato Antonio Sarcuno, Trustee
         Bernardo de Irigoyen 330
         Buenos Aires

PAY BACK: Trustee Closes Claims Verification Phase
Trustee Jorge Gillermo Podesta, who was appointed by Court No. 2
of Buenos Aires' civil and commercial tribunal, will stop
verifying claims of creditors of Pay Back S.A. tomorrow, June
30, 2005.

The trustee will then prepare individual reports, which will be
submitted to court on Sep. 9, 2005. He will also present a
general report on Oct. 24, 2005.

The court, with the assistance of Clerk No. 4, appointed the
trustee after it declared the Company "quiebra". The case will
close with the liquidation of the Company's assets to repay

CONTACT: Jorge Guillermo Podesta
         Reconquista 336
         Buenos Aires

PETROBRAS ENERGIA: S&P Releases Ratings Analysis
The rating on Petrobras Energia S.A, (PESA) reflects its
relatively aggressive financial profile, significant need for
capital expenditures (to develop its large reserve base and
increase production levels), high exposure to the Republic of
Argentina's uncertain and rapidly changing economic and
regulatory rules, and the uncertainties surrounding the utility
business in which the company participates. The rating also
incorporates Standard & Poor's perception of increasing economic
incentives for Brazilian-based Petroleos Brasileiros S.A.
(Petrobras) to support its subsidiary. In light of the cross-
default clauses between Petrobras and PESA, the recent merger of
most of Petrobras's Argentine operations under PESA and the
intercompany US$200 million loan granted in February 2005 show a
higher commitment from Petrobras to PESA and enhance PESA's
financial flexibility.

PESA, an Argentine-based subsidiary of Petrobras, is the third-
largest oil and gas production company in the country and is
involved in several energy-related businesses in Argentina,
Ecuador, Venezuela, and Bolivia, among other countries. PESA has
US$2 billion in total debt outstanding.

Effective Jan. 1, 2005, PESA absorbed refining, marketing, and
upstream operations formerly under EG3 S.A., Petrolera Santa Fe
S.A., and Petrobras Argentina S.A. The assets merged (all based
in Argentina) are a 31,000-barrels-per-day refinery in Buenos
Aires, approximately 700 service stations in Argentina, 18,100
barrels of oil equivalent (boe) per day of production, and
reserves for 70 million boe. These assets will strengthen PESA's
Argentine business position by providing further integration
between upstream and downstream operations while increasing
crude oil production and economies of scale, but the cash flow
from these assets would not significantly change the company's
credit measures. We believe the most significant credit effect
comes from the broader financial flexibility provided by higher
incentives for Petrobras' commitment to its subsidiary.

In addition, in February 2005, Petrobras granted a 10-year,
US$200 million loan to PESA that was used (with additional cash
reserves and some local loans) to prepay approximately US$365
million in bonds with an original final maturity in 2007. This
transaction implies not only a reduction in PESA's debt with
third parties, but also an improvement of its debt maturity
profile and an enhancement in financial flexibility derived from
the release of certain covenants included in the prepaid

With sales of more than $2.4 billion in fiscal 2004 and
consolidated assets of approximately $5.6 billion (considering
proportional consolidation in companies under joint control, but
excluding the assets of EG3, Petrolera Santa Fe, and Petrobras
Argentina), PESA is one of the most important energy companies
in Argentina and the Southern Cone. As of December 2004, the
company had proved reserves of 732 million boe and had reached
an average production of 166,700 boe per day, which results in a
reserve life of 12.2 years. Its reserve base is leveraged to oil
(75%), and 36% is located in Argentina, showing the increase in
the company's international diversification in recent years. A
proved-developed ratio of only 52% implies the need for
additional capital expenditures to bring these reserves into
production. PESA's reserve base decreased 3.5% in 2004 and 6.8%
in 2003, mainly as a consequence of lower capital expenditures
than before the crisis. An improving reserve replacement ratio
(57% in 2004 from 30% in 2003) is still weak and will depend
mainly on the evolution of realization prices in Argentina for
both crude oil and natural gas.

In our opinion, PESA's ability to fund capital expenditures is a
major credit factor. The company needs to develop its reserve
base and increase production to grow in the exploration and
production (E&P) business, thus improving its future repayment
capacity. Given PESA's debt relative to its generation ability,
we believe the company will need to refinance some of its
existing obligations to internally fund the required significant
investments. In this context, PESA's access to the capital
markets and its financial flexibility are key. We do expect some
potential support from its parent in light of economic
incentives and the existence of cross-default clauses between
Petrobras' indebtedness and PESA's debt. Nevertheless, according
to our criteria, the mere existence of such clauses does not
merit equalization of the perception of parent credit quality to
the subsidiary.

The hydrocarbon sector in Argentina is affected by political
decisions that might have an effect on the sustainability of the
industry's profitability in the medium to long term. In 2004,
President Nestor Kirchner's administration did the following:

- Modified many regulations jeopardizing the companies' credit
- Curtailed natural gas exports to Chile;
- Proposed the creation of a new state-owned energy company
(Enarsa) that will operate in the hydrocarbon industry,
increasing uncertainties about the government's willingness to
interfere in the sector;
- Pressured producers to invest in infrastructure projects
(mostly pipelines); and
- Pressured producers and refiners not to increase the price of
retail refined products.

Government intervention in Argentina (mainly through export
duties and pressures to keep domestic fuel prices low) and
certain outstanding hedging derivatives contracts prevented the
company from fully benefiting from the extraordinarily high
international prices. The current hedge portfolio matures in
December 2005. Although PESA might incur some hedging activity
in the future, we do not expect price coverage to be as
extensive as in the past. However, despite the challenges
mentioned above, the current favorable price environment has
still resulted in attractive realization prices for PESA due to
geographical and product diversification, its adequate cost
structure, and operating synergies derived from the integration
of upstream and downstream activities.

Improving coverage measures are adequate for the rating
category, but are still relatively weak compared with those of
its industry peers under the current price environment. Coverage
measures continue to depend on further increases in crude
production; therefore, capital expenditures will remain critical
for the company's cash generation. Funds from operations to
total debt improved to 20% in fiscal 2004 from 17.1% in 2003.
Similarly, EBITDA interest coverage reached 4.7x in 2004 from
3.6x in 2003. The combined effect of an expected gradual debt
reduction and improvements in cash generation (mainly given the
cash flow incorporated by the merged assets and the expiration
of some derivatives contracts) should positively affect credit
measures in the short to medium term, even assuming a more
conservative price scenario for crude oil. During first-quarter
2005, EBITDA interest coverage reached an adequate 6.0x, mainly
as a result of better operating results derived from increased
realization prices.

PESA's capital structure is relatively aggressive for the
Argentine economic and business environment. Total debt to
capitalization decreased to a still relatively high 46.5% as of
March 31, 2004 (without considering proportional consolidation),
compared with 50.1% as of year-end 2004, mainly as a result of
the positive impact in net worth of 2004 results and the
inclusion of the merged assets in the balance sheet.


PESA's liquidity is adequate for the rating category. As of
March. 31, 2005, total debt amounted to $2 billion, including
approximately $480 million in the short term (without including
proportional consolidation of subordinates under joint control),
while cash reserves amounted to $260 million. Market
identification of PESA with the Petrobras group would help PESA
in its refinancing needs, at least in the short term. In
addition, the elimination of some restrictive financial
covenants after the early repayment of the bonds with an
original final maturity in 2007 is a positive factor.

As mentioned above, however, PESA needs to make significant
capital expenditures to develop its reserves, which will draw on
its liquidity position. Therefore, in a scenario of
significantly lower crude oil prices, we do not expect PESA to
significantly reduce its investments without jeopardizing its
future production level and its ability to repay debt.

In the past, dividend policy was relatively moderate, and we do
not expect PESA to make significant dividend payments that would
jeopardize its debt repayment capacity. Instead, we expect PESA
to direct cash generation to capital expenditures to increase
production capacity, and to reduce financial debt, thereby
improving the capital structure.


Since the fiscal year ended Dec. 31, 2003, and in accordance
with Argentine accounting rules, PESA began to proportionally
consolidate into its financial statements those companies over
which it exercises joint control (in addition to the already
consolidated companies over which it exercises exclusive
control). Companies under joint control are Distrilec Inversora
S.A. (holding company of electric distributor Edesur S.A.);
Compa¤Ħa de Inversiones de EnergĦa S.A. (CIESA, the holding
company of gas transportation company Transportadora de Gas del
Sur S.A.--TGS); and Compa¤Ħa Inversora en Transmisi˘n El‚ctrica
S.A. (Citelec, the holding company of electric transmission
company Compania de Transporte de Energia Electrica en Alta
Tension--TRANSENER S.A.). Nevertheless, the company has not
proportionally consolidated Citelec, considering its commitment
to divest such participation. As a consequence of this change in
accounting rules, consolidated figures since 2003 are not
directly comparable to previous years' figures and include items
over which PESA does not exercise exclusive control. PESA's cash
and debt management are independent from those subsidiaries
under joint control; PESA has no obligations or cross-default
clauses with those companies, nor does it expect to receive any
dividends from them in the near future. Consequently, PESA's
repayment capacity will continue to depend on the performance of
its E&P division, and to a lesser extent on its refining,
marketing, and petrochemical activities.


The positive outlook reflects our expectations that if the
company can successfully increase production and reduce
leverage, Petrobras would have additional economic incentives to
support it, and therefore, the ratings could be raised. We
expect PESA to increase crude oil production by at least 5% in
the next two years. In addition, we expect PESA to generate
positive free operating cash flow that allows for significant
debt reduction, particularly in 2005, while improving the
maturity profile. The ratings could come under pressure if we
perceive increased government intervention that could materially
jeopardize the company's profitability and cash generation
ability, thereby reducing the parent's incentive to support it.

Primary Credit Analyst: Pablo Lutereau, Buenos Aires
(54) 114-891-2125;

Secondary Credit Analyst: Luciano Gremone, Buenos Aires
(54) 11-4891-2143;


BANCO VOTORANTIM: S&P Rates $100M, Medium-Term Notes 'BB-'
Standard & Poor's Ratings Services assigned its 'BB-' foreign-
currency credit rating to Banco Votorantim S.A.'s $100 million
medium-term, floating-rate notes, to be issued in July 2005 and
maturing in three years.

"The ratings on Banco Votorantim S.A. incorporate the potential
risks associated with the bank's treasury business; its exposure
to sovereign risk through its government securities portfolio, a
common issue for Brazilian banks; and the risks associated with
the volatile economic environment in Brazil that might cause
asset quality deterioration," said Standard & Poor's credit
analyst Daniel Araujo.

The ratings benefit from the implicit support of the Votorantim
Group (FC: BB-/Stable/--; LC: BBB-/Stable/--); the group's
strong brand name; and the bank's good profitability. The
ratings also factor in the bank's experienced management team
and efficient decision-making processes.

The Votorantim Group is one of the largest and most influential
industrial conglomerates in Brazil. Its brand-name recognition
has helped the bank to leverage on its business, and the images
of both organizations are closely linked. The ratings
incorporate implicit support from Votorantim Group, although
this is not expected in the event of system risk. The Votorantim
Group supervises the bank's activities and operations, and its
conservatism permeates the bank's activities. Banco Votorantim's
management is made up of professionals with vast experience in
the financial markets and the Group's companies.

The stable outlook on Banco Votorantim's local currency rating
reflects a balance between its negative ratings factors, namely
the economic risks of the Brazilian banking industry, and the
potential risks related to asset quality, especially its car
financing segment and its holdings of government securities, and
its positives, including its implicit support from the
Votorantim Group, its good business profile, and its
consistently high profitability. In the event of a downgrade or
negative change for the local-currency sovereign credit rating
and/or outlook on Brazil, the local currency credit rating
and/or outlook on Banco Votorantim would move in tandem. If, on
the other hand, the sovereign local currency rating has positive
changes, the bank would not be automatically affected; we would
make an assessment based on its own merits, on a case-by-case
basis. The main negative item that could generate downward
pressure on the bank's ratings is asset quality and worsening in
profitability. On the upward side, the rating would benefit from
maintaining asset quality under control and qualitative
improvements in profitability and capitalization.

The stable outlook on the foreign currency credit rating on
Banco Votorantim reflects the outlook on the sovereign credit
rating on the Federative Republic of Brazil. At current levels,
a change in the foreign currency sovereign credit rating would
lead to a similar action on the foreign currency rating on Banco

Primary Credit Analyst: Daniel Araujo, Sao Paulo
(55) 11-5501-8939;

Secondary Credit Analyst: Tamara Berenholc, Sao Paulo
(55) 11-5501-8950;

BRASKEM: Plans Venture With Pequiven to Build Venezuelan Plant
Braskem SA, a leader in the thermoplastic resins segment in
Latin America, is in discussions with its Venezuelan counterpart
Pequiven to build a petrochemicals plant in Venezuela, reports
Dow Jones Newswires.

Discussions are centered on how to carry out feasibility studies
and finance the project that could cost up to US$250 million,
said Braskem. The two firms will decide by December whether to
build the plant.

The proposed unit would produce 400,000 tons a year of
polypropylene and be based in the El Tablazo petrochemicals
complex, which is located on the eastern coast of Venezuela's
oil-rich Lake Maracaibo.

The main raw material, propylene, would be supplied at
"competitive" costs by Pequiven's sister company, the
government-run giant Petroleos de Venezuela (PdVSA), Braskem

The project is part of Braskem's international expansion
efforts. Just recently, the Company formed a joint venture with
Petroquisa, a unit of Brazil's government-run oil firm
Petrobras, 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.

The said project is expected to initially produce 300,000 tons a
year and scheduled to begin operations in the second half of

CONTACT: Braskem S.A.
         Jose Marcos Treiger
         Investor Relations Officer
         Phone: 55-11-3443-9529
         Luiz Henrique Valverde
         IR Manager
         Phone: 55-11-3443-9744,
         Luciana Paulo Ferreira
         IR Manager
         Phone: 55-11-3443-9178

LOCALIZA RENT: Publishes Result of Shares Public Offering
Localiza Rent A Car S.A. (Bovespa: RENT3), the largest car
rental network in Latin America with 32 years of existence,
announced Monday the closing of its secondary public offering of
common stocks. The Company's stocks are negotiated at Sao Paulo
Stock Exchange's (BOVESPA) Novo Mercado, a special segment which
requires differentiated corporate governance practices.

In the public offering, coordinated by Credit Suisse First
Boston (CSFB) and Pactual, 23 million of shares were
distributed, considering the full exercise of the over-allotment
option, representing approximately 36.9% of the company's total
and voting capital in Brazil and abroad, to qualified
institutional investors, at R$ 11.50 per stock. The total
proceeds amounted to R$ 264,802,737.50. MBPII Brazil was the
main selling shareholder, a corporation owned by investment
funds established and managed by DLJ (Donaldson, Lufkin &
Jenrette Merchant Banking), currently a CSFB subsidiary.

Approximately 13.3% of the shares sold were allocated to the
domestic market and 86.7% to international investors.
Institutional investors accounted for 41.7% of the total
allocated to the domestic market, whereas retail, which
accounted for the remaining 58.3%, was represented by 785
individual investors.

"Localiza's shares public offering represents a new fase for the
Company, which was already prepared for this action by
practicing corporate governance standards required by Bovespa's
Novo Mercado", says Roberto Mendes, Localiza's CFO and Investor
Relations Executive Officer. Localiza's business platform,
currently comprised by car rental, franchising, and fleet rental
and management business provides the Company with great synergy
to carry out its operations.

About Localiza Rent A Car S.A.

Localiza operates in the car rental and fleet rental business
and in the fleet management and franchising of those businesses.
With 32 years of existence and 299 agencies, Localiza is
currently the largest car rental in Latin America in number of
agencies and the pioneer in fleet management business in Brazil.
Localiza is part of BOVESPA's Novo Mercado and is listed under
the ticker "RENT3."

CONTACT: Investor Relations:
         Silvio Guerra
         Tel: (5531) 3247-7055

         Media information:
         Priscilla Duarte
         PR Contact Phone: (5531) 3247-7879
         Fax: (5531) 3247-7684


EDT: Six Firms Eyeing Assets
The forthcoming auction of defunct Barranquilla-based telco
EDT's assets has attracted expressions of interest from six
firms, reports Business News Americas.

Evamaria Uribe Tobon, head of the public services regulator
Superservicios, revealed that these expressions of interest came
from state-run fixed line operator Colombia Telecomunicaciones
(Telecom), Medellin-based municipal telco EPM and four foreign

By buying EDT's assets, bidders would also be buying stake in
Batelsa, the state-run company that took over operation of the
assets in May 2004. Batelsa is nominally owned by five state

The auction, which is likely to take place in September, will be
a simple case of awarding the assets to the company that bids
most Uribe Tobon said, adding, the proceeds would go towards a
fund to help payoff EDT's pension liability, which was last
(mid-2003) calculated at COP250 billion (US$108mn).

The auction will be managed by local investment bank Corporacion
Financiera del Valle.

Superservicios decided to liquidate EDT in May 2004 due to the
Company's poor financial state and transferred its operations to

C O S T A   R I C A

ICE: Disproves Deficiency Claims on Int'l Roaming Service
Electricity and telecoms monopoly ICE denied claims that its
international roaming service, which it launched in 2003, is
deficient, reports Business News Americas.

"It is incorrect to say that our service does not operate
properly. Billing from visitors shows the contrary," ICE
assistant manager Claudio Berm£dez said.

Edna Camacho, head of the Costa Rican development coalition,
revealed that executives of foreign corporations with operations
in Costa Rica have complained that their staff experience
roaming problems when entering the country, especially from the

Ronald Jimenez, president of Codisa Software Corp, said he did
not experience problems when roaming outside Costa Rica but
complained of delays in billing and that service was sometimes
cut off for non-payment when bills never arrived.

ICE claims its international roaming service generated US$2.5
million in revenue in 2004. The Company said it has contracts
with 26 countries including four operators from the US.

D O M I N I C A N   R E P U B L I C

* DOMINICAN REPUBLIC: CB Former Exec Defends Bank's Actions
The Central Bank's decision not to heed the International
Monetary Fund's (IMF) suggestion that would have compelled it to
close Baninter and permitted an organized process of dissolution
of the bank and its assets pushed the country to the worst
financial crisis in its history, according to the bank's former
general manager.

Instead of heeding IMF's suggestion, the Central Bank, according
to former general Apolinar Veloz, chose to bale out all the
depositors, including members of the board of directors.

Veloz, however, defended the bank's decision, saying that at the
time, there was no time to take a more thought-out decision. By
going against the IMF's recommendation, the Central Bank broke
the Monetary and Financial Law 183-02 and decided to pay
depositors way over and above the RD$500,000 guaranteed by the

Sums of over one million dollars were paid out to Baninter
depositors who held "off-shore" accounts with the bank. Such
deposits were not even contemplated in the law. Huge sums were
even paid out to the members of the Administrative Council who,
in theory at least, were responsible if the bank should
encounter difficulties.

Veloz explained that the authorities had to make decisions such
as whether to return the RD$800 million deposit of Sammy Sosa
and the RD$60 million of the Fundacion Global, the think tank
center of then former President Leonel Fernandez.

Veloz gave his statements to the Hoy newspaper in response to
commentaries made by Julio Ortega Tous, the President's economic
advisor, about the lead-up to the bank crisis of 2003.


PETROECUADOR: Board Names New VPs for 3 Divisions
The board of state oil producer Petroecuador has appointed new
vice-presidents of its exploration and production arm
Petroproduccion, refining arm Petroindustrial and transport and
distribution arm Petrocomercial, reports Business News Americas.

The board appointed Mr. Oscar Garzon Quiroz as vice-president of
Petroproduccion, Mr. Cesar Augusto Hidalgo Gines vice-president
of Petroindustrial and Mr. Washington Gallegos Orta vice-
president of Petrocomercial.

Petroecuador's president, Carlos Pareja, said it is the first
time in the Company's history that all the vice-presidents of
the three divisions - Petroproduccion, Petroindustrial and
Petrocomercial - are "professionals," which means it is the
right time to face the "critical situation" in which the Company
is currently in.

Petroecuador's production has declined in recent years to about
200,000b/d at present due to lack of investment and delays in
tenders for private participation in state-run oil fields.

Pareja said his goal is to stabilize Petroecuador's production
this year, with the budget already approved by the ministry, and
then start new projects in 2006.

E L   S A L V A D O R

BANCO AMERICANO: Deposit Outflows Pull Down Ratings
Fitch Ratings downgraded its national scale long-term rating on
El Salvadorian bank Banco Americano to B- from B and affirmed
the short-term rating at N-4 with a negative outlook.

According to Business News Americas, Fitch is concerned about
the deterioration on Banco Americano's balance sheet, which
resulted from a significant loss of deposits during the first

Fitch is also concerned about the bank's narrow funding base,
which is concentrated in a small number of large deposits.

According to Fitch, the contraction of the bank's loan book, as
well as an increase in its non-performing loans, have started to
affect profitability.


MILLICOM INTERNATIONAL: May 31 Meeting Fails to Reach Quorum
Millicom International Cellular's Extraordinary General Meeting
of the shareholders, which was held on May 31, 2005 failed to
reach quorum as required by the law of August 10, 1915 on
commercial companies, as amended (the "Law") and the articles of
association of the Company (the "Articles"), according to a
notice sent on June 14, 2005.

A subsequent Extraordinary General Meeting of the shareholders
of the Company will be held on July 20, 2005 at #:00 p.m.
Central European time, at the registered office of the Company,
i.e. at 75, route de Longwy in L-8080 Bertrange (Grand Duchy of
Luxembourg) to consider and vote on the following agenda:

1) To pass a resolution in accordance with the requirements of
article 100 of the law of August 10, 1915 on commercial
companies as amended.

There is no quorum of presence requirement for the Meeting. The
resolution must be adopted by a two-thirds majority of the
shares present or represented at the Meeting.

Participation in the Meeting is reserved to shareholders who
give notice of their intention to attend the Meeting by mail or
return a duly completed proxy form to Ms. Veronique Mathieu of
Millicom International Cellular S.A., telephone: 352 27 759 287,
fax: 352 27 759 359, so that it shall be received no later than
Friday July 15, 2005, 5:00 p.m. Central European time. Proxy
forms are available upon request at Millicom's registered
office, at the above address and contact numbers.

Holders of Swedish Depository Receipts wishing to attend the
meeting or to be represented at the Meeting by proxy have to
request a power of attorney from Fischer Partners Fondkommission
AB, P.O. Box 16027, SE-103-21 Stockholm, Sweden, telephone: + 46
8 463 85 00, and send it duly completed to Millicom, so that it
shall be received no later than Friday July 15, 2005, 5:00 p.m.
Central European time. Holders of Swedish Depository Receipts
having registered their Swedish Depository Receipts in the name
of a nominee must temporarily register the Swedish Depository
Receipts in their own name in the records maintained by VPC AB
in order to exercise their shareholders' rights at the Meeting.
Such registration must be completed no later than Friday July 8,

Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16
cellular operations and licenses in 15 countries. The Group's
cellular operations have a combined population under license of
approximately 332 million people.

CONTACT: Millicom International Cellular S.A.
         Phone: 352 27 759 101
         Fax: 352 27 759 359


EMPRESAS ICA: Vying for Commuter Train Contract
The Ministry of Transport and Communications revealed Monday
that construction company ICA is part of a consortium that is
the only bidder for a contract to build a suburban commuter
train in Mexico City, relates Reuters.

"The economic proposal by ALSTOM-Grupo Hermes-ICA, which has
passed this first step, will be carefully analyzed," the
ministry said.

The train project, which requires an estimated investment of
more than US$500 million, is among the biggest contracts ICA
hopes to win this year

Delays in public works contracts such as the train project has
prompted Scotia Inverlat to cut its end-2005 share price target
on ICA to MXN5.

Shares in ICA fell 1.31% on Monday to MXN4.53.

CONTACT: Empresas ICA Sociedad Controladora S.A. de CV
         Minera No. 145
         Edificio Central
         Mexico, DF 11800
         Phone: 52 55 792 9991
         Fax: 52 5 271 2431


PDVSA: Claims it is World's Hydrocarbon Reserve Leader
Venezuelan President Hugo Chavez insists that his nation has the
largest hydrocarbon reserves in the world and he's out to prove
it, reports Dow Jones Newswires.

Chavez has repeatedly boasted that Venezuela's estimated 78
billion barrels in conventional reserves, coupled with an
estimated 238 billion barrels of tar oil in the nation's so-
called Orinoco Belt, "are the largest petroleum reserves in the

But according to state-run oil company Petroleos de Venezuela
(PDVSA), the country's proven oil reserves have been
underestimated since the reserves in the Orinoco Belt have not
previously been included in studies calculating all the nation's
oil reserves.

The eastern Orinoco heavy crude has been marketed by previous
governments as a substitute boiler fuel (Orimulsion) and that it
was not included in conventional oil reserve calculations since
it was originally designed and patented to compete with coal.
It was for that reason alone that it was not taken up under
established Organization of Petroleum Exporting Countries (OPEC)
production quotas.

Now PDVSA plans to include the Orinoco reserves in Venezuela's
conventional oil reserves, a move that marks a shift in
Venezuela's governmental oil policy.

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:


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

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