TCRLA_Public/050630.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

           Thursday, June 30, 2005, Vol. 6, Issue 128

                            Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: FY 2004 Produced Over $32M in Profits
AGROINDUSTRIAS: Reorganization Proceeds To Bankruptcy
AGUAS ARGENTINAS: July 7 Board Meeting to Define Suez Future
AUTHOGAR S.A.: Files for Bankruptcy
BANCO RIO: $107M Capital Increase Awaits Shareholders' OK

BOSKOOP S.A.: Enters Bankruptcy on Court Orders
CONSTRUCTENO S.A.: Court Declares Company Bankrupt
CEREALTAIM S.A.: Court to Oversee Reorganization
ENAN S.A.: Court Grants Reorganization Motion
FUNDACION COLEGIUM: Seeks Court OK to Reorganize

G.F.W. PERSONAL: Declared Quiebra by Court
NUEVOS TEJIDOS: Liquidates Assets to Pay Debts
PAMPEANO GROUP: Court Appoints Trustee for Reorganization
POHBA S.A.: Liquidation Process Initiated
POLITER S.R.L.: Judge Approves Bankruptcy Motion

SIETE ASES: Reorganization Proceeds To Bankruptcy
TGS: S&P Releases Ratings Analysis
TK INB: Court Rules Liquidation Required
TRANSPORTES: Court Approves Concurso Motion


B E R M U D A

INTELSAT: Atkins Relinquishes CFO Post, Medlin Takes Over


B R A Z I L

AES CORP.: Lowers Costs with $650M Credit Facilities Amendment
AES TIETE: Holders Sell BRL1.06B Shares in Secondary Offering
CEB: Moody's Places Ratings on Review With Uncertain Direction
EMBRATEL PARTICIPACOES: To Hold Extraordinary Meeting July 14
LIGHT SERVICOS: Aneel Authorizes Debt Conversion

NET SERVICOS: Chairman Reveals June 12 Meeting Agenda
SADIA: Fitch Affirms, Withdraws Ratings
VARIG: Court Orders Banks to Abstain From Moving Funds
VARIG: U.S. Bankruptcy Judge Issues Preliminary Injunction


C O L O M B I A

ECOPETROL: To Call for Bids on Partnership Contract By Yearend
* COLOMBIA: World Bank Approves $30M Loan


E C U A D O R

* ECUADOR: Financing Gap May Prove Difficult To Close


J A M A I C A

AIR JAMAICA: Moody's Assigns B1 Rating to $150M Notes


M E X I C O

EMPRESAS ICA: To Seek Shareholders' Approval on Capital Increase
SATMEX: Likely to File for Bankruptcy Under Mexican Laws
TV AZTECA: Shareholders Approve Deportivos Merger


U R U G U A Y

COPACO: Regulator May Favor Plans to Launch Mobile Service


V E N E Z U E L A

ALENTUY: Seniat Orders Closure, Inspecting Company Accounts


     - - - - - - - - - -


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

AEROLINEAS ARGENTINAS: FY 2004 Produced Over $32M in Profits
------------------------------------------------------------
The Meeting of Shareholders of Aerolineas Argentinas held on
June 23, 2005, with the attendance of 98.66% of the
representatives of the outstanding capital, approved the
Company's financial statements as of December 31, 2004.

The favorable vote was cast by all the shareholders present-
98.66% of the Company's stock holding- without any vote against.
Members of the General Inspectorate of Companies attended the
meeting; they did not express any reservations about the
development and outcome of the meeting.

The Fiscal Year produced profits of 94,615,622 pesos -
(USD$32,626,076 at the current exchange rate). It should be
noted that the Fiscal Year ended on December 31, 2004, is the
third consecutive one to produce positive results, thus
exceeding the trend observed in the Balance Sheets from more
than a decade ago.

As a consequence of the analysis of the financial statements,
the Meeting of Shareholders approved the amortization of accrued
losses from previous fiscal years as of the one ended on
December 31, 2002, for a total of 2,423,932,204. - Argentine
pesos. This amortization is one of the most significant recorded
in Argentine companies of different productive sectors in the
last few years, and it shows the effort done by all Aerolineas
Argentinas's shareholders, who are strongly committed to the
future of the Company.

Thus a reorganization of the economic-financial structure of the
company is produced, particularly significant for its medium-
and long-term development and also to access the capital market
through the Buenos Aires Stock Exchange.

Finally, it should be noted that, despite the significant
amortization of losses accrued by former and adverse
administrations of the Company, the Capital Stock of Aerolineas
Argentinas was set in more than 900,000,000. - Argentine pesos,
amount equal to its net worth, thus positioning the company
among one of the most important in Argentina and indicating the
current soundness of the Company.

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


AGROINDUSTRIAS: Reorganization Proceeds To Bankruptcy
-----------------------------------------------------
The reorganization of Agroindustrias del Valle S.A. has
deteriorated into bankruptcy. Argentine news source Infobae
relates that Mendoza's civil and commercial Court No. 1 ruled
that the Company is "Quiebra Decretada". The report adds that
the court assigned Silvia Nelida Nunez as trustee, tasked to
verify creditors' proofs of claim.

The court also ordered the trustee to prepare individual reports
after the verification process is completed. A general report on
the bankruptcy process is expected on Aug. 8, 2005.

CONTACT: Ms. Silvia Nelida Nunez, Trustee
         Mitre 565
         Mendoza


AGUAS ARGENTINAS: July 7 Board Meeting to Define Suez Future
------------------------------------------------------------
French water giant Suez will define its participation in Buenos
Aires water utility Aguas Argentinas on July 7, when its board
of directors is scheduled to meet, says Business News Americas.
Crucial to Suez's decision is the outcome of the ongoing
negotiations between it and Argentina's government. The French
company believes that in order to have an agreement in place by
year-end, there will have to be signs of a workable solution.

Suez has been negotiating with Argentina's government for the
last several months regarding a new contract. Earlier this
month, the government offered two rate increases worth 38% in
2006 and a plan to set up a fund for future investments of some
ARS250 million (US$87mn).

The government ditched Aguas Argentinas' petition for a US$300-
million soft loan to refinance part of its debt, which is
estimated at US$600 million.

Aguas Argentinas is the sole provider of potable water and
sewerage services in the City of Buenos Aires and 17 surrounding
districts.


AUTHOGAR S.A.: Files for Bankruptcy
-----------------------------------
Court No. 5 of Buenos Aires' civil and commercial tribunal is
studying the bankruptcy petition submitted by local company
Authogar S.A., says La Nacion. The report adds that that the
Company filed for bankruptcy, following cessation of debt
payments on Oct. 15, 2003. The city's Clerk No. 10 assists the
court on this case.

CONTACT: Authogar S.A.
         Carlos Pellegrini 27
         Buenos Aires


BANCO RIO: $107M Capital Increase Awaits Shareholders' OK
---------------------------------------------------------
Banco Rio de la Plata, a unit of Spanish banking group Grupo
Santander, plans to embark on a capital increase of up to ARS310
million (US$107 million) as part of its strategy to continue to
fortify its balance sheet. Business News Americas reports that
the bank will ask shareholders to approve the proposal on July
29.

The bank saw its losses widen in the first quarter to ARS307
million compared to a ARS26.7-million loss in 1Q04 due to
liability payments done to solidify operations stemming from
Argentina's economic and financial crisis in 2002.

Earlier this year, Rio paid corporate bond obligations worth
US$458 million ahead of schedule. It also paid its full ARS380-
million debt with the central bank.

CONTACT:  BANCO RIO DE LA PLATA S.A.
          Bartolome Mitre 480
          1036 Buenos Aires, Argentina
          Phone: +54-14-341-1081-1580
          Fax: +54-14-341-1074-1084
          Web site: http://www.bancorio.com.ar


BOSKOOP S.A.: Enters Bankruptcy on Court Orders
-----------------------------------------------
Boskoop S.A. enters bankruptcy protection after Court No. 10 of
Buenos Aires' civil and commercial tribunal, with the assistance
of Clerk No. 20, 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 Carlos Daniel Ayuso as
trustee. Mr. Ayuso will be verifying creditors' proofs of claim
until the end of the verification phase on Sep. 5, 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. The individual reports will be submitted
on Oct. 18, 2005 followed by the general report, which is due on
Nov. 29, 2005.

CONTACT: Mr. Carlos Daniel Ayuso, Trustee
         Tucuman 1455
         Buenos Aires


CONSTRUCTENO S.A.: Court Declares Company Bankrupt
--------------------------------------------------
Court No. 12 of Buenos Aires civil and commercial tribunal
declared local company Constructeno S.A. "Quiebra", relates La
Nacion. The court approved the bankruptcy petition filed by Obra
Social de los Empleados de Comercio y Afines, to whom the
Company owes debts amounting to $7,426.54.

The Company will undergo the bankruptcy process with Vila
Perbeils as trustee. Creditors are required to present proofs of
claim to Ms. Perbeils for verification before Aug. 26, 2005.
Creditors who fail to submit the required documents by the said
date will not qualify for any post-liquidation distributions.

Clerk No. 23 assists the court on the case.

CONTACT: Constructeno S.A.
         Viamonte 657
         Buenos Aires

         Ms. Vila Perbeils, Trustee
         Vidal 2670
         Buenos Aires


CEREALTAIM S.A.: Court to Oversee Reorganization
------------------------------------------------
Cerealtaim S.A. will begin reorganization following the approval
of its petition by Court No. 10 of Buenos Aires' civil and
commercial tribunal. The opening of the reorganization will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

Ricardo Norberto Belli will administer the reorganization
proceedings as the court-appointed trustee. He will verify
creditors' claims until Oct. 3, 2005. The validated claims will
be presented in court as individual reports on Nov. 14, 2005.

Mr. Belli is also required by the court to submit a general
report essentially auditing the Company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. The report will be presented
in court on Dec. 27, 2005.

An Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled on Aug. 21, 2006.

Clerk No. 19 assists the court on this case.

CONTACT: Cerealtaim S.A.
         Carlos Tejedor 546
         Carlos Tejedor

         Mr. Ricardo Norberto Belli, Trustee
         Avda Santa Fe 960
         Buenos Aires


ENAN S.A.: Court Grants Reorganization Motion
---------------------------------------------
Enan S.A. successfully petitioned for reorganization after Court
No. 21 of Buenos Aires' civil and commercial tribunal issued a
resolution opening the Company's insolvency proceedings.

Under insolvency protection, the Company will continue to manage
its assets subject to certain conditions imposed by Argentine
law and the oversight of a court-appointed trustee.

Infobae relates that Ana Maria Calzada Percivale will serve as
trustee during the course of the reorganization. The trustee
will be accepting creditors' proofs of claim for verification
until Sep. 6, 2005.

After verifications, the trustee will prepare the individual
reports and submit it in court on Oct. 19, 2005. She will also
present a general report for court review on Nov. 30, 2005.

The Company will endorse the settlement proposal, drafted from
the submitted claims, for approval by the creditors during the
informative assembly scheduled on May 31, 2006.

CONTACT:  Ms Ana Maria Calzada Percivale, Trustee
          Sarmiento 2437
          Buenos Aires


FUNDACION COLEGIUM: Seeks Court OK to Reorganize
------------------------------------------------
Fundacion Colegium, a company operating in Buenos Aires, has
requested for reorganization after failing to pay its
liabilities since July 8, 2004.

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 Court No. 20. Clerk No. 39 assists on
this case.

CONTACT: Fundacion Colegium
         Lavalle 1464
         Buenos Aires


G.F.W. PERSONAL: Declared Quiebra by Court
------------------------------------------
Buenos Aires' civil and commercial Court No. 1 decreed the
bankruptcy of G.F.W. Personal Eventual S.A., reports Infobae.

The Company will kick off the process with Mr. Luis Pedro
Pereyra as receiver, who will verify creditors' claims until
Aug. 26, 2005. The Company's case will conclude with the
liquidation of its assets to repay creditors. Clerk No. 1
assists the court in handling the proceedings.

CONTACT: Mr. Luis Pedro Pereyra, Trustee
         Roque Saenz Pena 651
         Buenos Aires


NUEVOS TEJIDOS: Liquidates Assets to Pay Debts
----------------------------------------------
Buenos Aires-based Nuevos Tejidos S.A. will begin liquidating
its assets following the pronouncement of the city's civil and
commercial Court No. 21 that the Company is bankrupt, reports
Infobae.

The bankruptcy ruling places the Company under the supervision
of court-appointed trustee, Ana Maria Calzada Percivale. The
trustee will verify creditors' proofs of claim until Aug. 31,
2005. The validated claims will be presented in court as
individual reports on Oct. 13, 2005.

Ms. Percivale will also submit a general report, containing a
summary of the Company's financial status as well as relevant
events pertaining to the bankruptcy, on Nov. 24, 2005.

The bankruptcy process will end with the disposal of the
Company's assets in favor of its creditors. Clerk No. 41 assists
the court on the Company's case.

CONTACT: Nuevos Tejidos S.A.
         Azcuenaga 568
         Buenos Aires

         Ms. Ana Maria Calzada Percivale, Trustee
         Sarmiento 2437
         Buenos Aires


PAMPEANO GROUP: Court Appoints Trustee for Reorganization
---------------------------------------------------------
Pampeano Group S.A., a company operating in Buenos Aires, is
ready to start its reorganization after Court No. 20 appointed
Maria Angelica Adornetto to supervise the proceedings as
trustee. Clerk No. 39 assists the court on this case.

An Infobae report states that Ms. Adornetto will verify
creditors' claims until Sep. 7, 2005. Afterwards, she will
present these claims as individual reports for final review by
the court on Oct. 19, 2005. Ms. Adornetto will also provide the
court with a general report pertaining to the Company's
reorganization on Nov. 30, 2005. The court has scheduled the
informative assembly on May 31, 2006.

CONTACT: Ms. Maria Angelica Adornetto, Trustee
         Suipacha 670
         Buenos Aires


POHBA S.A.: Liquidation Process Initiated
-----------------------------------------
Pohba S.A. was declared "Quiebra" by Court No. 18 of Buenos
Aires' civil and commercial tribunal, reports La Nacion.

As such, Pohba S.A. will now start the process with Mr. Amaldo
Manuel as trustee. Creditors must submit proofs of their claim
to the trustee by Sep. 5, 2005 for authentication. Failure to
comply with this requirement will mean a disqualification from
the payments that will be made after the Company's assets are
liquidated.

The city's Clerk No. 35 assists the court on the case that will
close with the sale of Pohba's assets.

CONTACT: Pohba S.A.
         Gallo 1182
         Buenos Aires

         Mr. Amaldo Manuel, Trustee
         Parana 224
         Buenos Aires


POLITER S.R.L.: Judge Approves Bankruptcy Motion
------------------------------------------------
Politer S.R.L. was declared bankrupt after Court No. 9 of Buenos
Aires' civil and commercial tribunal endorsed the petition of
Union de Obreros y Empleados Plasticos for the Company's
liquidation.

Argentine daily La Nacion reports that Union de Obreros y
Empleados Plasticos has claims totaling $17,874.85 against
Politer S.R.L.

The court assigned Faure Ruben Hugo to supervise the liquidation
process as trustee. Mr. Hugo will validate creditors' proofs of
claim until Sep. 12, 2005.

The city's Clerk No. 18 assists the court in resolving this
case.

CONTACT: Politer S.R.L.
         Superi 3155
         Buenos Aires

         Mr. Faure Ruben Hugo, Trustee
         Avenida Rivadavia 1227
         Buenos Aires


SIETE ASES: Reorganization Proceeds To Bankruptcy
-------------------------------------------------
Siete Ases S.A., a Buenos Aires-based company that was
undergoing reorganization, was declared bankrupt. Argentine news
source Infobae relates that the city's civil and commercial
Court No. 19 ruled that the Company is "Quiebra Decretada".

The report adds that the court assigned Raquel Steinhaus as
receiver, who will verify creditors' proofs of claim until Aug.
18, 2005. The court also ordered the receiver to prepare
individual reports after the verification process is completed,
and have them ready by Sep. 29, 2005. The court also expects a
general report on the bankruptcy process to be filed on Nov. 11,
2005.

CONTACT: Siete Ases S.A.
         Jeronimo Salguero 1575
         Buenos Aires

         Ms. Raquel Steinhaus, Trustee
         Paraguay 577
         Buenos Aires


TGS: S&P Releases Ratings Analysis
----------------------------------
Rationale

The ratings on Transportadora de Gas del Sur S.A. (TGS) reflect
the following risks:

- High regulatory risk in Argentina and future cash flow
generation uncertainties, as regulated tariffs have remained
frozen in Argentine peso terms since January 2002;

- The timing and final outcome of concession contract
renegotiations remain uncertain;

- Still-high leverage after restructuring;

- Partial currency mismatches between revenues (partly in
Argentine pesos) and debt service (in U.S. dollars);

- Exposure to the swings in international prices of liquids
coming from natural gas processing; and

- Limited financial flexibility.

The above-mentioned risks are partially offset by TGS's
unregulated activity having benefited from the devaluation of
the Argentine peso and by a favorable debt maturity schedule
after debt restructuring.

TGS is Argentina's largest natural gas transportation company
and had approximately US$910 million in debt outstanding at
March 31, 2005. The ratings do still reflect some government
intervention that could partially affect TGS's unregulated
business.

Debt relief as a result of the conclusion of the restructuring
is significant. Although there was no haircut on principal,
maturities have been pushed out significantly and are amortizing
in line with cash flow generation capacity. The new debt carries
a 5.3% coupon for the six-year series and 7% for the nine-year
series, with step-up rates reaching 7.5% in the last year in the
case of the six-year series and 10% in the case of the nine-year
series. In addition, the nine-year debt bears additional
interest rates subject to the company's cash generation. If the
current level of capital expenditures is maintained, TGS should
be able to face the first six years of resulting interest and
amortization with its current generation of about $180 million
of EBITDA after capital expenditures. In the longer term, the
company will need to increase revenues or obtain other sources
of refinancing to meet the requirements of a growing debt-
service profile. Nevertheless, assuming a relatively stable
evolution of the U.S. dollar exchange rate, TGS should be able
to reduce some additional debt in the first years through the
cash sweep mechanisms included in the conditions of the
restructuring (in June 2005, TGS paid US$28 million of
additional amortization due to this cash sweep mechanism).

Despite the expected more favorable maturity schedule, as long
as TGS does not increase revenues and cash generation, its
repayment capacity could be affected, particularly in a
potential devaluation scenario of the Argentine peso and a high
inflation scenario. Standard & Poor's Ratings Services considers
the company's future cash flow generation to be somewhat unclear
as long as the renegotiation of the concession contracts is not
resolved and until a new tariff adjustment mechanism has been
agreed on to reestablish the company's financial and economic
balance. We also consider potential mandated increases in
capital expenditures to be another form of regulatory risk.
Given its current revenue base and capital structure, TGS's
future financial performance will also depend on the performance
of the international prices of liquids coming from natural gas
processing.

About 50% of TGS's revenues (50.9% for fiscal 2004) are
unregulated and derived from the sale of liquids coming from
natural gas processing at the Cerri complex near the city of
Bahˇa Blanca, in the province of Buenos Aires. Although this
U.S. dollar-linked revenue stream became more significant after
the devaluation of the peso, TGS's financial profile severely
weakened as a result of the government's emergency measures in
early 2002.

TGS's capital structure significantly improved, due to a
reduction of the debt burden (considering the cash payment made
as part of the restructuring, equal to 11% of the principal
amount) and the positive results reported in the past two years.
Consequently, total debt to total capitalization decreased to
53.4% as of March 31, 2005, from 61.2% in year-end 2003.
Continuing debt reduction is expected, given the amortization
profile of the restructured debt and the limitations to incur
additional indebtedness. Nevertheless, the foreign exchange rate
will remain critical for TGS because its entire debt is still
dollar-denominated. The company will not face interest rate risk
because all the new debt after restructuring is at fixed step-up
rates.

As Argentina's largest natural gas transportation company, TGS
delivers approximately 61% of the country's total gas
consumption. It has a 35-year license to operate Argentina's
southern gas transportation system (regulated activity). TGS
also operates a natural gas separation facility near Bahˇa
Blanca. The company separates natural gas into ethane, butane,
propane, and natural gasoline, which are sold to distributors,
refineries, and other third parties (unregulated activity).

Liquidity

TGS's liquidity position is adequate, although limited, for the
rating category, having significantly improved after the
rescheduling of its debt maturities. As of March 31, 2005, TGS
had about $115 million in cash and short-term investments,
abundantly exceeding its short-term debt. In addition, the new
obligations issued contain certain cash sweep mechanisms and
various restrictive covenants, including limitations to issue
additional debt, maximum capital expenditures and investments,
and restrictions on dividend payments, among others.
Nevertheless, these conditions should not jeopardize the
company's current liquidity position. In the medium term, TGS's
deleveraging should help improve financial flexibility.

Outlook

The stable outlook reflects expectations of strengthening
repayment capacity after the improvement in TGS's debt maturity
schedule, a certain stability in the exchange rate, and a
certain degree of government intervention in the company's
operations. The outlook also reflects our opinion that the debt
restructuring concluded in December 2004 provides TGS with an
adequate window for renegotiating the concession contract
without incurring significant financial pressures. In this
context, the ratings on TGS could benefit from future perceived
important improvements in the country's institutional
environment or a renegotiation of the concession contract
favorable for the company's cash flow generation. Nevertheless,
the ratings could come under pressure if the renegotiation of
the concession contract negatively affects TGS's business or
financial profiles or if further government intervention (i.e.,
as a form of mandatory investments, additional export duties, or
significant natural gas restrictions to be processed at Cerri)
significantly affects the company's cash generation.

Primary Credit Analyst: Luciano Gremone, Buenos Aires (54) 11-
4891-2143; luciano_gremone@standardandpoors.com

Secondary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114-
891-2125; pablo_lutereau@standardandpoors.com


TK INB: Court Rules Liquidation Required
----------------------------------------
Buenos Aires' civil and commercial Court No. 22 ordered the
liquidation of Tk Inb 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 Maria Elena Cappelletti, the court-
appointed trustee.

Ms. Cappelletti will verify creditors' proofs of claim until
Oct. 31, 2005. The verified claims will serve as basis for the
individual reports to be submitted in court on Dec. 13, 2005.
The submission of the general report follows on Feb. 23, 2006.

Clerk No. 44 assists the court on this case, which will end with
the disposal of the Company's assets in favor of its creditors.

CONTACT: Ms. Maria Elena Cappelletti, Trustee
         Pedro Goyena 1674
         Buenos Aires


TRANSPORTES: Court Approves Concurso Motion
-------------------------------------------
Court No. 22 of Buenos Aires' civil and commercial tribunal
approved a petition for reorganization filed by Transportes del
Tejar S.A., according to a report from Argentine daily La
Nacion.

Estudio Auzmendi-Palma was appointed as trustee. The trustee
will verify claims from the Company's creditors. After
verification period, the trustee will submit the individual and
general reports to court. Dates for submission of these reports
as well as the deadline for the verification are yet to be
disclosed.

A settlement plan will be proposed by the Company for its
creditors during the informative assembly, which will be held
after the submission of the reports. Creditors will vote to
ratify the completed settlement plan during the said assembly.

The city's Clerk No. 43 assists the court on the case.

CONTACT: Transportes del Tejar S.A.
         Doctor Enrique Finochietto 1305
         Buenos Aires

         Estudio Auzmendi-Palma, Trustee
         Pte. Jose Evaristo Uriburu 1632
         Buenos Aires



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B E R M U D A
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INTELSAT: Atkins Relinquishes CFO Post, Medlin Takes Over
---------------------------------------------------------
Intelsat, Ltd., a global satellite communications leader
providing services in over 200 countries and territories,
reported on Tuesday that William Atkins has resigned his
position as Chief Financial Officer to pursue other interests.
The company has named J. Robert Medlin as acting Chief Financial
Officer. The change is effective June 30, 2005. Intelsat has
commenced a search process for a permanent successor.

Mr. Medlin is a senior managing director of FTI Palladium
Partners, a division of FTI Consulting, Inc. Intelsat has
engaged FTI to provide interim management services, including
providing the services of Mr. Medlin and providing assistance in
the search for a permanent chief financial officer. Mr. Medlin,
a CPA, brings to Intelsat 30 years of corporate finance
experience with particular expertise in tax, audit and corporate
finance work.

"We are looking forward to benefiting from the deep finance
expertise that Bob and the FTI organization offer as we
transition our financial leadership," said David McGlade,
Intelsat's Chief Executive Officer. "William made key
contributions at a pivotal time for Intelsat, most notably in
preparing the company for the $5.1 billion private equity
acquisition of Intelsat that, with associated financings, closed
earlier this year. We wish him the best in his future endeavors
and thank him for his service to Intelsat."

Intelsat is a global communications provider offering flexible
and secure services to customers in over 220 countries and
territories. Intelsat has maintained a leadership position for
over 40 years by distributing video, voice, and data for
television and content providers, government and military
entities, major corporations, telecommunications carriers, and
Internet service providers. Intelsat's reach, power and
expanding solutions portfolio deliver information reliably and
quickly to every corner of the globe.

CONTACT: Intelsat
         Media Relations
         E-mail: media.relations@intelsat.com
         Phone: 1 202-944-7500



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

AES CORP.: Lowers Costs with $650M Credit Facilities Amendment
--------------------------------------------------------------
The AES Corporation (NYSE:AES) announced Tuesday it has amended
its $650 million credit facilities to significantly reduce
borrowing costs. The interest rate on the $450 million revolving
credit facility has been reduced to the London Interbank Offered
Rate (LIBOR) plus 175 basis points.

Previously, the rate was LIBOR plus 250 basis points. In
addition, the revolving credit facility maturity date was
extended from 2007 to 2010. The interest rate on the term loan
facility also was reduced to LIBOR plus 175, from LIBOR plus
225, while its maturity in 2011 remains unchanged.

At May 31, 2005, there were no borrowings under the $450 million
revolving credit facility, but approximately $179 million was
utilized for letters of credit supporting general business
purposes, while the $200 million term loan was fully drawn.

AES retains the right to prepay without penalty under these
facilities at any time.

"This amendment demonstrates that the financial markets continue
to recognize AES's improving credit quality. It reflects the
benefits of our deleveraging strategy and our improved financial
performance," said AES Executive Vice President and Chief
Financial Officer, Barry Sharp.

AES is a leading global power company, with 2004 revenues of
$9.5 billion. AES operates in 27 countries, generating 44,000
megawatts of electricity through 124 power facilities and
delivers electricity through 15 distribution companies.

CONTACT: The AES Corporation
         Media:
         Robin Pence
         Phone: 703-682-6552
         E-mail: mediaaes.com

         Investor:
         Scott Cunningham
         Phone: 703-682-6336
         URL: www.aes.com


AES TIETE: Holders Sell BRL1.06B Shares in Secondary Offering
-------------------------------------------------------------
Three shareholders of electric power utility AES Tiete sold a
total of BRL1.06 billion of shares during a secondary offering,
about BRL138 million higher than the initial figure of BRL921.6
million carried out June 15.

According to Dow Jones Newswires, Sao Paulo's government-owned
bank Nossa Caixa and two local units of Spain's Banco Santander
Central Hispano (STD) sold the shares through the Sao Paulo
Stock Exchange (Bovespa).

Altogether, the banks sold 20.7 million preferred shares priced
at BRL40.00 per lot of 1,000 shares, and 6.3 million voting
shares priced at BRL36.50 per lot of 1,000 shares. The total
shares sold represent 28.38% of AES Tiete's total capital.

About 80% of the shares on offer were purchased by overseas
institutional investors, while the remaining 20% was split
between investors including individuals, investment funds and
pension funds.

The offer was coordinated by Credit Suisse First Boston and
Banco Santander Brasil. Within the offer, CSFB sold 2.7 million
shares under a green shoe option to meet the exceptional demand.

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

AES Tiete is controlled by the Brasiliana holding company, which
is a joint venture between U.S.-based AES Corp. (AES) and
Brazil's National Development Bank, or BNDES.


CEB: Moody's Places Ratings on Review With Uncertain Direction
--------------------------------------------------------------
Approximately BRL 43 million of debt affected

Moody's America Latina placed Tuesday under review with
uncertain direction the Ba3 global local currency rating and
Baa1.br national scale rating of Companhia Energetica de
Brasilia's (CEB) debentures due in 2006. The rating action
reflects CEB's overall deteriorated credit metrics due to slower
than expected recovery of energy sales following the rationing
period, the company's relatively high delinquency and energy
loss rates, as well as insufficient tariffs adjustments. The
review of CEB's ratings will incorporate the ongoing joint-
default analysis of Government-Related-Issuers as communicated
in our April 28, 2005 press release.

CEB is the monopoly electric distribution company for Brazil's
Federal District, which includes Brazil's capital city of
Brasilia. The Federal District owns 89.3% of CEB's voting
shares.


EMBRATEL PARTICIPACOES: To Hold Extraordinary Meeting July 14
-------------------------------------------------------------
Vice Chairman of the Board of Directors of Embratel
Participacoes S.A. Jose Formoso Martinez released a notice on
Tuesday to inform its shareholders that an Extraordinary General
Meeting will be held at the Company's headquarters, located at
Rua Regente Feijo, n.§ 166, room 1687-B, Downtown, City and
State of Rio de Janeiro, on July 14th, 2005, at 3.00pm, to
deliberate on the following agenda:

i) deliberate on the proposal of reform the Company Corporate
By-laws with the following purposes:

I) provide new wording to article five of the Corporate By-laws
in order to reflect the capital increase ratified by the Board
of Directors on May 23rd., 2005 as follows: "Art. 5 - The
subscribed corporate capital, fully paid in, is R$
4.096.713.387,00 (four billion, ninety-six million, seven
hundred and thirteen thousand, three hundred and eighty-seven
reais), represented by 758,306,004,336 (seven hundred and fifty-
eight billion, three hundred and six million, four thousand,
three hundred and thirty-six) shares, 282,027,681,973 (two
hundred and eighty-two billion, twenty-seven million, six
hundred and eighty-one thousand, nine hundred and seventy-three)
being nominative common shares and 476,278,322,363 (four hundred
and seventy-six billion, two hundred and seventy-eight million,
three hundred and twenty-two thousand, three hundred and sixty-
three) being nominative preferred shares, all with no nominal
value.";

II) in order that the Fiscal Council act as Company Audit
Committee to the purposes disposed at Sarbanes-Oxley Act of
2002: modify the item XV of article 17, inclusion of the sole
paragraph of article 30 and article 31, and respective items;
modify the third paragraph ( 3) of article 31; modify the
caput, paragraphs first and second ( 1 and  2) of article 32;

III) in order to assure the Company to hire by contract
consultants that may be required by the Fiscal Council, to
perform their duties, as well as to approve specific budget
destined to this purpose: inclusion of item II of article 17;
inclusion of item (v) in the first paragraph ( 1) of article
29; and inclusion of article 43; and (IV) as a consequence of
the changes proposed, rearrange the articles, respective items
and alter the internal references.

ii) approve the consolidation of Company Corporate By-laws;

iii) approve the Fiscal Council Internal Ruling ; and

iv) readjust the remuneration of the members of the Fiscal
Council approved at Annual Ordinary General Meeting held on
April 29th, 2005, fixing the monthly individual remuneration in
the amount of eight thousand reais (R$ 8.000,00).

General Instructions:

A) Powers of Attorney should be filed at the Company
headquarters within forty-eight hours before the Shareholders
Meeting.

B) Shareholders participating in Fungible Custody of Nominative
Shares of the Stock Exchanges willing to take part at this
Meeting shall present a statement, informing their respective
shareholding, issued two (02) days before the Meeting thereof.

CONTACT: EMT - Embratel Participacoes S.A.
               Rua Regenta Feijo
               166 Sala 1687-B Centro
               Rio de Janeiro, 20060-060
               Brazil
               Phone: 5521-519-6474
               URL: http://www.embratel.net.br


LIGHT SERVICOS: Aneel Authorizes Debt Conversion
------------------------------------------------
Electric power utility Light Servicos de Electricidad has
secured approval from power regulator Aneel to convert into
shares the US$400 million in debt it owes its parent company
Electricite de France (EDF).

Business News Americas suggests that the approval paves the way
for Light to complete a broad financial restructuring of US$760
million in debt with 12 creditor banks.

The preliminary agreement with creditors needs to be ratified by
June 30 to allow the conclusion of the other part of the
capitalization program, which involves a BRL767-million loan
from the national development bank BNDES.

According to Business News Americas, Light agreed to carry out a
private issue of local convertible debt to BNDES in exchange for
the loan.

CONTACT:  LIGHT SERVICOS DE ELETRICIDADE S.A.
          Avenida Marechal Floriano, 168
          20080-002 Rio de Janeiro, Brazil
          Phone: +55-21-2211-2794
          Fax:   +55-21-2211-2993
          Home Page: http://www.lightrio.com.br
          Contact:
          Bo Gosta Kallstrand, Chairman
          Michel Gaillard, President and CEO
          Joel Nicolas, Executive Director, Operation
          Paulo Roberto Ribeiro Pinto, Executive Director,
                                 Investor Relations and CFO


NET SERVICOS: Chairman Reveals June 12 Meeting Agenda
-----------------------------------------------------
Net Servicos de Comunicacao Chairman of the Board of Directors
Roberto Irineu Marinho released a notice on June 24, 2005
informing that an Extraordinary Shareholders' Meeting was held
on June 12, 2005 at 11:00 p.m., at the Company's headquarters
located at Rua Verbo Divino, in the city and state of Sao Paolo.
The notice revealed the following agenda:

a) Reorganization of CHAPTER V - FISCAL COUNCIL - of the
Company's bylaws to make this council a permanent one and to
adjust under the scope of the Sarbanes-Oxley Act.

b) Placement of the Fiscal Council, sitting and alternate
member's election, and definition of their fixed remuneration.

c) Change the article 5 of the Company's bylaws to reflect the
Company's capital increase confirmed at the Board of Directors'
Meeting held on May 10, 2005, from R$2,748,650,800.00 to
R$3,387,408,498.71, arising from a private underwriting, within
the authorized capital, corresponding to 745,147,153 common
shares and 1,079,874,843 preferred shares, all registered, book-
entry and nonpar shares, at a price of R$0.35 per common and
preferred shares.

The minute of the Company's bylaws to be deliberated on the
Extraordinary General Meeting now summoned is available to the
shareholders as from this date at the Company's headquarters,
and was submitted to Bovespa - Sao Paulo Stock Exchange, under
the scope of article 135, paragraph 3§ and article 124,
paragraph 6§ of the Law 6.404/76, and amendments.

The shareholders participating in the Fungible Custody of
Registered Shares of the Stock Exchanges intending to
participate in this Meeting shall submit a statement issued
forty-eight (48) hours before the Meeting, containing their
respective shareholding provided by the custody agency.

CONTACT: Net Servicos de Comunicacao
         URL: http://nettv.globo.com/NETServ/br/home/


SADIA: Fitch Affirms, Withdraws Ratings
---------------------------------------
Fitch Ratings has affirmed and withdrawn the ratings of Sadia
S.A., including its 'BB-' international scale foreign currency
rating, 'BB' international local currency rating, 'BB' IFC trust
certificates rating, and 'A(bra)' national scale rating. Fitch
has withdrawn the ratings consistent with its policies. Fitch
will no longer provide ratings or analytical coverage to this
issuer.

Sadia is the largest vertically integrated food company in
Brazil. The company is the leading producer and processor of
poultry (chicken and turkey), pork and processed-packaged food
products (mainly hams, hot dogs, sausages, frozen dishes, and
margarine) in Brazil, and the country's largest poultry
exporter. Sadia operates 11 plants and distributes its product
line of more than 600 items through distribution centers located
throughout the country. The company exports to more than 92
countries.

CONTACT: Giovanna Caccialanza, CFA, +1-212-908-0898, New York
         Gisele Paolino +55 21 4503-2600, Rio de Janeiro, Brazil

MEDIA RELATIONS: Kenneth Reed +1-212-908-0540, New York


VARIG: Court Orders Banks to Abstain From Moving Funds
------------------------------------------------------
Varig, S.A., Linhas Aereas S.A. and Nordeste Linhas Aereas S.A.
believe that due to their reorganization proceedings, it is
necessary to prevent the banks and financial institutions, where
the Debtors keep their accounts receivable, from transferring
any money they owe to the creditors that are favored by the
applicable payment mechanisms.  The Debtors relate that certain
creditors will be benefited, by receiving their credits in
advance, to the detriment of the other creditors and the Debtors
themselves.

The Debtors state that Law No. 11.101/05 classifies as a crime
the disposal or burdening of part of the assets of companies
undergoing judicial recovery to favor certain creditors.

At the Debtors' request, the Brazilian Court directs 14 banks to
abstain from any acts aimed at the transfer or blockage of
amounts deposited in current accounts or any other forms of
financial application from VARIG, S.A., Rio Sul Linhas Aerea
S.A., and Nordeste Linhas Aereas S.A. to their creditors, and
that the amounts be used expressly for and by order of the
Debtors.

The Banks are:

   * Bank Boston - Banco Multiplo S.A.,

   * GE Varig Engine Services S.A.,

   * Banco Do Estado Do Rio Grande Do Sul S/A - Banrisul,

   * Empresa Brasileira De Infra-Estrutura Aeroportuaria -
     Infraero,

   * Banco Industrial e Comercial S.A.,

   * IATA/BSP Brasil,

   * Instituto Aerus De Seguridade Social,

   * Banco do Brasil S.A.,

   * Uniao de Bancos Brasileiro S.A. - Unibanco,

   * Pentagono S.A. Distribuidora de Titulos e Valores
     Mobiliarios,

   * Petrobras Distribuidora S.A.,

   * IBM Brasil - Industria de Maquinas e Servicos Ltda.,

   * Pavarini - Distribuidora de Titulos e Mobiliarios, and

   * Operadoras de Cartoes de Credito American Express, Rede
     Card e Visa do Brasil.

Vicente Cervo, the foreign representative appointed in Varig,
S.A., and its debtor-affiliates' Brazilian bankruptcy
proceedings, filed a Sec. 304 petition on June 17, 2005 (Bankr.
S.D.N.Y. Case Nos. 05-14400 and 05-14402).  Rick B. Antonoff,
Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr.
Cervo in the United States and Sergio Bermudes, Esq., in
Brazil.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (Varig Bankruptcy News, Issue No. 03; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG: U.S. Bankruptcy Judge Issues Preliminary Injunction
----------------------------------------------------------
A U.S. federal bankruptcy judge issued Monday a preliminary
injunction preventing creditors of struggling Brazilian airline
Varig from seizing aircraft, says Dow Jones Newswires.

In his ruling, Judge Robert Drain said Varig had met the
conditions to qualify for a "breathing spell" and that the
injunction would "best assure the economical and expeditious
administration" of Varig's bankruptcy proceedings in Brazil.

Judge Drain said he would hold a hearing Sept. 12 to review the
preliminary injunction, which strengthened an existing temporary
restraining order issued June 17. If Varig fails to make
payments on leased aircraft, or doesn't maintain and insure
them, Judge Drain said the leasing company in question can seek
special permission from the court before that date to take
further action.

Varig filed for bankruptcy in a Rio de Janeiro court on June 17
to prevent the aircraft leasing unit of American International
Group Inc. (AIG), the ILFC, from seizing 11 Varig jets whose
lease payments weren't up to date. Varig followed that up with a
request for a temporary restraining order in the U.S. to prevent
its aircraft from being seized overseas.

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
===============

ECOPETROL: To Call for Bids on Partnership Contract By Yearend
--------------------------------------------------------------
State oil company Empresa Colombiana de Petroleos (Ecopetrol)
will open a bidding process by the end of the year to choose a
partner in a project to expand its Cartagena refinery, according
to Mauricio Salgar, vice president of Ecopetrol's operations.

Ecopetrol aims to up Cartagena refinery's capacity from 75,000
barrels a day (b/d) to 140,000b/d in order for Colombia to
produce enough diesel to meet its domestic needs.

According to Dow Jones Newswires, Colombia is currently
importing 5,200 b/d of diesel from Venezuela.

The expansion project is worth US$800 million, of which at least
US$500 million should come from the international partner. The
government hopes to have the refinery ready by the end of 2007.

Ecopetrol is engaged in the exploration, production,
transportation, refining and marketing of its crude and
petroleum derivatives.


* COLOMBIA: World Bank Approves $30M Loan
-----------------------------------------
The World Bank's Board of Directors approved on Tuesday a $30
million loan to Colombia in order to increase agricultural
competitiveness and improve the accessibility of export-
potential products to international markets.

"This program will support Colombia's efforts of achieving rapid
and sustainable growth for all citizens by improving the
provision of scientific and technological goods and services to
rural producers," said Isabel Guerrero, World Bank Country
Director for Colombia and Mexico. "The project will contribute
to increasing the competitiveness of the agricultural sector in
the context of a more open economy."

The Agricultural Transition Project will focus on strengthening
the Agricultural Science and Technology System to improve
competitiveness, as well as improving access to markets by
enhancing the National Sanitary and Phytosanitary Measures
System.

Specifically, the program will support the following activities:

Support the provision of technology and innovation through the
preparation of participatory and demand driven research and
development (R&D) agendas around certain production chains, as
well as the implementation and co-financing of these agendas
through a Competitive Fund.

Strengthen the National Sanitary and Phytosanitary System (SPS)
in order to enable it to respond to the sanitary standards of
international markets, which will enhance the admissibility of
agricultural products to these markets. This will be done by
financing the training of professionals, strengthening capacity,
and designing and implementing national SPS information network,
among others.

"Structural and sanitary barriers in world markets for poultry,
beef and milk, currently inhibit the possibilities of expansion
of Colombia's exports of these products," said Matthew A.
McMahon, World Bank task manager for the project. "The project
will help agricultural producers to become more competitive and
take advantage of their potential for fulfilling the global
demand for quality, environment-friendly and safe food
products."

"Aimed at fostering competitiveness in the rural sector as the
country faces the challenges and opportunities of the Free Trade
Agreement, this project will significantly contribute to promote
sustainable development in rural areas of Colombia most affected
by poverty and violence," said Alberto Chueca Mora, World Bank
Country Manager for Colombia.

The $30 million, fixed spread loan is repayable in 14 years,
including a grace period of eight years.

CONTACT: The World Bank
         Gabriela Aguilar
         Phone:(5255) 5480-4200
         E-mail: Gaguilar2@worldbank.org

         Alejandra Viveros
         Phone:(202) 473-4306
         E-mail: Aviveros@worldbank.org

         URL: http://www.worldbank.org/



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

* ECUADOR: Financing Gap May Prove Difficult To Close
-----------------------------------------------------
Standard & Poor's Ratings Services 'CCC+' long-term sovereign
credit rating on the Republic of Ecuador reflects various
fiscal, economic and political risk. Political and institutional
weaknesses underpin Ecuador's rating. Uncertainty stemming from
unforeseen political and fiscal developments cannot be
discarded. The proximate cause for the June 20, 2005, downgrade
of Ecuador's rating from 'B-', CreditWatch with negative
implications, however, is uncertainty about the ability of the
government to cover its financing needs over the coming year
given these weaknesses.

Despite high oil prices, Ecuador's financing options have become
more precarious amid inconsistent policy signals by President
Alfredo Palacio's government and changes to fiscal legislation.
Coupled with high expenditure rigidity this, in turn, raises the
risk associated with Ecuador's ability to cover its financing
needs-a risk consistent with a rating in the 'CCC' category.

Fiscal Risk

Fiscal risk tends to constrain most sovereigns rated in the
speculative-grade category, particularly those in the 'B' or
'CCC' rating categories. Weak institutions and a history of
unpredictable policy, including default on its debt obligations,
have resulted in high credit risk in Ecuador. Consequently,
Ecuador's private sector has demonstrated little interest in
holding government paper since the forced restructuring of
locally issued debt during the 1999-2000 economic crisis.

Only after almost two years in office and amid high oil prices
was former President Lucio Gutierrez's government able to entice
the private sector, and essentially foreign investors, to buy
government paper. The Gutierrez Administration slowly developed
a better-than-expected track record of resisting all pressures
for increased spending. Like previous governments, however, it
was unable to advance structural reform to reduce Ecuador's
fiscal rigidities and procyclical dependency on oil revenue. In
addition, it presided over a doubling of the central government
payroll, further exacerbating fiscal rigidities.

Against the backdrop of underlying fiscal fragilities and a
short history of macroeconomic stability since 2000, the mixed
policy signals by the Palacio government have undermined nascent
confidence in policy predictability in Ecuador. Distressing
policy developments and/or statements include:

- Weakening of the fiscal responsibility law (FRL), with a
potentially more expansionary fiscal policy,

- Changes to the oil stabilization fund (FEIREP), with less
commitment to debt reduction,

- Using FEIREP resources to extend credit via poorly managed
public sector financial institutions with already large
nonperforming loans,

- The prospect that reserves of the social security institute
(IESS) might be used for investment in the inefficient, poorly
managed state owned oil company Petroecuador,

- Contradictory statements on the importance of Ecuador's
relationship with the multilateral agencies, and

- Questioning of the dollarization framework.

Despite initial rhetoric to the contrary, Ecuador's tight
financing constraints for 2005 have shaped a more realistic
assessment of spending plans for the year. Indeed, updated
fiscal projections by the Finance Ministry outlined with
proposed changes to FRL and FEIREP suggest spending moderation
for 2005. However, the loosening of spending limits implied by
changes in FRL generates questions about the planned pace of
spending in 2006, although this, too, is likely to be
constrained by the availability of financing.

Implementation of "fiscal responsibility" and the establishment
of an effective oil "stabilization fund" are crucial for an
economy like Ecuador's. The fact that Ecuador is dollarized
implies that policy flexibility rests completely on fiscal
policy. This, in turn, requires a fiscal stance that is "extra"
prudent: the running of fiscal surpluses, limited budgetary
rigidities, and maintaining a low level of debt. Given its
dependency on oil, Ecuador's budget is also more susceptible to
revenue volatility. Including revenue that has accrued to FEIREP
(and, in essence, has been used as budgetary financing), 35% of
central government revenue will derive from oil in 2004-2005.
Reversing a history of a "boom and bust" associated with oil
fortunes entails smoothing and limiting expenditure over the
commodity price cycle via the effective use of a stabilization
fund.

The impending changes to Ecuador's FRL and FEIREP (as proposed
by the government and passed by Congress) were not, in and of
themselves, the determining rating factor for Standard & Poor's
lowering Ecuador's rating to 'CCC+' from 'B-'. Both 'B-' and
'CCC+' ratings incorporate significant fiscal weakness.
Furthermore, despite having been enacted into law in 2002,
neither FRL nor FEIREP have been effectively implemented.
However, the impending changes to these laws, coupled with
conflicting policy signals from the government, undermine
confidence in Ecuador's nascent fiscal prudence. This, in turn,
has materially increased the likelihood of curtailed access to
official and private sector financing over the coming year. This
more limited access to financing has raised the risk surrounding
the "ability" of Ecuador to service its debt in a timely manner.
A track record of default on its financial obligations by both
the public and private sectors also points to a weakness in the
payment culture and questions of "willingness" to pay in
Ecuador.

The Financing Gap

Standard & Poor's estimates a financing gap on the order of
US$400 million for Ecuador's central government in 2005. The
projected performance of the central government balance differs
slightly from official forecasts. However, the projected
financing gap arises due to concern about the prospects for, and
magnitude of, disbursements from multilateral agencies and the
willingness of the private sector to roll over locally issued
debt.

Standard & Poor's estimates Ecuador's financing needs at about
US$2,850 million for 2005. This includes a central government
deficit of almost US$550 million (assuming FEIREP funds are
accounted for below the line); locally issued short-term debt
and amortization of US$1,350 million; and external amortizations
of US$950 million. [Note: accounting for US$490 in the FEIREP
funding "above the line" as does the Ministry of Finance,
Standard & Poor's estimate of Ecuador's deficit is US$58
million, versus the official forecast of US$22 million.]

Funds available to cover these financing needs include use of
FEIREP funds, project-related and exceptional official lending,
and placements of local debt. Standard & Poor's is less
optimistic on the prospects for disbursement of exceptional
funds by multilaterals than is the government, given setbacks to
the still-young fiscal institutions and uncertainty about policy
under the Palacio Administration. The government is looking for
US$350 million in exceptional financing, while Standard & Poor's
assumes US$200 million will be available. Further complicating
the financing picture for 2005 is the fact that clarification on
the amount of exceptional financing is unlikely to be
forthcoming from the multilaterals until the third quarter. The
time frame depends first on the International Monetary Fund's
evaluation of the final, legislated changes to FRL and FEIREP
and the government's budget plan for 2006, followed by funding
decisions within the various multilaterals themselves.

Of the US$1,350 million in domestically issued debt amortizing
in 2005, Standard & Poor's assumes US$1,170 million is rolled
over. This US$1,170 million figure is based upon estimated
rollover or repayment of almost US$700 million in government
paper that came due during January 2005-May 2005 and assumptions
on the ability to refinance payments due during June 2005-
December 2005, as outlined below.

Since the Palacio government came to office in April 2005,
anecdotal evidence suggests there has been no rollover of paper
with the private sector. Lingering uncertainty about access to
official financing and mixed policy signals are expected to
limit the government's ability to rollover domestic
amortizations. It is important to underscore at the onset that
estimates of the share of paper held by the private sector vary,
but Standard & Poor's believes that 50% of short-term locally
issued paper (CETES) is held by the private sector, with a
significant portion held by foreign investors. In projecting
CETES rollovers during June 2005-December 2005, however,
Standard & Poor's uses a slightly more generous assumption that
US$200 million (or 40%) of the almost US$500 million in CETES
due during this time period is held by the private sector, and
not refinanced.

Standard & Poor's projects that US$300 million of CETES will be
rolled over during June 2005-December 2005, and that almost
US$200 million in other medium-term government paper coming due
during this time frame will also be refinanced. These CETES and
bonds are believed to be held by state-owned entities; it should
be easier for the government to place paper with public sector
entities. That said, assuming 100% rollover of debt with state-
owned entities such as IESS, local governments, universities,
etc., is not without risk. Public pressure has led Congress to
discuss a bill that might return 50% to 100% of monies held in
the IESS reserve fund (around US$700 million) to workers. This
could reduce the IESS funds available for investment in
government paper.

Closing The Gap

While Standard & Poor's estimates a US$400 million financing gap
for 2005 and highlights the risk of Ecuador satisfying its
financing needs, various alternatives are possible to close the
gap this year. The multilaterals could be more forthcoming with
funds, should prudent policy signals by the government become
consistent. Improved policy signals could also increase private
sector willingness to refinance the government of Ecuador's
debt. With record-high world oil prices, additional oil revenue
to FEIREP could provide additional relief. Finally, the drawing-
upon of additional funds from IESS or somehow accessing the
operating surpluses at other state-owned entities cannot be
ruled out; Standard & Poor's expects that such funding would
likely be of limited duration and magnitude.

Alternatively, the government could generate a better fiscal
outturn and lower its overall financing needs. Tax revenue has
been stronger than expected thus far this year, but has also
been offset by weak revenue associated with domestic sales of
petroleum products. Expenditure rigidity (in terms of a large
share of nondiscretionary/earmarked spending) limits scope for a
meaningful reduction in expenditure. While spending cuts do not
seem in line with the government's rhetoric, the government
could decide to execute less capital expenditure as has been
done in the past.

Ecuador's financing constraints have also been met by running
arrears. During 2002, the government accumulated some US$750
million in arrears to public-sector workers, pensioners,
suppliers, and official creditors. Arrears are estimated to be
around US$250-US$300 million at present. The Palacio government,
however, has suggested that any arrears would be directed to the
financial sector, and running arrears with workers or pensioners
is bound to be problematic given the social environment.

With significant domestic debt maturities in October 2005
(US$260 million) and January 2006 (US$200 million), liquidity
pressures are likely to increase toward the end of 2005. The
financing picture for 2006 is also likely to be tight. The
Global 2012s begin to amortize (US$125 million per year) next
year. With presidential elections scheduled for October 2006,
questions about fiscal prudence during an election year likely
will increase, exacerbated by the weakening of spending limits
as per pending changes to FRL. Hence, Standard & Poor's also
expects limited access to official and private sector financing
in 2006.

Political Risk Should Not Be Underestimated

While the volatile social situation that ousted Mr. Gutierrez
has seemingly stabilized, Standard & Poor's maintains that
Ecuador has one of the weakest and most unpredictable political
and institutional environments among its 107 rated sovereigns.
Weakness in Ecuador's political structure and uncertain
political dynamics are an ever-present risk for the sovereign.
Problems of governability, confrontation with Congress, or
renewed outcry by the public -at large cannot be discarded.
President Palacio lacks a congressional support base. The
longevity of support from the Partido Social Cristiano (PSC) and
Izquierda Democratica (ID) is likely to be driven by
opportunistic concerns and vested interests and, hence, be
somewhat unpredictable. The return of Mr. Gutierrez to Ecuador
could also prove unsettling to the current political balance.

Public pressure for early presidential and congressional
elections (ahead of schedule for October 2006) and changes in
composition of the major courts seem to have been mostly
assuaged, for now. The government has promised to lead and
engage discussion with civil society to evaluate possible
changes to the political system. To that end, a national,
popular consultation is scheduled for Dec. 11, 2005. The content
of the referendum/consultation, however, has yet to be defined.
Given widespread dissatisfaction with the political class, an
unforeseen trigger could again ignite popular protests and prove
destabilizing to economic policy.

Primary Credit Analyst: Lisa M Schineller, New York (1) 212-438-
7352; lisa_schineller@standardandpoors.com



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

AIR JAMAICA: Moody's Assigns B1 Rating to $150M Notes
-----------------------------------------------------
Moody's Investors Service assigned a first-time rating of B1 to
Air Jamaica Limited's new $150 million of guaranteed senior
unsecured notes, due 2015, based solely on the unconditional and
irrevocable guarantee of the Government of Jamaica whose rating
for foreign currency is B1. Jamaica's country ceiling for
foreign currency debt reflects the government's commitment to
fiscal discipline and comparatively low external government debt
ratios. Although, the rating outlook is currently stable, the
credit challenges for Jamaica include a closely managed
exchange-rate regime that is subject to severe, recurrent
pressures, high vulnerability to domestic and external shocks,
such as hurricanes and higher than expected fuel costs,
impacting the tourism industry and economy, along with a large
public-sector debt burden.

Downward pressure on the rating could appear if fiscal results
in the current fiscal year are considered insufficient to
prevent further deterioration of the primary surplus and the
public-sector debt. An aggressive and costly defense of the
currency by using international reserves and domestic interest
rates may also lead to downward pressures. Moody's has noted
that the Government has made efforts to return to a balanced
budget position and has a constitutional provision mandating
debt-service payments as the first expenditure priority. In the
event that Air Jamaica is unable to make timely principal and
interest payments, the unsecured notes will then become an
obligation of the Government of Jamaica and will be included in
its public sector indebtedness which is subject to the provision
of payment under the Jamaican Constitution.

Due to the turmoil in the airline industry and significant
financial losses, the Government of Jamaica assumed total
ownership of Air Jamaica Holdings Limited and its subsidiary,
Air Jamaica Limited, as of December 23, 2004, and has guaranteed
the notes which will be sold in privately negotiated
transactions which, under Rule 144A, do not require registration
under the Securities Act of 1933.

Air Jamaica is the national airline and is an important part of
the transportation infrastructure of Jamaica, a country that is
a vacation destination in the Caribbean region. The company
indicated that it has over 50% of the passenger market and over
70% of the cargo market. Air Jamaica's all Airbus fleet is
currently comprised of 11 A320, 6 A321 and 3 A340 aircraft, and
it operates over 300 flights to destinations in the U.S.,
Canada, United Kingdom and throughout the Caribbean. In December
2004, the company launched a corporate restructuring program to
improve operational efficiencies and reduce costs due to higher
than expected fuel costs and increased competition.

Ratings assigned are:

- Senior Unsecured -- B1
- Outlook -- Stable

Air Jamaica Limited and its parent company, Air Jamaica Holdings
Limited, are headquartered in Kingston, Jamaica.



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

EMPRESAS ICA: To Seek Shareholders' Approval on Capital Increase
----------------------------------------------------------------
Construction company Empresas ICA SA will seek approval on a
proposed capital increase at an extraordinary shareholders
meeting scheduled for July 14, says Dow Jones Newswires.

In a filing with the Mexican Stock Exchange, ICA said shares
would be offered on the local market and distributed on foreign
markets. The amount of the proposed offering will not be
disclosed until the assembly.

ICA, the country's largest engineering and construction company,
posted first-quarter net profit of MXN68 million on sales of
MXN4.01 billion.

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
         URL: http://www.ica.com.mx


SATMEX: Likely to File for Bankruptcy Under Mexican Laws
--------------------------------------------------------
Speculation is mounting that satellite company Satmex may
eventually file for bankruptcy under Mexican legislation,
reports Business News Americas.

Two weeks ago, Satmex's controlling shareholder Sergio Autrey
agreed with its US creditors to extend from June 15 to July 7
the deadline for resolving differences over whether to file for
bankruptcy in the US or Mexico. The agreement was made on
condition that Satmex would not file for bankruptcy protection
under Mexican law, a Concurso Mercantil, before June 28.

Earlier speculations have suggested that the Mexican government,
which holds a US$188-million note for a loan it made to
Firmamento, a holding company controlled by Autrey, will opt for
a Concurso Mercantil. The government is concerned that the loan
would be treated as shareholder debt rather than Satmex debt if
the restructuring takes place under US laws.

Speculations about the possibility of Satmex filing for
bankruptcy under Mexican laws resurfaced after the government
cancelled a meeting with Satmex creditors last week.

"The meeting was cancelled because the government refused to
speak with us," one creditor said.

This meant, Autrey also failed to meet with creditors last week,
and there are no meetings planned in the near future.

BCP Securities analyst James Harper said there are three
possible outcomes to the current scenario: to reach a deal
before July 7; to not reach a deal and file a concurso
mercantil; or for creditors to ask for a further extension of
the July 7 deadline.

"I don't think they are going to reach a deal. So I do think it
will be a concurso mercantil or a second extension," Mr. Harper
told Business News Americas.

Mr. Harper believes creditors will definitely react negatively
to the former considering the fact that sorting through a
bankruptcy deal in Mexico could take years.


TV AZTECA: Shareholders Approve Deportivos Merger
-------------------------------------------------
TV Azteca, S.A. de C.V. (BMV: TVAZTCA); (NYSE: TZA); (Latibex:
XTZA), one of the two largest producers of Spanish-language
television programming in the world announced that an
Extraordinary Shareholders' Meeting held Monday, June 27, at its
corporate offices in Mexico City, unanimously approved by vote
of 99.35% of the Company's shareholders, the merger of Servicios
Deportivos TV into TV Azteca.

Servicios Deportivos TV, a technical advisor of a U.S. developer
of satellite transmission solutions, and a subsidiary of Azteca
Holdings, owns 90 million CPOs of TV Azteca, equivalent to 3% of
the company's outstanding capital stock.

The interest held by Servicios Deportivos TV, is valued at a
price of Ps.5.56 per CPO, which equals an aggregate amount of
approximately Ps.501 million (US$46 million). TV Azteca will
retire the CPOs received pursuant to the merger, reducing its
stockholders equity by the Ps.501 million (US$46 million), as of
June 30, 2005.

The outstanding debt of Servicios Deportivos TV is Ps.512
million (US$47 million), which will be integrated into TV
Azteca's balance sheet. The company anticipates the incremental
debt to be temporary, following its firm commitment to its six-
year plan for uses of cash.

As previously detailed, the cash usage plan entails allocating a
substantial portion of TV Azteca's cash generation to reduce the
company's debt by approximately US$250 million, and to make
distributions to shareholders of over US$500 million by 2008.

The company noted the stockholdings' increase delivers
incremental value to all TV Azteca shareholders, while providing
the company's strategic business planning with additional
distribution alternatives derived from Servicios Deportivos TV's
innovative transmission solutions.

TV Azteca is one of the two largest producers of Spanish
language television programming in the world, operating two
national television networks in Mexico, Azteca 13 and Azteca 7,
through more than 300 owned and operated stations across the
country. TV Azteca affiliates include Azteca America Network, a
new broadcast television network focused on the rapidly growing
US Hispanic market, and Todito.com, an Internet portal for North
American Spanish speakers.

CONTACT: TV Azteca, S.A. de C.V.
         Investor Relations
         Bruno Rangel
         Phone: 52-55-1720-9167
         E-mail: jrangelk@tvazteca.com.mx
                       or
         Rolando Villarreal
         Phone: 52-55-1720-0041
         E-mail: rvillarreal@gruposalinas.com.mx
                       or
         Press Relations
         Tristan Canales
         Phone: 52-55-1720-1441
         E-mail: tcanales@gruposalinas.com.mx
                       Or
         Danie McCosh
         Phone: 52-55-1720-0059
         E-mail: dmccosh@tvazteca.com.mx
         URL: http://www.tvazteca.com.mx/



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

COPACO: Regulator May Favor Plans to Launch Mobile Service
----------------------------------------------------------
Telecoms regulator Conatel plans to grant state fixed-line
operator Copaco permission to enter the mobile telephony
business, Business News Americas reports, citing Conatel's new
president Jorge Pavetti.

This would be good news for Copaco, which is understood to be
exploring this avenue so that it would be a more attractive
purchase should the government attempt to privatize it.

In recent weeks, Copaco's plan to launch the service has become
unpopular within the sector. Even Paraguay's President Nicanor
Duarte has expressed opposition to Copaco's plan.

Duarte acknowledges Copaco's right to a mobile license. However,
the president and his followers believe the Company 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
=================

ALENTUY: Seniat Orders Closure, Inspecting Company Accounts
-----------------------------------------------------------
Tax authority Seniat ordered aluminum products maker Alentuy,
which allegedly failed to meet tax obligations, to close its
operations in Lara state until June 30, reports Business News
Americas. The order came after Alentuy's security guards
physically assaulted authorities investigating the tax issues
surrounding the Company.

Seniat's investigation will focus on the 2004-2005 value-added
tax records that are reportedly packed with serious
irregularities.

Alentuy, which produces aluminum cans, tubes and slugs, employs
780 people.



                            ***********


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

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