TCRLA_Public/050720.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, July 20, 2005, Vol. 6, Issue 142



CARMELO FAZIO: Bankruptcy Initiated After Court Ruling
NOVIPOL S.A.: Liquidates Assets to Pay Debts
PAN AMERICAN ENERGY: IFC Loan Will Not Affect Ratings, Says S&P
PRODUCAMP S.A.: Court Declares Company Bankrupt
SERMED S.R.L.: Reorganization Proceeds To Bankruptcy
SOUTHERN WINDS: Foreign Investors to Take Over Airline

TRANSENER: Government Suspends Petrobras' Deadline to Sell Stake


AGUAS DEL ILLIMANI: Faces Critical Period in Business Cycle


BANCO BRADESCO: Fitch Affirms Ratings
BANCO VOTORANTIM: Fitch Upgrades Long-Term Local Currency Rating
BANKBOSTON (BRAZIL): Moody's Withdraws Ratings


MANQUEHUE NET: Clarifies Independence Following GTD Takeover


OCENSA: S&P Details Credit Analysis

E L   S A L V A D O R

AES CORP.: S&P Affirms 'BB+' Ratings on 3 El Salvadorian Units


ALFA: Alpek to Expand PET Resin Production
CORPORACION DURANGO: Ends Non-Strategic Asset Divestment Program
GRUPO DESC: Higher Sales Move Company to Profitability in 2Q05
GRUPO IUSACELL: Debt Restructuring Speculation Boost ADRs
GRUPO MEXICO: Asarco to Meet With Strikers July 22

GRUPO DESC: S&P Leaves Ratings Unchanged Following Acquisition


PHELPS DODGE: Sets Price for Debt Tender Offer
SPCC: Records 28% Boost to 2Q05 Profits

P U E R T O   R I C O

DORAL FINANCIAL: Declares Cash Dividend on Common Stock


PDVSA: Reviews Foreign Units' Operations for Restructuring
PDVSA: 2004 Annual Report Delayed Pending Audit

     - - - - - - - - - -


CARMELO FAZIO: Bankruptcy Initiated After Court Ruling
Carmelo Fazio S.R.L. enters bankruptcy protection after Court
No. 3 of Mendoza's civil and commercial tribunal 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 Francisco R. Quintero as
trustee. Mr. Quintero will be verifying creditors' proofs of
claim and submit them to court as individual reports. The
trustee will also submit a general report. No dates have been
disclosed for the deadlines of the said reports.

CONTACT: Carmelo Fazio S.R.L.   
         Godoy Cruz 4822 Villa Nueva
         Guaymallen (Mendoza)

         Mr. Francisco R. Quintero, Trustee
         Salta 1829 Ciudad

NOVIPOL S.A.: Liquidates Assets to Pay Debts
Buenos Aires-based Novipol S.A. will begin liquidating its
assets following the pronouncement of the city's civil and
commercial Court No. 16 that the Company is bankrupt, reports
Infobae. The bankruptcy ruling places the Company under the
supervision of court-appointed trustee, Antonio Florencio
Canada. The trustee will verify creditors' proofs of claim until
Aug. 29, 2005. The validated claims will be presented in court
as individual reports on Oct. 11, 2005.

Mr. Canada 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. 22, 2005.

The bankruptcy process will end with the disposal of the
Company's assets in favor of its creditors. Clerk No. 32 assists
the court on this case.

CONTACT: Novipol S.A.
         Hubac 6235
         Buenos Aires

         Antonio Florencio Canada
         Belaustegui 4531
         Buenos Aires

PAN AMERICAN ENERGY: IFC Loan Will Not Affect Ratings, Says S&P
Standard & Poor's Ratings Services said Monday that Pan American
Energy LLC's (PAE; LC: B+/Positive/--; FC: B+/Stable/--) recent
signing of a $250 million loan with the International Finance
Corp. (IFC) through its Argentine branch, Pan American Energy
Sucursal Argentina, will not affect the ratings on PAE. The loan
will be fully guaranteed by PAE. The credit facility comprises a
$110 million 10-year amortizing 'A' loan granted by the IFC, a
$135 million seven-year amortizing 'B' loan provided by
commercial banks, and a $15 million 11-year 'C' loan. Proceeds
will be used to cover the company's financing needs for 2005, in
light of its capital expenditures program in the Exploration and
Production segment in Argentina. While, as we expected, the
company is moderately increasing its leverage, the transaction
improves its maturity schedule, and the overall effect is
positive for PAE's credit quality. We expect PAE to continue
improving its financial profile, and will monitor the pace and
extent of the improvements, in the context of Argentina's
institutional risk, to determine the possibility of an upgrade.

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

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

PRODUCAMP S.A.: Court Declares Company Bankrupt
Trenque Lauquen's civil and commercial Court No. 1 declared
local company Producamp S.A. bankrupt, reports Infobae. The
Company was undergoing reorganization when the ruling was

The receiver, Graciela Esther Rea, will verify claims "por via
incidental", as the court ordered. The receiver will also be
responsible for the individual and general reports.

CONTACT: Producamp S.A.
         Aristobulo del Valle 233

         Ms. Graciela Esther Rea, Trustee
         Urquiza 327
         Trenque Lauquen

SERMED S.R.L.: Reorganization Proceeds To Bankruptcy
The reorganization of Sermed S.R.L. has progressed into
bankruptcy. Argentine news source Infobae relates that Bahia
Blanca's civil and commercial Court No. 7 ruled that the Company
is "Quiebra Decretada". The report adds that the court assigned
Raquel Angelica Morales as trustee, who will verify creditors'
proofs of claim until Aug. 16, 2005.

The court also ordered the trustee to prepare individual reports
after the verification process is completed, and have them ready
by Sep. 28, 2005. A general report on the bankruptcy process is
expected on Sep. 28, 2005.

Clerk No. 6 assists the court with the proceedings.

CONTACT: Sermed S.R.L.
         Estomba 643
         Bahia Blanca

         Ms. Raquel Angelica Morales, Trustee
         D Orbigny 325
         Bahia Blanca

SOUTHERN WINDS: Foreign Investors to Take Over Airline
The sale of Argentine troubled airline Southern Winds (SW) is
surrounded by a number of misapprehensions. Previously, reports
indicated that hotel businessman Horacio Rozemblum would become
the new owner of the airline. However, David Esquivel, a lawyer
that signed a purchase contract on July 8, explained last Monday
that Rozemblum was just a mediator that helped to join the
purchasing and selling parties, but he is not the purchaser.

Sources familiar with the deal said that the investment group
that would acquire 100% of SW, as long as the due diligence
about the Company's numbers gives satisfactory results, is
composed by a US and a European airline with no operations in
Argentina, and two foreign investment funds. The source didn't
reveal who the investors are based on a confidentiality clause.

Other sources close to the purchasing group said that Rozemblum
might become the local partner of the foreign group, so as to
meet a requirement of the Argentine Aero Commercial Law that
establishes that at least 51% of a local airline has to be in
the hands of an Argentine party.

The airline, which has US$60 million in debt, is controlled by
Juan Maggio, with a 67% stake, while Italian group Volare owns a
30.1% stake and the other 2.9% is in hands of Miguel Cartasso

TRANSENER: Government Suspends Petrobras' Deadline to Sell Stake
Argentina's Energy Secretariat has suspended its resolution that
established March 31, 2006 as the deadline for Petrobras
Energia, the local subsidiary of Brazil's federal energy
producer Petrobras, to sell its stake in power transporter
Transener S.A. The suspension, according to a Dow Jones
Newswires report, came after Petrobras Energia made a
presentation to the Secretariat.

Petrobras Energia and local investment group Dolphin Fund
Management hold equal stakes in Citelec, Transener's holding
company. Petrobras Energia gained the stake when it took over
Argentine company Perez Companc in 2003. As part of the deal,
Petrobras promised Argentine antitrust regulators that it would
sell its stake in Transener to address the government's concerns
that the country's biggest power transporter would be in foreign

Dolphin has already said it has not intention to increase its
stake in Transener.

          Paseo Colon 728 6th Floor
          (1063) Buenos Aires
          Republica Argentina
          Tel: (54-11) 4342-6925
          Fax: (54-11) 4342-7147
          Web site:


AGUAS DEL ILLIMANI: Faces Critical Period in Business Cycle
The next two weeks will be crucial for ailing Aguas del Illimani
(AISA), whose water concession was rescinded by the government
early this year after residents protested against poor service
and high connection charges. According to Business News
Americas, a commission appointed by former President Carlos Mesa
to oversee the handing back of the concession has until July 29
to format a new administration, while AISA has until July 26 to
renew US$15 million in bonds required under the terms of its

The commission may decide this week whether to press ahead with
an audit of the Company's books from 1997, when it won the
concession to operate basic services in the Bolivian capital La
Paz and satellite city El Alto, to date.

As previously reported, AISA is resisting the audit, claiming
that the period 1997-2001 has already been covered by a previous

An audit of the Company's books from 1997 will be carried out
"unilaterally if AISA refuses to reach a mutual agreement" on
the issue, Sisab director, Alvaro Camacho, said earlier.

The extent of the audit must be sufficient to reveal the level
of real investment carried out by the Company to date.

The regulator wants to make sure the investment recorded in the
Company's books is real before it will compensate for the
rescission of the contract.

AISA is controlled by French water giant Suez.


BANCO BRADESCO: Fitch Affirms Ratings
Fitch Ratings, the international rating agency, affirmed Monday
Banco Bradesco S.A.'s ratings (Bradesco) as follows:

--Long-term foreign currency rating: 'BB-'(BB minus) with a
Stable Outlook;

--Long-term local currency rating 'BB+' with a Stable -Outlook;

--Short-term foreign and local currency rating 'B';

--Individual rating 'C';

--Support rating '4';

--National Long-term rating: 'AA(bra)' with a Stable Outlook;

--National Short-term rating: 'F1+(bra)'.

The ratings reflect Bradesco's robust franchise and consistent
track record. The foreign currency ratings are at Brazil's
country ceiling. The local currency rating, higher than the
sovereign's, reflects a broad-based national franchise with a
strong track record of consistent results through turbulent
economic cycles, achieved thanks to solid management of a
diversified business customer and deposits base. As has its
peers, Bradesco has seen robust recent performance as the
strength of its franchise has helped to produce strong loan
growth driven by consumer and middle-market lending, accompanied
by broad-based growth of non-interest income, which has boosted
results to record profits. While the growing level of Tier 2
instruments in its capital base bears watching, the bank's
commitment to maintain its Tier 1 base at or above Brazil's high
regulatory minimum should assure adequate capitalization as the
bank continues its growth.

Bradesco is the largest privately owned financial conglomerate
in Latin America, frequently holding market shares of 10% to
20%. Its insurance and private pension fund subsidiaries are the
largest in the country. It is controlled by two entities managed
by the bank's top executives.

Fitch will be releasing a complete analysis on Bradesco shortly.

CONTACT:  Kathryn Beeck +5511 4504 2600 Sao Paulo
          Maria Rita Goncalves +5521 4503 2600l, Rio de Janeiro
          Peter Shaw +1-212-908 0553, New York

BANCO VOTORANTIM: Fitch Upgrades Long-Term Local Currency Rating
Fitch Ratings, the international rating agency, upgraded Monday
Banco Votorantim S.A.'s (BV) local currency long-term rating to
'BB+' from 'BB'. At the same time, Fitch has affirmed the bank's
foreign currency long- and short-term ratings of 'BB-' and 'B',
respectively; the bank's local currency short-term rating of 'B'
and the national long- and short-term ratings of 'AA(bra)' and
'F1+(bra)', respectively. The bank's individual rating of 'C/D'
and its support rating of '4' were also affirmed. The Rating
Outlook on all long-term ratings is Stable.

The upgrade of BV's local currency long-term rating reflects
Fitch's opinion regarding the strength of the bank's ultimate
parent - Votorantim Participacoes S.A, (VPAR) to which a local
currency rating of 'BBB' and a national long-term rating of
'AAA' were recently assigned. Fitch believes that the group has
both the commitment and financial strength to support the bank,
in case of need. VPAR is one of Latin America's largest
privately owned industrial conglomerates. Long one of Brazil's
strongest companies, VPAR's ratings reflect a diverse operating
asset base, the strong market position and competitive cost
structure of the industrial businesses of metals, cement, and
pulp and paper, as well as its conservative financial profile.
The company's core businesses are cyclical and exposed to price
and volume volatility. These risks, however, are partially
mitigated by the diversity of revenues and cash flows across
industry sectors and their relatively low risk correlation,
which diminishes the overall risk of the business portfolio. For
more detailed information of Votorantim's industrial arm, please
refer to Fitch's release regarding 'VPAR' at

The foreign currency ratings of BV are at Brazil's country
ceiling. The individual rating reflects a clear focus, ability
to manage risk and low cost structure. It also reflects the high
exposure to Brazilian sovereign debt (Q105: about 7 times
equity) and concentrations in funding base.

The Votorantim brand name commands immense respect in Brazil and
is an important door-opener. BV is a medium-size bank focused on
credit and treasury, with total assets of BRL38.4 billion, total
deposits of BRL15.1 billion and equity of BRL3.4 billion as of
March 2005. BV is 100% controlled by Votorantim Financas S.A.
(VF), a holding company 100% controlled by VPAR. BV operates out
of a small structure of three domestic branches, 31 consumer
finance offices and, internationally, through a subsidiary and a
branch in Nassau and representative offices in London and New

CONTACT:  Claudio Gallina +55-11-4504-2600, Sao Paulo
          Kathryn Beeck +55-11-4504-2600, Sao Paulo
          Peter Shaw +1-212-908-0553, New York

MEDIA RELATIONS: Jaqueline Carvalho +55 21 4503 2623, Rio de

BANKBOSTON (BRAZIL): Moody's Withdraws Ratings
Moody's Investors Service has withdrawn all ratings for
BankBoston NA (Brazil), BankBoston Banco Multiplo S.A., and
BankBoston Latino Americano S.A, for business reasons.

This action does not reflect a change in the banks'
creditworthiness. For further details please refer to Moody's
Withdrawal Policy on

The combined operations of BankBoston in Brazil had total assets
of US$8.1 billion in March 31, 2005.

The following ratings were withdrawn:

- BankBoston Banco Multiplo S.A.

Bank Financial Strength Rating: D+, with stable outlook

Long-term and short-term foreign currency deposit rating: B2/Not
Prime, with positive outlook

Long-term and short-term foreign currency bond rating: Ba2/Not
Prime, with positive outlook

- BankBoston, N.A. (Brazil)

Long-term foreign currency deposit rating: B2, with positive

Short-term foreign currency deposit rating: Not Prime, with
stable outlook

- BankBoston Latino Americano S.A,

Senior Unsecured MTN Program: Ba3, with positive outlook

Other short-term: Not Prime, with stable outlook


MANQUEHUE NET: Clarifies Independence Following GTD Takeover
Chilean telco Manquehue Net will operate as an independent
company even after local telecoms holding company GTD takes over
the firm, Business News Americas reports. According to a source
close to GTD, the holding company's decision comes in light of
the strength Manquehue has in the residential segment.

GTD plans to maintain its brand, targeting corporations, while
Manquehue plans to fortify its presence with greater penetration
in the broadband market, specifically in the higher income

At the end of 2004, GTD offered to pay CLP14.5 billion (US$25mn)
to acquire 100% of Manquehue including the latter's US$85-
million debt. GTD hopes to finish due diligence on the Company
next month, after which, both companies are expected to sign the
papers for an acquisition operation.

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


OCENSA: S&P Details Credit Analysis

The 'BB' long-term foreign currency rating on Oleoducto Central
S.A.'s (OCENSA) tranche A debt reflects the risk of a single-
source repayment (Ecopetrol's contractual payments to OCENSA).
The ratings on OCENSA's tranche A debt also take into account
OCENSA's strategic importance to the Republic of Colombia
through Ecopetrol, which holds a 35% stake in OCENSA's capital
stock. These strengths are offset in part by a potential
increase in the number of guerilla attacks along the pipeline,
which could lead to delays in crude shipments, and weaker than
originally expected production at the Cusiana and Cupiagua oil

OCENSA's debt is divided into four tranches, each of which is
supported almost exclusively by contractual payments, including
tariffs, advance tariff payments, transportation notes, and
tariff advances. Ecopetrol is the initial shipper in the case of
OCENSA's tranche A debt. The initial shipper tariff covers the
full amount of OCENSA's costs and is established by OCENSA
annually and adjusted monthly. The tariff incorporates OCENSA's
operating and maintenance costs, scheduled payments of principal
and interest on senior debt of the related senior debt tranche,
and a fixed return on equity for each of the pipeline's owners.
If tariff payments are insufficient to cover interest payments
in any period, the initial shippers are obligated to advance the
shortfall to OCENSA through the payment of advanced tariffs or
the purchase of transportation notes. If an initial shipper
fails to make such payments as they come due, OCENSA is
authorized to sell the Cusiana petroleum (other than that from
Royalty Oil) delivered to it by that initial shipper and to
retain the proceeds to pay the amount of any unpaid tariffs. The
terms of the borrowing agreements also compel Ecopetrol
unconditionally to make minimum tariff payments to OCENSA for
180 days following the declaration of force majeure or any other
excusable event, providing additional flexibility for OCENSA to
weather service interruptions.

OCENSA is also considered a strategic asset to the Republic of
Colombia given that it is the only export route for Cupiagua and
Cusiana crude oil and can transport more than 600,000 barrels
per day (bpd), enabling Colombia to increase crude oil exports
substantially. OCENSA was attacked in 2001, 2002, and 2003. The
security environment in Colombia is difficult and potential
attacks remain a concern.

From 1999 to 2004, production levels at Cusiana and Cupiagua
declined gradually and never reached the originally projected
volumes. Segment 2 oil transportation during the first-quarter
2005 reached 239,000 bpd, below the projected 243,300 bpd

OCENSA's lower-than-expected oil transportation derives from a
generalized decline of oil production in Colombia, which is
explained by a slowdown in exploration activities during the
last decade. Recently, Ecopetrol started focusing on the
production of heavy crudes, which is expected to partially
offset the adverse impacts in OCENSA's low transportation
volumes. However, due to low transportation volumes during 2004,
OCENSA received a tariff advance payment for about $137 million.
As transportation volumes are expected to continue to decline
during 2005, OCENSA could require another tariff advance payment
to meet the 2005 scheduled debt service.

OCENSA is a capital stock company formed to acquire, develop,
own, and operate the 840-kilometer Oleoducto Central pipeline,
which transports crude from the Cupiagua and Cusiana oil fields
in Colombia's Llanos Basin to the Port of Covenas.


The outlook on OCENSA's tranche A debt is stable, and reflects
the foreign currency rating and outlook of the Republic of
Colombia, due to the government's ownership of Ecopetrol, the
importance of the oil company to public-sector revenues and to
the country's economy, and the considerable government's
oversight of the company's activities. A sharp decline in oil
production activities or significant deterioration in national
security could result in downward pressure on OCENSA's

Primary Credit Analyst: Luis Manuel Martinez, Mexico City (52)

Secondary Credit Analyst: Jose Coballasi, Mexico City (52)55-

E L   S A L V A D O R

AES CORP.: S&P Affirms 'BB+' Ratings on 3 El Salvadorian Units
Standard & Poor's Ratings Services affirmed Monday its 'BB+'
issuer credit ratings on Compania de Alumbrado Electrico de San
Salvador S.A. de C.V. (CAESS), Empresa Electrica de Oriente S.A.
de C.V. (EEO), and Distribuidora Electrica de Usulut n S.A. de

Standard & Poor's also said that it affirmed its 'AAA' rating on
CAESS's US$120 million wrapped fixed-rate notes, which are due
in 2011.

The outlook on all three companies is stable.

All three entities are El Salvador-based electric distribution
companies majority owned and controlled by AES Corp.

The rating on the notes reflects the unconditional and
irrevocable guarantee of full payment on principal and interest
as scheduled, provided by MBIA Insurance Corp. (AAA/Stable/--),
pursuant to MBIA's financial guaranty insurance policy. The
notes also have joint and several guarantees from CAESS, EEO,

"The ratings on CAESS, EEO, and DEUSEM are limited by the tariff
formula being untested in a stress environment," said Standard &
Poor's credit analyst Fabiola Ortiz. "In addition, given the
undeveloped capital markets in El Salvador, the companies have
limited financial flexibility compared with distribution
companies operating in countries with more developed financial

These negative factors are mitigated by the companies' generate
stable cash flow, favorable tariff structure, and customer base
profile. AES has strong management experience in successfully
operating other distribution companies in Latin America. In
addition, there is a quasi-monopoly environment in which the
companies provide electric distribution.

The financial profile is expected to remain stable over the
tenure of the debt, given the amortization schedule and fairly
stable cash flow. Operations have been stable and are superior
to peers, as demonstrated by low distribution losses.

The stable outlook reflects expectations that the regulators
will treat the tariff adjustments fairly. Both CAESS and EEO are
expected to remain in a central position in the country's
distribution sector. The rating could be pressured downward if
the financial profile of the companies deteriorates
considerably. Standard & Poor's expects the company's debt-to-
capitalization ratio and debt-service coverage ratio of less
than 60% and more than 1.15x, respectively.

Primary Credit Analyst: Fabiola Ortiz, Mexico City (52) 55-5081-

Secondary Credit Analyst: Federico Mora, Mexico City (52) 55-


ALFA: Alpek to Expand PET Resin Production
Alpek, the petrochemical group of Mexica's No. 2 industrial
company Alfa SA, announced Thursday that its subsidiary DAK
Americas will expand its PET resin production capacity by
constructing a new manufacturing line at its Cape Fear site,
near Wilmington, North Carolina. The PET expansion forms part of
Alfa's overall strategy of investing in its core businesses.

The new facility will add 200,000 tons per year to DAK Americas'
existing capacity of 300,000 tons. The amount of investment was
not disclosed. A project of this magnitude typically takes 18
months to complete.

PET resins are primarily used to produce plastic bottles for
carbonated soft drinks and other beverages. The expansion will
allow DAK Americas to continue to serve the growing PET market
in North America, which grows at a rate of 8% per year.

"Our new world-scale facility will incorporate new proprietary
state-of-the-art technology that will deliver improved product
performance," said Jose de Jesus Valdez, Alpek's General
Director. "Additionally, we will benefit from using existing
equipment and infrastructure on-site, along with enhanced
internal logistics as the new facility is being located adjacent
to our existing PTA plant, which will supply the raw materials,"
he added.

In addition to the Cape Fear facility, DAK Americas operates two
world-scale PET plants at its Cooper River Site, near
Charleston, South Carolina, and its Cedar Creek Site, near
Fayetteville, North Carolina. In total, these two plants produce
300,000 tons of PET per year.

Alpek is a Mexican company involved in the production of
petrochemicals and synthetic fibers. The company is the second
largest producer of PTA in North America and one of the leading
companies in PET in the USA. As well, Alpek is the leader in the
nylon fibers, polypropylene and expandable polystyrene markets
in Mexico. In 2004, Alpek reported sales in excess of US$ 2.9
billion and employed more than 4,500 people at its various
plants in Mexico and the USA.
         Enrique Flores
         Vice President
         Corporate Communications
         Phone: 01 52 81 8748 1207

CORPORACION DURANGO: Ends Non-Strategic Asset Divestment Program
Corporacion Durango, S.A. de C.V., the largest papermaker in
Mexico, announced on June 15, 2005, through its subsidiary
Ponderosa Industrial de Mexico, S.A. de C.V., that it
successfully closed on the divestiture of a particleboard plant,
located in the State of Chihuahua.

With this transaction, Corporacion Durango concluded its program
to divest non-strategic assets, particularly those with minimal
impact to the overall business and strategic vision. This
permits the Company to reinvest in its core paper business where
there is better value and growth potential.

The divested operation was not a central business for
Corporacion Durango, neither the paper industry nor its
products. Sales from the business only represented 2.5% of the
Company's total sales.

Corporacion Durango is one of the leading industrial groups in
Mexico and is the largest paper and container maker nationwide.

CONTACT: Corporacion Durango, S.A. de C.V.
         Mayela R. Velasco
         Phone: 52 (618) 829 1008

         Miguel Antonio R.
         Phone: 52 (618) 829 1070

         The Global Consulting Group
         Kevin Kirkeby
         Phone: (646) 284-9416

GRUPO DESC: Higher Sales Move Company to Profitability in 2Q05
Mexican conglomerate Desc SA (DESC.MX) reported a net profit of
MXN2.5 million in the second quarter of 2005, compared with a
net loss of MXN146.6 million in the year-ago period, reveals Dow
Jones Newswires. The Company attributed positive results to
sales of MXN6.10 billion in the 2Q05, higher than the MXN5.93
billion in the year-ago period. Operating profit rose 13% to
MXN286.6 million.

Exports rose 10% to US$265 million due to higher prices and
volumes in the auto parts and chemicals divisions. Costs
declined in relation to sales despite rising raw materials
prices, including steel, natural gas and some petrochemicals,
Desc said.

Net debt in the second quarter fell by US$50 million to US$570
million. DESC S.A DE C.V. is one of the largest industrial
groups in Mexico. Through its subsidiaries, the Company is a
leader in the Automobile Parts, Chemical, Food and Property

          Marisol Vazquez-Mellado
          Jorge Padilla
          Tel: (5255) 5261-8044

          In the U.S.
          Maria Barona
          Melanie Carpenter
          Tel: 212-406-3690

GRUPO IUSACELL: Debt Restructuring Speculation Boost ADRs
The histories highs of Grupo Iusacell's (NYSE: CEL) ADRs spawned
speculations among analysts that the Mexican mobile operator is
nearing a debt restructuring deal with creditors. Business News
Americas recalls that on May 3, Iusacell's ADRs were trading at
US$8. On July 14, they closed at US$20.47 and on July 18 at
US$20.48. Iusacell is currently negotiating to restructure
US$800 million of debt.

According to James Harper, director of corporate research at US
investment firm BCP Securities, there is speculation that in a
debt deal there is not going to be as much equity dilution for
shareholders as previously thought.

Normally, in cases of default or bankruptcy under US law, share
value can be diluted to zero because of the debt load, as
creditors have priority over shareholders when it comes to
repayment, Mr. Harper explained.

However, regarding the potential terms of Iusacell's debt
restructuring, there is a "deal sheet" circulating "that does
not involve substantial equity dilution; that allows [Iusacell's
owner Ricardo] Salinas to keep control of the company. That's
why the shares would go up," Business News Americas quoted Mr.
Harper as saying.

"There's expectation that there's going to be an out of court
agreement, whereby shareholders will be allowed to keep most or
all of the company," Mr. Harper added.

Sergio Rodriguez, an analyst with Fitch Ratings Mexico, shares
Harper's view of the situation.

"Merely speculating I think it could have something to do with
advances with its creditors," Mr. Rodriguez said.

Meanwhile, Sergio Legorreta, a lawyer with Baker & McKenzie,
says the historic rise in Iusacell's ADRs may have been fuelled
by rumors of an imminent purchase of the Company and/or its
sister company Unefon. The companies could be seen as attractive
as they both use CDMA technology and so there would be

CONTACT: Grupo Iusacell, S.A. de C.V.  
         Jose Luis Riera K.
         Chief Financial Officer
         J. Victor Ferrer
         Finance Manager
         Phone: 5255-5109-5927

GRUPO MEXICO: Asarco to Meet With Strikers July 22
Asarco LLC and the striking workers at Grupo Mexico's US copper
mining unit have agreed tentatively to meet on July 22 for the
first talks since the strike started, Bloomberg reports, citing
Terry Bonds, District 12 supervisor for the United Steelworkers
of America.

"We would certainly consider almost anything that wasn't
positive rather negative, and we haven't gotten anywhere close
to that," Mr. Bonds said.

Pete Cinquemani, commissioner of the Federal Mediation &
Conciliation Service, a U.S. government agency, was invited to
the July 22 meeting, tentatively set for Phoenix, Mr. Bonds

About 1500 Asarco workers are striking because the Company has
allegedly violated fair-labor practices by refusing to negotiate
in good faith.

Asarco, which was purchased by Grupo Mexico in 1999, has
demanded wage freezes and cuts in medical and pension benefits.
Those steps are necessary to bring down the costs of Asarco's
operations in order to be globally competitive, said Asarco CEO
Daniel Tellechea.

GRUPO DESC: S&P Leaves Ratings Unchanged Following Acquisition
Standard & Poor's Ratings Services said Monday that Desc S.A. de
C.V.'s (Desc; B+/Stable/--) announcement that it has closed the
acquisition of the Particle Board segment (Paneles Poderosa) of
Ponderosa Industrial de Mexico S.A. de C.V. has no impact on the
rating or outlook on the company. The announcement is consistent
with our expectations that Desc will strengthen its presence in
some markets but will not pursue major investments during the
next two years, as they could compromise the issuer's efforts to
improve its financial flexibility and the conditions required by
its debt structure. The acquired operation has no debt and the
transaction will be funded with operating cash flow. The
acquisition is also expected to increase Desc's revenues from
the particle and board laminates business to more than $100

Primary Credit Analyst: Federico Mora, Mexico City (52) 55-5081-

Secondary Credit Analyst: Santiago Carniado, Mexico City (52)


PHELPS DODGE: Sets Price for Debt Tender Offer
Phoenix-based copper miner Phelps Dodge Corp. (NYSE: PD - News),
which is active in Peru and Chile, announced Monday the
reference yield for its previously announced tender offer for
any and all of its outstanding 8 3/4 percent notes due 2011. The
principal amount of the notes outstanding, which were issued by
Phelps Dodge Corp., is approximately $384 million.

The reference yield was set at 4.048 percent, resulting in a
purchase price per $1,000 principal amount of notes of
$1,199.82. The accrued interest per $1,000 principal amount of
notes will be $11.91 with settlement of the tender offer on July
20, 2005.

The price was determined at 2:00 p.m. New York City time today,
as described in the Offer to Purchase dated July 12, 2005. It
was based on a yield to maturity equal to a fixed spread of 75
basis points plus the yield on the 5.0 percent, Aug. 15, 2011,
U.S. Treasury bond. All payments for notes validly tendered and
accepted for purchase will include accrued and unpaid interest
on the principal amount tendered up to, but not including, the
payment date.

The tender offer will expire at 5:00 p.m. New York City time on
Tuesday, July 19, 2005, unless extended by Phelps Dodge. The
tender offer is not conditioned on a minimum amount of 8 3/4
percent notes being tendered. No tenders will be valid if
submitted after the expiration time.

The terms and conditions of the tender offer, including the
conditions of Phelps Dodge's obligation to accept the notes
tendered and pay the purchase price for them, are set forth in
the Offer to Purchase.

Phelps Dodge has retained J. P. Morgan Securities Inc. to serve
as the dealer manager for the tender offer and Global Bondholder
Services Corp. to serve as the depositary and information agent
for the tender offer.

Information and assistance regarding the mechanics of the tender
offer and copies of the Offer to Purchase may be obtained by
calling Global Bondholder Services Corp. toll-free at 866-857-
2200, or collect at 212-430-3774. Questions regarding the tender
offer may be directed to J. P. Morgan Securities at 866-834-

This news release does not constitute an offer to purchase any
securities or a solicitation of an offer to sell any securities.
The tender offer is being made only pursuant to the Offer to
Purchase and only to such persons and in such jurisdictions as
are permitted under applicable law. In any jurisdiction where
the laws require the tender offer to be made by a licensed
broker or dealer, the tender offer will be deemed made on behalf
of Phelps Dodge by J.P. Morgan Securities Inc., or one or more
registered brokers or dealers under the laws of such

Phelps Dodge Corp. is the world's second largest copper miner
and its worldwide operations include Cerro Verde in Peru and
Candelaria and El Abra copper mines in Chile.

SPCC: Records 28% Boost to 2Q05 Profits
Southern Peru Copper Corporation (NYSE and LSE: PCU) (SPCC), a
subsidiary of Grupo Mexico, S.A. de C.V., posted a 28% increase
in second-quarter profit to US$307.2 million, compared with the
same period last year. According to a report by Reuters, the
Company, which operates the Toquepala and Cuajone pits in Peru's
Andes, posted diluted earnings per share, -- which account for
unexercised shares in options, warrants and similar issues -- of
US$2.09 in the second quarter, compared with US$1.63 in the
second quarter of 2004.

SPCC's results are its first quarterly earnings following its
merger with Grupo Mexico's Minera Mexico operations on April 1.

The Company announced Monday it will pay a dividend worth
US$1.043 per share, payable Aug. 19. The dividend will be paid
to shareholders on record at the close of business on Aug. 5.

          Avenida Caminos del Inca #171
          Chacarilla del Estanque
          Santiago de Surco
          Lima, 33
          Phone: +51-(0)1-372-1414
          Officers: Oscar Gonzalez Rocha, Pres.

          GRUPO MEXICO S.A. DE C.V.
          Avenida Baja California 200,
          Colonia Roma Sur
          06760 Mexico, D.F., Mexico
          Phone: +52-55-5264-7775
          Fax: +52-55-5264-7769
          Web site:

P U E R T O   R I C O

DORAL FINANCIAL: Declares Cash Dividend on Common Stock
Doral Financial Corporation (NYSE:DRL), a diversified financial
services company, announced Monday that the Board of Directors
declared a regular cash quarterly dividend of $0.18 per common
share to be paid on September 9, 2005 to shareholders of record
on August 25, 2005.

Doral stated that, while it is unable to provide at this
juncture complete financial results for the reporting period due
to the previously announced restatement process, it is providing
certain unaudited and preliminary operational data for the
second quarter ended June 30, 2005.

Second quarter 2005 operational results included the following:

-- Loan production was a quarterly record aggregating $2.30
billion, compared to $2.16 billion for the first quarter 2005
and $1.95 billion for the second quarter 2004, an increase of 6%
quarter over quarter and 18% higher than the second quarter of
the prior year. During the quarter ended June 30, 2005, internal
originations increased to $1.45 billion from $1.19 billion in
the first quarter 2005 and the second quarter 2004, an increase
of 22%.

Doral wishes to caution readers that they should not draw any
inference from the loan production data of Doral's gain on sale
of mortgage loans or earnings to be reported for the first and
second quarters of 2005.

-- The mortgage loan servicing portfolio increased to $14.98
billion as of June 30, 2005 compared to $14.63 billion as of
March 31, 2005 and $13.53 billion as of June 30, 2004, an
increase of 2% over March 31, 2005 and 11% over June 30, 2004.

-- Doral's banking subsidiaries increased deposits to $3.99
billion as of June 30, 2005 from $3.53 billion as of March 31,
2005 and $3.24 billion as of June 30, 2004, an increase of 13%
quarter over quarter and 23% over June 30, 2004.

-- As of June 30, 2005, the Company had cash and cash
equivalents of $2.7 billion compared to $2.8 billion as of March
31, 2005 and $1.7 billion as of June 30, 2004. Of this amount,
$1.7 billion was unencumbered as of June 30, 2005.

Doral reported that it is working diligently to conclude its
restatement process. In addition, the Company took the
opportunity to confirm that to date it had not received a notice
of default under either of its two public indentures and,
accordingly, the 60 and 90-day respective grace periods for not
filing its quarterly unaudited financial results for the first
quarter had not yet begun to run.

Doral Financial Corporation, a financial holding company, is the
largest residential mortgage lender in Puerto Rico, and the
parent company of Doral Bank, a Puerto Rico commercial bank,
Doral Securities, a Puerto Rico based investment banking and
institutional brokerage firm, Doral Insurance Agency, Inc. and
Doral Bank FSB, a federal savings bank based in New York City.

         Investor Relations:
         Richard F. Bonini, 212-329-3729
         Lucienne Gigante, 212-329-3733


PDVSA: Reviews Foreign Units' Operations for Restructuring
State oil firm Petroleos de Venezuela (PDVSA) is currently
studying the operations of its 189 foreign subsidiaries as it
seeks to restructure domestic and international holdings to make
them more efficient, reports Business News Americas.

The subsidiaries currently being reviewed include US refining
arm Citgo, German refining unit Veba Oil, and Nynas, a refining
joint venture with Finland's Fortum Oy that owns facilities in
Scotland and Sweden.

The results of the study will determine PDVSA's next step.

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:

PDVSA: 2004 Annual Report Delayed Pending Audit
PDVSA will delay the filing of its 2004 annual report to the US
Securities Exchange Commission (SEC), reports Business News
Americas. In a letter to the regulator, PDVSA stated: "The
filing will be made as soon as the 2004 audit is completed."

A PDVSA official said the delay was temporary but gave no
information on when the report will be filed.

PDVSA CFO Eduomario Carruyo said in June that both the Company's
2003 and 2004 financial reports would be filed by July.

PDVSA has delayed making its 2003 and 2004 filings with the SEC,
citing problems in compiling detailed financial information
after a national oil strike in late 2002 and early 2003 against
President Hugo Ch vez.

The strike cut off oil production and exports and in the
aftermath Chavez fired 18,000 PDVSA workers and split the
Company into eastern and western units.


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

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

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