TCRLA_Public/050802.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

            Tuesday, August 2, 2005, Vol. 6, Issue 151



AGUAS PROVINCIALES: Emgasud's Offer Fails to Attract Workers
BAVIPE S.A.: Claims Review, Verification Deadline Set
C.E.S.A. CONSTRUCCIONES: To Present Final Reorganization Plan
CIA AGRICOLA: Court Authorizes Plan, Concludes Reorganization
FARMORE S.R.L.: Liquidates Assets to Pay Debts

INDUSTRIAS METALURGICAS: Bankruptcy Converted to Reorganization
MAQUIRENTAL S.A.: Bankruptcy Initiated After Court Order
SALUD SERVICIOS: Individual Reports to be Submitted August 10
SANATORIAL EXPRESS: Court Mandates Liquidation Necessary
TELEFONICA DE ARGENTINA: Board Approves June 30 Financial Data

TRANSPORTES SAN MARTIN: Trustee to Submit Individual Reports


OLYMPUS UNITED: Central Bank Takes Over Management, Control


AGUAS DEL ILLIMANI: To Continue Running Water Concession


BANCO DO BRASIL: Fitch Affirms Existing Ratings
BANCO RURAL: Fitch Downgrades Ratings; Issues Negative Watch
CSN: Moody's Upgrades Certain Ratings; Rating Outlook Positive
EMBRATEL PARTICIPACOES: Announces Results of Shareholder Meeting
LIGHT SERVICOS: French Parent Plans Partner Search

TCP: Board Approves Capital Increase


AHMSA: Coal, Iron Ore Mines Boost 2Q Bottom Line
CYDSA: Ends 1H05 With MXN18 Million Net Profit
EMPRESAS ICA: S&P Ups Ratings to 'B', Off Watch; Outlook Stable
EMPRESAS ICA: Considers Exercising Option to Buy GACN Stake
GRUPO ELEKTRA: BNY to Terminate GDSs Program August 1

SATMEX: Settles Conflict With Creditors Regarding Ch. 11 Filing

T R I N I D A D   &   T O B A G O

BWIA: Airline's Future Awaits Cabinet Decisions


CANTV: Responds to Social Chamber's Pension Adjustment Decision
CANTV: Morgan Stanley Reduces Stock Recommendation

     - - - - - - - - - -


AGUAS PROVINCIALES: Emgasud's Offer Fails to Attract Workers
Gas distributor Emgasud's offer to buy French firm Suez's stake
in Aguas Provinciales de Santa Fe has been met with resistance
from two groups. According to Business News Americas, the Aguas
Provinciales workers' union, which has a 10% stake in the Santa
Fe water utility, went on strike last week to prevent Emgasud
from taking over Suez's local unit.

Meanwhile, provincial authorities are not pleased with Emgasud's
offer. Emgasud recently submitted to the Santa Fe provincial
government documentation confirming its purchase of Suez's
interest in Aguas Provinciales.

But according to reports, authorities are asking Emgasud to
provide more information partly because Fides Environment - the
purchase vehicle for the Suez stake in Aguas Provinciales - was
formed with equity of just ARS20,000 (US$7,000) despite the
ARS1.75 billion promised in investments by Emgasud.

"Various things are still being discussed," said sources at
Suez, confirming that no deal has yet been sealed with Emgasud.
Whatever happens, any new contract will have to be approved by
Santa Fe government.

BAVIPE S.A.: Claims Review, Verification Deadline Set
Court No. 4 of Buenos Aires' civil and commercial tribunal
declared Bavipe S.A. "Quiebra," reports Infobae. Clerk No. 7
assists the court on the case, which will close with the
liquidation of the Company's assets to repay creditors.

Beatriz Mazzaferri, who has been appointed as trustee, will
verify creditors' claims until Aug. 24, 2005 and then prepare
the individual reports based on the results of the verification

CONTACT: Ms. Beatriz Mazzaferri, Trustee
         Lavalle 1459
         Buenos Aires

C.E.S.A. CONSTRUCCIONES: To Present Final Reorganization Plan
C.E.S.A. Construcciones Electricas S.A. will propose its
settlement plan before its creditors in a general assembly set
on Feb. 7, 2006 after the court-appointed trustee submitted the
general report on June 24, 2005, Infobae reports. Court No. 4 of
Tucuman's civil and commercial tribunal approved the Company's
petition for reorganization.

CIA AGRICOLA: Court Authorizes Plan, Concludes Reorganization
Buenos Aires-based company Cia Agricola Nobili S.A. concluded
its reorganization process, according to data released by
Infobae on its Web site. The conclusion came after the city's
civil and commercial Court No. 2, with assistance from Clerk No.
3, homologated the debt plan signed between the Company and its

FARMORE S.R.L.: Liquidates Assets to Pay Debts
Farmore S.R.L. will begin liquidating its assets following the
pronouncement of Buenos Aires' civil and commercial Court No. 16
that the Company is bankrupt, Infobae reports.

The bankruptcy ruling places the Company under the supervision
of court-appointed trustee, Berta Liliana Kraves. The trustee
will verify creditors' proofs of claim until Sep. 14, 2005. The
validated claims will be presented in court as individual
reports on Oct. 27, 2005.

Ms. Kraves will also submit a general report, containing a
summary of the Company's financial status as well as relevant
events pertaining to the bankruptcy, Dec. 9, 2005.

The bankruptcy process will end with the disposal of the
Company's assets in favor of its creditors.

CONTACT: Farmore S.R.L.
         Paso 667
         Buenos Aires

         Ms. Berta Liliana Kraves
         Tucuman 1438
         Buenos Aires

INDUSTRIAS METALURGICAS: Bankruptcy Converted to Reorganization
Industrias Metalurgicas de Cuyo S.A. will proceed with
reorganization after a Buenos Aires Court converted the
Company's ongoing bankruptcy case into a "concurso preventivo",
states Infobae. Under Insolvency protection, the Company will be
able to draft a proposal designed to settle its debts with
creditors. The reorganization also prevents an outright

Ms. Claudia Alicia Raso, the court-appointed trustee, will
verify creditors' proofs of claim until Aug. 9, 2005. Creditors
with unverified claims cannot participate in the Company's
settlement plan.

Ms. Raso is will prepare the individual and general reports as
required by the court. The individual reports will be submitted
on Oct. 11, 2005, to be followed by the general report on March
7, 2006.

An informative assembly, the last phase of the reorganization,
is set on June 27, 2006. During the assembly the Company will
present the completed settlement proposal for the creditors'

CONTACT:  Ms. Claudia Alicia Raso, Trustee
          Alberdi 158

MAQUIRENTAL S.A.: Bankruptcy Initiated After Court Order
Maquirental S.A. enters bankruptcy protection after Court No. 4
of Buenos Aires' civil and commercial tribunal, with the
assistance of Clerk No. 7, 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

Infobae reports that the court selected Roberto O. Hermida as
trustee. Mr. Hermida will be verifying creditors' proofs of
claim until the end of the verification phase on Aug. 23, 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. Dates for the submission of these reports
are yet to be disclosed.

CONTACT: Mr. Roberto O. Hermida, Trustee
         Tucuman 1668
         Buenos Aires

SALUD SERVICIOS: Individual Reports to be Submitted August 10
The individual reports on the creditors' validated claims
against Salud Servicios Sociales S.R.L. will be on Aug. 10,
2005, Infobae reports. Ms. Monica Cristina Di Iorio, the trustee
selected by the court, had stopped accepting claims on June 30,

After submitting the individual reports, the trustee will work
on the general report, containing a summary of the Company's
financial status as well as relevant events pertaining to the
bankruptcy, and submit it to court on Sep. 26, 2005.

Fosario-based Salud Servicios Sociales S.R.L. will begin
liquidating its assets following the pronouncement of the city's
civil and commercial Court No. 12 that the Company is bankrupt.

The bankruptcy process will end with the disposal of the
Company's assets in favor of its creditors.

CONTACT: Ms. Monica Cristina Di Iorio, Trustee
         Corrientes 931
         Rosario (Santa Fe)

SANATORIAL EXPRESS: Court Mandates Liquidation Necessary
Court No. 2 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Sanatorial Express S.A. 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 Miryam
Lewenbaum, the court-appointed trustee.

Ms. Lewenbaum will verify creditors' proofs of claim until Sep.
19, 2005. The verified claims will serve as basis for the
individual reports to be submitted in court on Nov. 1, 2005. The
submission of the general report follows on Dec. 14, 2005.

Clerk No. 3 assists the court on this case, which will end with
the disposal of the Company's assets in favor of its creditors.

CONTACT: Sanatorial Express S.A.
         Viamonte 1336
         Buenos Aires

         Ms. Miryam Lewenbaum, Trustee
         Montevideo 666
         Buenos Aires

TELEFONICA DE ARGENTINA: Board Approves June 30 Financial Data
Telefonica de Argentina S.A. announced that in the relevant
meeting held on July 26 the Company's Board of Directors
approved in advance certain non-consolidated and non-audited
summarized accounting data included in the following brief
descriptions of the statement of assets and liabilities,
statement of income, and statement of changes in shareholders'
equity at June 30, 2005, and corresponding to the 6-month period
immediately before, in order to be added to the accounting
records of the Spanish indirect controlling company of the
Company, Telefonica S.A., organized in Spain.

Amounts are denominated in million pesos in accordance with the
rules approved by the Comision Nacional de Valores (National
Securities and Exchange Commission).

By August 10, 2005, the Company's Board of Directors will
approve the full Financial Statements at June 30, 2005, and
corresponding to the 6-month period immediately before, in
accordance with section 63 of the Buenos Aires Stock Exchange
Regulations and section 1, chapter XXIII of Resolution No.
368/01 of the National Securities and Exchange Commission.

Therefore, the final consolidated and non-consolidated results
and the Company's balance sheet will include the relevant
subsequent events until the date of approval of such full
statements. The Company undertakes no liability whatsoever to
update the data contained in this notice due to any event taking
place after the date hereof and before the approval of the
accounting data as per the provisions set forth in the preceding

To see non-consolidated and non-audited summarized statement of
assets & liabilities and income:

          Tucuman 1, 18th Floor, 1049
          Buenos Aires, Argentina
          Phone: (212) 688-6840
          Home Page:

TRANSPORTES SAN MARTIN: Trustee to Submit Individual Reports
Ms. Doris Marina Calla, the trustee for the Transportes San
Martin S.R.L. bankruptcy case, will submit the individual
reports on to court on Sep. 2, 2005.

These reports, according to Infobae, contain the forwarded
claims of creditors of the Company. Submission of the claims
ended on July 21, 2005.

Transportes San Martin S.R.L. was declared bankrupt after the
Company defaulted on its debt payments.

CONTACT: Transportes San Martin S.R.L.
         Chaco 970
         Ciudad de Cordoba (Cordoba)

         Ms. Doris Marina Calla, Trustee
         9 de Julio 883
         Torre III
         Ciudad de Cordoba (Cordoba)


OLYMPUS UNITED: Central Bank Takes Over Management, Control
The Central Bank of Barbados seized the management and control
of an Olympus United Bank and Trust SCC on July 19 with a view
to closing the offshore bank down. Confirming the seizure on
July 28, Central Bank Governor Dr. Marion Williams said the
action emanated from the failure of the licensee to comply with
provisions of the International Financial Services Act.

Olympus is a subsidiary of the Canadian hedge fund company,
Norshield Financial Group, which was placed in receivership in
June on the orders of the Ontario Securities Commission. The
Canadian parent is currently under investigation over the
disappearance of US$130 million.

Observers have suggested that the incident is an isolated one,
and is unlikely to harm Barbados' reputation internationally.


AGUAS DEL ILLIMANI: To Continue Running Water Concession
Aguas del Illimani (AISA), a subsidiary of French group Suez,
agreed not to give up its concession to operate the Bolivian
capital La Paz water services. At least, not until the
government secures the funds to buy out 100% of the
shareholding, Business News Americas reports, citing AISA
spokesperson Tania Jaldin.

Basic services deputy minister Eduardo Rojas said the state will
be making a request to the World Bank and the Andean Development
Corporation (CAF) for a loan to buy out AISA.

AISA has been in handover talks with sector regulator Sisab and
basic services ministry (VSB) officials after the government
rescinded its 30-year concession due to resident protests over
AISA's supposed poor service.

The deadline for AISA to hand back the concession was July 29.
However, AISA paid a US$3 million guarantee bond last week and
US$5 million bond on July 29, keeping it within the terms of its

Meanwhile, the stumbling block of a government-ordered audit
going back to 1997 to determine the levels of investment
actually carried out by the concessionaire under the terms of
its contract is still being negotiated, Jaldin said.

A three-man transition team will be appointed to audit AISA's
books and inspect the condition of the potable water and
sanitation infrastructure and service to determine levels of

"It cannot be overlooked that in the seven years of the
concession AISA introduced technology, as well as commercial and
inventory systems which we will have to learn how to operate in
the shortest time possible," Sisab director Alvaro Camacho said.

The government has been insisting that the audit cover the whole
period of the concession because it is important to establish
the source of funds used in infrastructure investment to ensure
they did not come from water charges revenues.


BANCO DO BRASIL: Fitch Affirms Existing Ratings
Fitch Ratings, the international rating agency, affirmed Friday
Banco do Brasil S.A.'s (Banco do Brasil) long-term foreign and
local currency ratings at 'BB-' and 'BB', respectively; the
short-term foreign and local currency ratings at 'B'; the
individual rating at 'C/D'; and the support rating at '4'. At
the same time, Fitch affirms the long and short-term national
ratings of, respectively, 'AA(bra)' and 'F1+(bra)'. The Outlook
of the long-term ratings remains Stable.

Banco do Brasil's foreign currency ratings are at the sovereign
ceiling, while the long-term local currency rating is above the
sovereign, reflecting the bank's status in the Brazilian
financial system, its increasing commercial and administrative
independence of the federal government in recent years, and the
market's perception of Banco do Brasil as a safe heaven in times
of stress. The national ratings on Banco do Brasil also reflect
the bank's ownership structure, while the individual rating
mirrors its market leadership in several sectors and the
continuous improvement of its financial profile since June 2001,
with the bank becoming more competitive, even in comparison with
large private banks. The rating also reflects the low quality of
its capital due to the high (though declining) level of tax
credits, its increased volume of subordinated debt, and the
consequent low volume of Tier I capital. In addition, it
reflects Fitch's expectations regarding the deferred assets
reduction and the effect of this on future profits.

Fitch will publish a full analytical report on Banco do Brasil

BANCO RURAL: Fitch Downgrades Ratings; Issues Negative Watch
Fitch Ratings, the international rating agency, downgraded
Friday the long- and short-term national ratings of Banco Rural
S.A. (Rural) to 'BB-(bra)' from 'BBB- (bra)' and 'B(bra)' from
'F3(bra)', respectively. At the same time, all ratings remain on
Negative Watch, and Fitch has affirmed the support rating of

This rating action reflects changes in the risk profile of
Rural, given the impact on its funding and operations, due to
its image deterioration.

Founded in 1948, Rural is a multiple bank controlled by five
members of the Rabello family (84.7% of the voting stock), with
a tradition in lending to small- and medium-sized companies.
Headquartered in Minas Gerais, it had 97 domestic outlets (75
branches) at March 2005 and a solid overseas presence,
consisting of seven banking entities, mostly focused on foreign
trade finance.

CSN: Moody's Upgrades Certain Ratings; Rating Outlook Positive
Approximately USD 1.6 billion in Debt Securities Affected

Moody's Investors Service upgraded the foreign currency note
ratings of Companhia Siderurgica Nacional (CSN) and CSN backed
foreign currency notes to Ba3 from B1 and affirmed CSN Iron
S.A.'s corporate family rating (previously known as the senior
implied) at B1. The rating outlook is positive. In related
rating actions, Moody's upgraded the global local currency
rating of CSN to Ba2 from Ba3, and the National Scale Rating to from The outlook for the global local currency and
National Scale ratings is stable.

The upgrade in the global local currency rating reflects CSN's
strengthened operating profile as evidenced by improved debt
coverage ratios, moderation in leverage and ability to generate
free cash flow (operating cash flow less dividends less capital
expenditures) through the steel cycle. Favorable considerations
in the rating are CSN's efficient and modern operations and
market diversity as well as its captive raw material sources for
key materials other than coal. However, the rating reflects the
company's high payout level to shareholders relative to its
earnings, cash flow generation and strategic investment

The Ba3 foreign currency note ratings, a function of CSN's Ba2
global local currency rating, reflect the company's operating
strengths and competitive position in the Brazilian steel
market, but also incorporates the element of convertibility
risk, or the likelihood that the Brazilian government might
declare a general debt moratorium to counter a foreign currency
crisis. The foreign currency bond rating considers the
probability of a sovereign foreign currency default implied by
the government's B1 foreign currency bond rating and the
likelihood that, in the event of such a default, the government
would impose a general foreign currency payments moratorium.
Considered in CSN's Ba3 foreign currency bond rating is the
possibility that CSN, as a key steel producer in Brazil's
markets, with a good position in the export markets, might be
exempt from a debt moratorium, if such were to be imposed.

The stable outlook reflects Moody's expectation that CSN will
continue to evidence solid earnings and cash flow generation
representative of its position within the Brazilian steel
sector, the diversity of its end market sales and its ability to
move product in the export markets. The outlook also
acknowledges CSN's substantive cash position and anticipates
that the company will continue to maintain a liquidity position
through its cash and liquid investment position that together
with cash flow generation will allow the company to meet short-
term obligations and weather volatility in its local markets.
The outlook also anticipates that despite softening in the steel
industry globally and price contraction, the overall market
fundamentals remain acceptable and prices will continue to
provide for reasonable results for low cost producers such as
CSN. The outlook or rating could improve should CSN reduce debt
in absolute terms in order to be better positioned for a
cyclical downturn in the steel industry. A resumption of debt
increases to fund major acquisitions or capital investments, or
a sustained increase in the cost base, which would lead to
margin strain in a cyclical downturn could negatively impact the

The positive outlook for the foreign currency note ratings and
for the corporate family rating at CSN Iron S.A. is a reflection
of the positive outlook on Brazil's B1 long term currency
ceiling for bonds and notes.

Improvement in metrics and leverage are earnings driven,
reflective of stronger world steel prices in 2004 and continued
good performance in 2005 despite softening in global steel
prices. In 2004, CSN reduced its export sales to focus on the
higher profit domestic market and in 2005 plans to have
approximately 75% of shipments sold in the domestic market.
While the company remains self sufficient in a number of key raw
materials such as iron ore, increased coke and coal prices have
impacted margins, although the gross profit margin remained
healthy at 48% for the quarter ended March 31, 2005 and the
magnitude of year on year changes is not expected to be repeated
in 2005. Moody's views current metrics as more representative of
the peak of the cycle and we would expect some contraction in
the level of earnings generated as prices retreat and costs
continue at higher than historical levels. Free cash flow
generated in the first quarter of 2005 and net debt increases of
approximately BRL 1.0 billion contributed to a cash and cash
equivalent position of BRL 6.1 billion. Moody's notes however
that subsequent to quarter end, CSN paid a total of BRL 2.2
billion in dividends and interest on shareholders equity.

Ratings upgraded are:

- Companhia Siderugica Nacional: Global Local Currency rating to
Ba2 from Ba3, National Scale Rating to from on
Brazilian debentures, foreign currency rating to Ba3 from B1 on
USD 200 million notes due 2008

- CSN Iron S.A.: Foreign Currency rating on 9.125% guaranteed
bonds due June 2007 to Ba3 from B1.

- CSN Islands VIII Corp.: Foreign currency rating on 9.750%
guaranteed notes due December 2013 to Ba3 from B1.

- CSN Islands IX Corp.: Foreign currency rating on 10%
guaranteed notes due January 2015 to Ba3 from B1.

Ratings affirmed are:

- CSN Iron S.A.: B1 Corporate Family Rating (previously called
the Senior Implied Rating).

Headquartered in Rio de Janeiro, Brazil, CSN had consolidated
net revenues of BRL 9.8 billion in 2004

EMBRATEL PARTICIPACOES: Announces Results of Shareholder Meeting
The shareholders of Embratel Participacoes S.A. approved the
amendment of the Company's Article 5 of By-Laws in an
extraordinary general meeting held on July 14, 2005.

JULY 14, 2005, AT 3 P.M.

1. DATE, TIME AND PLACE: July 14, 2005, at 3 p.m., in the
Company's Registered Offices, located at Rua Regente Feijo, No.
166, suite 1687-B, in the downtown (Centro) district, City and
State of Rio de Janeiro.

2. CALL TO MEETING: Notices published in the manner provided for
in Article 124 of Brazilian Corporation Law (No. 6404/76), in
Gazeta Mercantil and Rio de Janeiro Official State Gazette
editions dated on days 28, 29 and 30 of June 2005. The cited
notices were made available to interested parties on the table,
with reading and transcription thereof having been waived.

representing more than 90% (ninety per cent) of the voting
capital were present, according to the registrations and
signatures contained in the Company's Shareholders Attendance
Book. Mr. Isaac Berensztejn was also present in his capacity of
representative of the Company's administration.

4. TABLE: In the manner provided for in Article 13 of the
Company's By-Laws, the proceedings were presided over by the
Chairman of the Board of Directors, Mr. Carlos Henrique Moreira,
who called upon Dr. Antonio Oscar de Carvalho Petersen Filho to
serve as Secretary.

5. RESOLUTIONS: 5.1. Unanimous approval was granted by the
shareholders present for these Minutes to be drawn up in summary
form and that publication hereof be made with omission of the
signatures of the shareholders present, as allowed,
respectively, by paragraphs SS 1 and 2 of Art. 130 of Brazilian
Corporation Law (No. 6404/76). 5.2. Formal reading of call
notice was waived by shareholders present, and such shareholders
resolve upon the items of the Agenda as follows:

(i) Approve by majority of shareholders present the amendment of
Company By-Laws aiming the following:

(I) Amend the Article 5 of Company By-Laws, reflecting the
increase of Company's capital approved by Board of Directors
within the authorized capital limit on May 23, 2005, which shall
be effective with the following wording:

"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

(II) Cause the Fiscal Council to act as Company's Audit
Committee for the purposes of provisions provided for in
Sarbanes-Oxley Act of 2002: amend the item XV of Article 17, add
a Sole Paragraph of Article 30 and Article 31 and respective
items; amend the  3 of Article 31; change caput,  1 and 2 of
Article 32, provisions of which shall be effective with the
following wording:

"Art. 17 - Apart from the tasks assigned to it under the law,
and those provided for in Article 6 of these By-Laws, it is
incumbent on the Board of Directors

XV - to elect and remove the Company's independent auditors;
regarding for such purpose, among others, under the
recommendation of Fiscal Council;

"Art. 30 - The Fiscal Council will act on a permanent basis.
Sole Paragraph. For the full performance of their
responsibilities, notably the Audit Committee duty, the
requirements provided for in applicable law shall be fulfilled,
the provision of these By-Laws and Fiscal Council Internal
Ruling approved by the Annual Ordinary General Meeting."

"Art. 31 - Without prejudice to other responsibilities provided
for in Brazilian law, the Fiscal Council shall have the
following responsibilities:

I. Inspect actions of managers and examine the performance of
their legal and statutory responsibilities;

II. Consider upon the management annual report, and include in
their own opinion the additional information deemed as required
or useful to resolve on general meeting;

III. Recommend and assist the Board of Directors in proceedings
of hiring, assessment of compensation and removal of independent
auditors for the Company;

IV. Oversee and evaluate the proceeds of such independent
auditors and assist on the solution of possible controversies
between the management and an independent auditor as regard of
financial statements of Company;

V. Review from time to time Company policies concerning the
provision of audit and non-audit services provided by
independent auditors and the respective compensation;

VI. Consider upon proposals of management bodies to be submitted
to General Meeting, in respect of any change on the capital
stock, issuance of debentures or subscription bonus, investment
plans or capital budgets, dividend payment, conversion,
amalgamation, merger or split-off;

VII. Review from time to time the success of risk management
processes and internal controls of Company in order to monitor
the performance of, among others, (i) legal provisions affecting
the submittal of financial reports; and (ii) statutory

VIII. Prescribe proceedings in order to hear, process and assess
reports of fraud, anonymously or not, related to accounting
matters, internal controls and audit of the Company;

IX. Report to management bodies and, if such bodies do not take
required needs for the protection of Company interests, to the
general meeting, errors, frauds or crimes found and suggest
useful actions to the Company;

X. Call the Annual General Meeting, if management bodies elapse
for more than a month of such call, and call the Extraordinary
General Meeting, upon the occurrence of serious or expedient
matters, including the agenda of matters deemed required on such

XI. Analyze at least on a third-month basis, the balance sheet
and other financial statements prepared from time to time by the

XII. Review the financial statements as of year ended and place
comments on them;

XIII. Perform such duties, during winding-up, considering
special provisions regulating thereof.

Sole Paragraph. For the performance of their duties, Fiscal
Council may request to Company management the hiring of
auditors, attorneys, consultants and accountants, and such
respective fees shall be fixed in reasonable conditions and
within the limits of a specific budget, which shall be fixed as
proposed by Company management in accordance with terms of Art.
43 herein."

"Art. 31 - The Fiscal Council shall meet whenever necessary,
however, not less than 04 (four) times a year, and such meetings
shall meet the cycle of submittal of financial reports of

S 1 - Apart from the forms legally provided for, the meetings of
Fiscal Council shall be called, at any time, by the Chairman of
Fiscal Council or by 02 (two) members, by the Chairman of Board
of Directors, by the Chairman of the Company, or always when
required by independent and internal auditors.

"Art. 32 - The Fiscal Council will be formed by at least 3
(three) and at most 5 (five) members, and an equal number of
alternates, elected and removed at any time by the General
Meeting, with due observance of the rules of Paragraph 4, in
Article 161 of Law No. 6404/76.

S 3 - The members of the Fiscal Council, in their first meeting,
shall elect their Chairman and Secretary."

(III) In order to ensure the hiring of advisors and consultants
who might be requested by Fiscal Council, in the performance of
their duties, and the approval of a specific budget for that
purpose: add the item II of Article 17; add the item (v) on  1
of Article 29; and add Article 43, and such provisions shall be
effective with the following wording:

"Art. 17 - Apart from the tasks assigned to it under the law,
and those provided for in Article 6 of these By-Laws, it is
incumbent on the Board of Directors:

II. to approve an annual budget for funds required to pay
independent auditors, lawyers third parties, accountants or any
other consultant whose hiring might be requested by Fiscal
Council of Company;

"Art. 29 - It is incumbent on the members of the Executive Board
of Officers, observing the need for prior authorization of the
Board of Directors in the cases stipulated in these By-Laws, to
represent the Company as described in the following paragraphs.

S 1 - It is incumbent on the President:

v. - to hire services provided for in Sole Paragraph of Article
31, upon the request of Fiscal Council."

"Art. 43 - In every fiscal year, the management of Company,
shall submit to Board of Directors a annual budget proposal
including the forecast of funds required to pay independent
auditors, lawyers third parties, accountants or any other
consultant whose hiring might be requested by Fiscal Council of

(IV) As a result of proposed amendments, shareholders approved
the reorganization of articles, respective items and the
amendment of references of By-Laws of Company.

(ii) Shareholders have approved, by majority of presents, the
restatement of By-Laws of Company attached as APPENDIX I.

(iii) Shareholders have approved, by unanimous vote of presents,
the Fiscal Council Internal Ruling of Company attached as

(iv) Thus, the adjustment on compensation of members of Fiscal
Council of Company was approved by unanimous vote of presents,
as approved on the Annual General Meeting held on April 29,
2005, and the monthly individual amount was fixed on R$8,000.00
(eight thousand reais), and the compulsory refund of transport
and accommodation expenses required to the performance of their
duties, all of which in accordance with 3 of Article 162 of Law
No. 6404/76.

6. CLARIFICATIONS: Upon the request of shareholder Jos‚ de
Oliveira Teixeira, it is drawn up his commended reference to the
performance of actual management of Company, and his
unrestricted approval of all amendments and changes proposed by

In the absence of any other matters to be discussed, the
proceedings were adjourned for the time required to transcribe
these minutes. When the session was reopened, minutes were read,
agreed upon and signed by all present members. SIGNATURES:
Carlos Henrique Moreira -Chairman, Antonio Oscar de Carvalho
Petersen Filho - Secretary, Isaac Berensztejn -Economic-
Financial Director (Chief Financial Officer - CFO) and Investor
Relations Officer. Shareholders: Startel Participacoes Ltda.,
New Startel Participacoes Ltda., Telmex Solutions
Telecomunicacoes Ltda., The Master Trust Bank of Japan Ltd RE:
MTBC400035147, The California State Teachers Retirement System,
State Street Emerging Markets, Norges Bank, Jose Teixeira de
Oliveira, Gilberto Souza Esmeraldo and Paulo Andre Bodin de

CONTACT: EMT - Embratel Participacoes S.A.
               Rua Regenta Feijo
               166 Sala 1687-B Centro
               Rio de Janeiro, 20060-060
               Phone: 5521-519-6474

LIGHT SERVICOS: French Parent Plans Partner Search
French power company EdF may take in a partner who will invest
in its Brazilian electricity distributor Light Servicos de
Electricidade SA, reports Business News Americas.

"We have restructured the debt and started improving operations,
now we want a partner that will put money into the company and
take part in the company's management," Light CEO Jean-Pierre
Bel said. "We haven't started this process yet and could even
sell control, everything is possible."

EdF, which holds 95% of Light, prefers to have a local partner
that knows the Brazilian market, the executive said.

Light recently signed a US$742-million debt restructuring
agreement with 12 creditor banks and obtained a US$400-million
capital injection from EDF.

EDF's capital injection paves the way for a BRL727-million
(US$300 million) loan from national development bank BNDES to
help Light pay down BRL320 million in debts with federal power
holding company Eletrobras and bolster its cash flow.

Besides the capitalization from EdF, BNDES' conditions for the
loan are an investment program to reduce losses and the listing
of Light shares on the Novo Mercado, the highest corporate
responsibility level of the Sao Paulo stock exchange Bovespa.
This happened on Thursday.

Meanwhile, Light plans to invest some US$136 million by the end
of the year, a significant increase from 2004's US$105 million
and US$91 million in 2003. Through the end of 2007 Light plans
to invest a total of BRL1 billion (US$414 million), CFO Paulo
Pinto said.

A third of the investment will go to reducing commercial losses
and fighting power theft, another third in maintenance and
improvements to the network and the rest into expansion. The
objective is to increase the number of clients by 50,000-80,000
a day.

          Avenida Marechal Floriano, 168
          20080-002 Rio de Janeiro, Brazil
          Phone: +55-21-2211-2794
          Fax:   +55-21-2211-2993
          Home Page:
          Bo Gosta Kallstrand, Chairman
          Michel Gaillard, President and CEO
          Joel Nicolas, Executive Director, Operation
          Paulo Roberto Ribeiro Pinto, Executive Director,
                                 Investor Relations and CFO

TCP: Board Approves Capital Increase
Telesp Celular Participacoes S.A. ("TCP"), (BOVESPA: TSPP3
(Common), TSPP4 (Preferred), NYSE: TCP), announced Friday that,
at a meeting of the Board of Directors held on this date, an
increase of capital by private subscription was assimilated for
capitalization of the premium in the amount of R$242,595,157.06,
upon issue of 29,298,932 new registered, book-entry common
shares, with no face value, subscribed by the shareholders
during the period for exercise of the preemptive right which
started on June 29, 2005 and ended on July 28, 2005.

To see table, click

CONTACT: Telesp Celular Participacoes S.A.
         VIVO - Investor Relations
         Phone: 55 11 5105-1172


AHMSA: Coal, Iron Ore Mines Boost 2Q Bottom Line
Steelmaker AHMSA's (Altos Hornos de Mexico) iron ore and coal
mining operations pushed the Company's net profit 8.7% higher
year-on-year to MXN325 million (US$31 million) in the second
quarter of 2005. Citing an AHMSA filing with the Mexico City's
bourse, Business News Americas reports that operating profit
during the quarter grew 19% to MXN1.04 billion. EBITDA soared
15.9% to US$146 million and sales jumped 18.6% to MXN5.78

According to Business News Americas, AHMSA's coal and iron ore
mines helped company margins as the cost of steel inputs grew
and steel prices dropped on average 18% compared to past

AHMSA, based in the northern city of Monclova, is Mexico's
largest integrated steel maker with its own iron and coal mining

         International Operations
         Prolongacion Juarez s/n
         Monclova, Coah., 25770
         Phone: + 52 (866) 649 34 00
         Fax: + 52 (866) 649 23 10
         Web site:

CYDSA: Ends 1H05 With MXN18 Million Net Profit
Industrial group Cydsa moved back into profitable territory in
the first half of the year, posting an MXN18-million (US$1.7
million) net profit, reports Business News Americas. Comparably,
the Company ended the first half of 2004 with a net loss of
MXN939 million.

Total sales in the Jan-June 2005 period climbed 1.5% year-on-
year to MXN3.45 billion. Gross profits reached MXN611 million in
the period, down 6.9% compared to the first half of 2004. Cydsa
attributed this dip to the high price of petrochemical materials
and increases in energy prices, which have affected some areas
of business.

EBITDA was MXN228 million in the first half of 2005, a year-on-
year increase of 3.9%. Operating profit rose 129% to MXN48
million in the same period. Operating costs were reduced by
11.3% to MXN563 million in 2Q05, a result of the firm's
continued cost-cutting measures.

Cydsa produces textiles, industrial packaging, chemicals,
petrochemicals and plastics, and offers wastewater and
environmental management services.

          Jose de Jesus Montemayor Castillo
          Chief Financial Officer

EMPRESAS ICA: S&P Ups Ratings to 'B', Off Watch; Outlook Stable
Standard & Poor's Ratings Services has revised its long-term
corporate credit rating on Empresas ICA S.A. de C.V. (ICA) to
'B' from 'B-'. The ratings have been removed from CreditWatch,
where they were placed with positive implications on July 22,
2005. Standard & Poor's also raised its long-term national scale
rating on ICA to 'mxBBB-' from 'mxBB+'. The outlook for all
ratings is stable.

The rating action follows a review of ICA's operating and
financial prospects by Standard & Poor's. The rating action also
follows the recent approval by ICA's shareholders of a $230
million capital increase and the payment of the group's
corporate debt, which totaled around $44 million, in May 2005.

"The ratings assigned to ICA consider the company's position as
the largest engineering, construction, and procurement concern
in Mexico," said Standard & Poor's credit analyst Jose
Coballasi. The ratings also reflect a more favorable operating
and financial performance and the improvements in ICA's capital
structure and maturity schedule. We expect that key financial
measures and liquidity will remain relatively weak as a result
of the group's investment program and working capital needs,
particularly in El Cajon. The ratings are also constrained by
the risk of operating losses and swings in working capital
associated with cost overruns that have hurt the company's
financial performance and liquidity in the past. The ratings
also reflect the inherent cyclicality of the construction
industry and the company's dependence on government spending in
infrastructure to sustain its backlog.

ICA is the largest engineering, procurement, and construction
company in Mexico. The company is engaged in a full range of
construction and related activities, involving the construction
of infrastructure facilities, as well as industrial, urban, and
housing construction. In addition, the company is engaged in the
development and marketing of affordable housing and real estate;
the construction, maintenance, and operation of airports,
highways, bridges, and tunnels; and the management and operation
of water supply systems and solid waste disposal systems under
concessions granted by the governmental authorities.

We believe that, in addition to the presence of larger projects
that allow the group to take advantage of economies of scale,
the steady improvement in ICA's financial performance also
reflects its efforts to improve profitability through
significant workforce reductions, more advanced risk management
systems, and investments in IT. Nevertheless, competition,
mainly from foreign firms; the increased use of fixed price
contracts, which represent the bulk of ICA's backlog; and thin
margins, relative to other issuers, continue to pose important
challenges for the company. Cost overruns, write-offs,
provisions, and a number of extraordinary charges underscore the
difficulties experienced by ICA in the past. The risks
associated with the inherent cyclicality of the construction
business and the dependence on government spending are evident
in the backlog for Mexico's electric utilities and national oil

The ratings and stable outlook are predicated on the expectation
that ICA will complete the proposed equity issuance and will
move forward with its investment program. The ratings also
anticipate that the group's investment program will be paired
down if the equity issuance falls short of the proposed amount.
The stable outlook also reflects our expectations that ICA's
leverage will remain relatively high until 2007, when the El
Cajon project will be delivered. A positive rating action would
have to be preceded by continued improvement in ICA's financial
and operating performance. We anticipate that during the next
two years, ICA's key financial measures will be comparable to
those posted by other issuers in the same rating category.

Primary Credit Analyst: Jose Coballasi, Mexico City (52)55-5081-

Secondary Credit Analyst: Raul Marquez, Mexico City (52) 55-

EMPRESAS ICA: Considers Exercising Option to Buy GACN Stake
Engineering and construction concern Empresas ICA SA plans to
exercise an option to buy a 36% stake in airport operator Grupo
Aeroportuario Centro Norte (GACN) valued at US$203 million,
reports Reuters.

"The option for 36% of GACN for $203 million will be financed
with debt -- we already have letters of commitment -- and we are
also negotiating with several investors," said Chief financial
officer Jose Luis Guerrero. "It will be (financed with) 50%
equity and 50% debt," he added.

ICA hopes to complete the deal before the end of the year.

GACN, which operates 13 airports across northern and central
Mexico, is majority controlled by the government.

ICA is a partner with French firms Vinci and Aeropuertos de
Paris in Servicios de Tecnologia Aeroportuaria (SETA), a
consortium which already has a 15% stake in GACN.

ICA is also looking to buy the 37.25% that Vinci has in SETA for
US$38 million.

CONTACT: Empresas ICA Sociedad Controladora S.A. de C.V.
         Col. Escandon Del Migual Hidalgo
         Mexico City, 11800
         Phone: 525-272-9991

GRUPO ELEKTRA: BNY to Terminate GDSs Program August 1
Grupo Elektra S.A. de C.V. (BMV: ELEKTRA*; NYSE: EKT; Latibex:
XEKT), Latin America's leading specialty retailer, consumer
finance and banking and financial services company announced
Friday that as it was previously informed, on August 1, the Bank
of New York (BoNY), at the Company's instruction, will terminate
the Company's Global Depositary Shares (GDSs) program and, as a
result, the New York Stock Exchange (NYSE) will suspend trading
of its GDS. As of such date, the Company's GDSs will no longer
trade on the NYSE.

As it was previously announced, at an extraordinary
shareholders' meeting held on June 1, 2005, 91.23% of Grupo
Elektra's shareholders approved the termination of the GDS
program, after an analysis and discussion of the costs and
benefits of continuing to be listed in the U.S. capital markets.

As it has been detailed, GDS holders will have 60 days to
exchange their GDSs for common shares traded on the Mexican
Stock Market (BMV). Upon the expiration of the 60-day period,
BoNY will be allowed to sell the common shares underlying the
GDSs that were not surrendered and distribute the proceeds of
such sale to holders.


     Esteban Galindez, CFA,
     Director of Finance and I.R.
     Grupo Elektra S.A. de C.V.
     Tel. +52 (55) 1720-7819
     Fax. +52 (55) 1720-7822

     Bruno Rangel
     Director of Investor Relations
     Grupo Salinas
     Tel. +52 (55) 1720 9167
     Fax +52 (55) 1720 0831

SATMEX: Settles Conflict With Creditors Regarding Ch. 11 Filing
The ad hoc committees of holders of, respectively, the Senior
Secured Floating Rate Notes due 2004 and the 10 - 1/8% Senior
Notes due 2004, which are made up of U.S.-based creditors (the
"Creditors") holding collectively in excess of US$385 million of
the outstanding debt of Satelites Mexicanos, S.A. de C.V.
("Satmex" or the "Company") announced Friday at a hearing held
before the U.S. Bankruptcy Court for the Southern District of
New York that they have reached a settlement with the Company
regarding the Creditors' involuntary Chapter 11 petition and
Satmex's motion to dismiss the petition on jurisdictional
grounds. As part of the settlement that was reached, Satmex has
committed to present a restructuring proposal to the Creditors
by October 31, 2005.

On May 25, 2005, the Creditors filed an involuntary Chapter 11
petition against Satmex with the hopes of implementing a
proposed restructuring agreement that had the support of
creditors holding nearly three-quarters of the outstanding debt
of Satmex and that included sufficient debtor-in-possession
(DIP) financing to fund the launch of the Satmex 6 satellite.
The Creditors believed that a debt restructuring through a
Chapter 11 plan of reorganization could be achieved within 90
days and would substantially improve the Company's capital
structure, allowing it to better serve the needs of its
customers in Mexico, the United States, and throughout Latin

On June 29, 2005, Satmex filed a Mexican bankruptcy proceeding,
known as a Concurso Mercantil, under the laws of Mexico, and
later moved to dismiss the involuntary Chapter 11 petition in
the U.S.

Under the agreement in principle reached between the parties,
Satmex will file a petition under section 304 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York. Upon the commencement of a 304 proceeding,
the Creditors will withdraw their involuntary petition.

Section 304 of the Bankruptcy Code allows a foreign debtor (such
as Satmex) to commence a proceeding that is ancillary (or
related) to a foreign proceeding (such as Satmex's Concurso
Mercantil). Section 304 also allows a U.S. Bankruptcy Court to
protect assets or property of a debtor that are in the U.S. by
issuing an injunction preventing any action against that

Under the terms of the agreement in principle announced Friday,
the Creditors have reserved the right to make a motion to the
U.S. Bankruptcy Court seeking the dismissal of the 304 petition
or the termination of any injunction ordered by the Court upon
the occurrence of certain conditions. These conditions include
any attempt to revoke or terminate Satmex's concessions, and any
failure of Satmex to present a restructuring proposal to the
Creditors by October 31, 2005. The Creditors also have the right
to come back to the U.S. Bankruptcy Court seeking relief if
Satmex 6 is not launched by June 30, 2006.

The Creditors are pleased that the parties reached this
consensual resolution of the involuntary Chapter 11 petition.
They are also pleased that the U.S. Bankruptcy Court will have a
role in the restructuring of Satmex, providing a forum for the
Creditors to seek relief if there is any misconduct or other
improper activities in connection with the Concurso Mercantil
proceedings. Among other things, section 304 provides that U.S.
Bankruptcy Courts should be "guided by what will best assure an
economical and expeditious administration of [the debtor's]
estate, consistent with ... protection of claim holders in the
United States against prejudice and inconvenience in the
processing of claims in such foreign proceeding." 11 U.S.C.
section 304 (c)(2).

Nevertheless, the Creditors echo the sentiments of presiding
U.S. Bankruptcy Court Judge Robert Drain, who said at the
hearing Friday, "It is my hope, that I hold very strongly, that
it will proceed smoothly now and all of the key parties will be
able to work together to facilitate Satmex's restructuring." By
removing procedural question-marks, the Creditors are hopeful
that Satmex, its equity holders, and especially the Mexican
Government are now willing to engage in good faith restructuring
talks, which were terminated by the Company after an agreement-
in-principle had been reached with the Creditors in December
2004. While the Creditors continue to believe that a Chapter 11
restructuring in the U.S. would have been the best process for
restructuring the Company's debt, the Creditors are prepared to
engage in a Mexican proceeding if that is what is required to
achieve a restructuring of Satmex in a timely manner.

At the conclusion of the hearing Friday, Judge Drain commented
on the Creditors' concerns about the Mexican restructuring
process and the potential for misconduct or inappropriate
behavior, "I recognize the fears the bondholders have. But I
have confidence and hope those fears will be unfounded." The
Creditors also echo these sentiments from Judge Drain.

The ad hoc committees of holders of, respectively, the Senior
Secured Floating Rate Notes due 2004 and the 10 - 1/8% Senior
Notes due 2004, are represented, respectively, by Wilmer Cutler
Pickering Hale and Dorr LLP and Akin Gump Strauss Hauer & Feld

Evercore Partners is the financial advisor to the Senior Secured
Floating Rate Noteholders. Chanin Capital Partners is the
financial advisor to the 10 - 1/8% Senior Noteholders.

         Mike Sitrick, +1-310-788-2850
         Tom Vogel +1-212-573-6100
         Steven Goldberg, +1-212-573-6100
         Jeff Lloyd, +1-212-573-6100

T R I N I D A D   &   T O B A G O

BWIA: Airline's Future Awaits Cabinet Decisions
Trade & Industry Minister Kenneth Valley informed that the
Cabinet sub-committee on BWIA met on Friday as scheduled to
discuss the final report prepared by a private sector team led
by Arthur Lok Jack. Mr. Valley also said that the Cabinet
subcommittee, chaired by Public Administration Minister Dr Lenny
Saith, met with Lok Jack's team on Friday.

However, Mr. Valley could not say exactly when the Cabinet will
make its final decision.

"As soon as Cabinet takes a decision... I mean I'm sure we're
going to have, there's going to be a press conference."

Lok Jack's team reviewed three specific options: a new structure
for BWIA, establishing an entirely new state-controlled or
majority-controlled airline, and the airline's possible closure
at a cost of US$350 million (US$2.2 billion).

         Phone: + 868 627 2942
         Home Page:


CANTV: Responds to Social Chamber's Pension Adjustment Decision
Compania Anonima Nacional Telefonos de Venezuela (CANTV) (NYSE:
VNT) commented Friday on the recent decision of the Social
Chamber of the Supreme Court of Venezuela in the lawsuit brought
by Federacion Nacional de Jubilados y Pensionados de Telefonos
de Venezuela (FETRAJUPTEL) (the Venezuelan National Telephone
Association of Retirees and Pensioners) regarding the adjustment
of pensions of retirees of CANTV.

In its comments, CANTV stated as follows:

Last Tuesday, July 26, the Social Chamber issued an adverse
decision to CANTV requiring the adjustment of pensions of
retirees, retroactive to January 1, 1993. The pensions will be
adjusted proportionally to the salary increases that resulted
from the collective bargaining process. This decision applies to
current and future retirees and their eligible survivors.

In addition, and pursuant to the new Constitution enacted on
December 30, 1999, adjusted pensions that have not reached the
minimum urban wage as of that date should then be increased to
that minimum.

A lower court will perform the calculations necessary to
determine the amounts due to each retiree or its eligible

The additional pension amounts are not subject to interest or
adjustment for inflation charges.

The Company believes that this decision goes far beyond the
specific guidelines issued by the Constitutional Chamber in
January 25, 2005, to be strictly followed by the Social Chamber.
The Company also believes that the decision is in violation of
the Venezuelan Constitution and it is on this ground that CANTV
will request a revision from the Constitutional Chamber.

Currently the Company is assessing the potential economic impact
that the Social Chamber's decision may have. This assessment
requires time and the involvement of actuarial consultants
experts in these matters. However, based on very preliminary
internal calculations, the range of additional liabilities
associated with this decision results in a very significant
impact to the Company's balance sheet.

As a matter of reference, should the decision become firm, the
low value of the range would exceed retained earnings and the
high value of the range would materially affect the Company's
total equity. In addition, the payment of retroactive
adjustments of pensions earned since 1993 to date, ordered in
the decision, would significantly affect the Company's current
cash position.

CANTV indicated that it will be communicating future
developments of this matter at the appropriate time.

Finally, CANTV stated that despite the relevance of the issue
just explained, the Company continues to be committed to its
customers and all other relevant stakeholders, and will maintain
its focus on executing its strategic plan.

CANTV, a Venezuelan corporation, is the leading Venezuelan
telecommunications services provider with approximately 3.1
million access lines in service, 3.1 million cellular
subscribers and 363 thousand Internet subscribers as of December
31, 2004. The Company's principal strategic shareholder is a
wholly owned subsidiary of Verizon Communications Inc. with
28.5% of the capital stock. Other major shareholders include the
Venezuelan Government with 6.6% of the capital stock (Class B
Shares), employees, retirees and employee trusts which own 7.1%
(Class C Shares) and Telefonica de Espana, S.A. with 6.9%.
Public shareholders hold the remaining 50.9 % of the capital

CONTACT: Cantv Investor Relations
         Phone: +011 58 212 500-1831 (Master)
                +011 58 212 500-1828 (Fax)

         The Global Consulting Group
         Ms. Lauren Puffer
         Phone: 646 284-9426 (US)

CANTV: Morgan Stanley Reduces Stock Recommendation
Investment house Morgan Stanley cut Compania Anonima Nacional
Telefonos de Venezuela (CANTV) (NYSE:VNT) to underweight from
overweight after the Supreme Court ordered the
telecommunications firm to adjust its pensions to meet the new
minimum wage level, reports Dow Jones Newswires.

"The company's estimate of the size of the pension hole puts
dividends and valuation at risk," Morgan Stanley said.

At the low end, CANTV will be adding US$700 million to its
enterprise value, and this would "seriously curtail their
ability to pay dividends as it wipes out the company's retained
earnings," Morgan Stanley said.

CANTV has said that it will look to appeal the court's ruling.
However, Morgan Stanley believes that a court reversal is
unlikely, as decisions in favor of labor complaints appear to be
gaining momentum.

CANTV will trade at the lower end of its historical range, or a
stock price below US$15, the investment house forecast.

CONTACT: Cantv Investor Relations
         Phone: +011 58 212 500-1831 (Master)
                +011 58 212 500-1828 (Fax)

         The Global Consulting Group
         Ms. Lauren Puffer
         Phone: 646 284-9426 (US)


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

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
Sheryl Joy P. Olano, Editors.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
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Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
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* * * End of Transmission * * *