TCRLA_Public/050808.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

            Monday, August 8, 2005, Vol. 6, Issue 155

                            Headlines


A R G E N T I N A

BANCO RIO: Shareholders OK $107M Capital Increase
CAPEX: Credit Rating Remains at `D'
CENTRAL PUERTO: Local Fitch Confirms Category 3 Rating on Shares
CLUB ITALIANO: Debt Payments Halted, Moves to Reorganize
COMBUSTIBLES GABE: Reorganization Becomes Bankruptcy

CONSOLI S.A.C.I.F.A.T.Y.M.: Reorganization Becomes Bankruptcy
FRIGO BEEF: Begining Liquidation
HABER MAYORISTA: Court Changes Reorganization to "Quiebra"
JUAN MINETTI/LOMA NEGRA: Appealing Government Fines
L Auberge S.R.L.: Liquidating Assets to Pay Debts

LUDZA S.A.: Liquidates Assets to Pay Debts
MAC SUPPORT S.A.: Reorganization Petition Gets Court Approval
MIZRAHI S.A.: General Report to be Presented to Court Sept. 21
POULSEN HORNUM: Court Deems Bankruptcy Necessary
SANATORIO CONCORDIA: Verification to End Aug. 9

TRANSENER: Rating Reflects Weak Business, Financial Profiles
TRANSPORTES INTEGRALES: Court Rules for Liquidation
VALBAMAR S.R.L.: Reorganization Process Starts


B E R M U D A

ANNUITY & LIFE: Posts $539,968 Net Loss for 3 Mos. Ended June 30
RENAISSANCE CAPITAL: Fitch Upgrades Rating to 'BB-'


B R A Z I L

AMERICA LATINA: Fitch Assigns 'BB-' Ratings
AMERICA LATIN: Consolidated EBITDAR Rises 32.2% in 2Q05
BEC: Bradesco Seen as Most Likely Winner in Upcoming Auction
SADIA: Revenues Totaled $2,044.4M in 2Q05
VARIG: Accounts for 3.5% of Boeing's Total Portfolio

VARIG: Taps Lufthansa Consulting as Restructuring Advisor


C H I L E

EDELNOR: Ratings Reflect Weak But Improving Financial Profile


M E X I C O

AOL LATIN AMERICA: Taps Cicerone Capital as Financial Advisors
AOL LATIN AMERICA: Seeks More Time to File Schedules, Statements
BALLY TOTAL: Court Upholds Arbitration Award
DIRECTV GROUP: Swings to Profit in the 2Q05
GRUPO MEXICO: Planned Aug. 12 Strike Could be Extended to 2 Days

HYLSA: Rating Reflects Aggressive Dividend Policy
MEXICANA DE AVIACION: Iberia Awaiting Sale Prospectus
SATELITES MEXICANOS: S. Maza Files Sec. 304 Petition in S.D.N.Y.
SATELITES MEXICANOS: Issues Section 304 Petition Summary


N I C A R A G U A

* NICARAGUA: Interim Strategy discussed by World Bank Board


V E N E Z U E L A

IBH: Reports Operating $53.2M Net Profit, $30.6M Profit
PDVSA: Signs JV Agreements with 8 Oil Firms
SIDOR: Worker Protests Cripple Operations
SINCOR: Unveils 5-Yr, $500M Investment Plan

     -  -  -  -  -  -  -  -

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

BANCO RIO: Shareholders OK $107M Capital Increase
-------------------------------------------------
Banco Rio de la Plata, a unit of Spanish banking group Grupo
Santander, has secured approval from its shareholders to embark
on a capital increase of up to ARS310 million (US$107 million),
reports Business News Americas.

The new capital injection forms part of Banco Rio's strategy to
continue to fortify its balance sheet.

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

"The bank had refinanced most of the credits it granted before
the 2002 crisis. The process of capitalization to clean up our
balance sheet as well as to write off international liabilities
was already well underway," he said.

"There is an ongoing process in the Argentine banking system, a
sort of a trade-off between solvency and profits. We have
decided to work to strengthen the bank's solvency and to clean
up our balance sheet as soon as possible. We believe solvency
and cleanup are key to sustaining the bank's future growth," the
source said.

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

Meanwhile, an official from Banco Rio said the bank expects to
increase its market share by 1% in 2005 to 10%. Growth during
the second half of the year will be driven by a strong focus on
SMEs and individuals.

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


CAPEX: Credit Rating Remains at `D'
-----------------------------------
Rationale

The corporate credit rating on Argentina-based electricity
generator CAPEX S.A. will remain at 'D' until the debt
restructuring is formally concluded, when it will be raised to
'B-'.

Standard & Poor's Ratings Services also expects to assign a
stable outlook to the company as it emerges from default,
reflecting the expectation that CAPEX will generate excess cash
flow during the next three years that will be partly applied to
reduce its outstanding debt, resulting in better debt-service
coverage ratios. This scenario assumes a relatively stable
foreign exchange rate and some recovery of electricity prices in
the spot market in U.S. dollar terms.

The ratings on the company could be raised if debt-service
coverage ratios and financial flexibility significantly improve.
Nevertheless, the ratings could be lowered if the company's cash
flow generation is significantly affected by any adverse event
like a strong decrease of electricity prices in U.S. dollar
terms, deriving from a strong devaluation of the Argentine peso,
or further government intervention in the price-setting
mechanism.

The ratings on CAPEX reflect the company's weak business and
financial profile, which derive from the high political and
regulatory risk in Argentina and also from the company's
relatively high foreign exchange risk and limited financial
flexibility. The ratings also incorporate CAPEX's low-cost
position for electricity generation in Argentina and a favorable
debt maturity schedule after its debt-restructuring process is
complete.

Standard & Poor's expects CAPEX to benefit from a debt reduction
of about 14% or about US$40 million, to about US$260 million by
August 2005, and a smooth debt maturity profile (CAPEX will not
face debt maturities in the next two years), which represent a
positive credit factor. As a result, CAPEX's leverage should
improve to about 50% to 60% if measured by total debt to total
capitalization compared with 74.5% as of April 2005. In
addition, CAPEX's cash generation significantly improved in the
fiscal years ending April 2004 and April 2005 mainly as a result
of higher electricity prices and, to a lesser extent, of higher
oil and liquefied natural gas prices. The higher electricity
prices in fiscal 2005 mainly reflect the higher variable cost of
natural gas plants as a result of the natural gas price
increases for large industrial and commercial users set by the
government in 2004. Standard & Poor's expects CAPEX's funds from
operations (FFO) to represent between 15% and 20% of total debt
in the next four years under a conservative scenario, but with a
relatively stable foreign exchange rate. In the scenario, CAPEX
should prepay long-term debt in accordance with mandatory cash
sweep clauses included in the terms and conditions of the new
debt issued July 25, 2005, which should result in better debt-
service coverage ratios and financial flexibility.

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

Liquidity

CAPEX's financial flexibility and liquidity should remain
restricted after the debt restructuring with limited access to
the financial markets. Standard & Poor's does not expect CAPEX
to maintain significant cash reserves in the medium term (the
company must keep a minimum cash position of US$5 million),
mainly because the new debt issued July 25, 2005 will contain
certain mandatory cash-sweep clauses that will oblige CAPEX to
apply most of the potential excess cash flow to prepay debt and
also carry out additional capital expenditures. In addition, the
terms and conditions of the new debt contain various restrictive
covenants, including limitations on additional debt, maximum
capital expenditures and investments, and dividends.

Primary Credit Analyst: Sergio Fuentes, Buenos Aires
(54) 114-891-2131; sergio_fuentes@standardandpoors.com

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


CENTRAL PUERTO: Local Fitch Confirms Category 3 Rating on Shares
----------------------------------------------------------------
The Argentine arm of Fitch Ratings confirmed its Category 3
rating on shares of local thermo generator Central Puerto. The
rating reflects the Company's low cash generation capacity and
the shares' high liquidity. Central Puerto suspended all capital
and interest payments on its due debt in February 2002 in order
to safeguard its operations and working capital and began a
process of renegotiating its debt. France's Total owns 63.9% of
Central Puerto.


CLUB ITALIANO: Debt Payments Halted, Moves to Reorganize
--------------------------------------------------------
Court No. 22 of Buenos Aires' civil and commercial tribunal is
studying the request for reorganization submitted by local
company Club Italiano Asociacion Civil, says Infobae.

The report adds that that the Company filed a "Concurso
Preventivo" petition following cessation of debt payments.

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

CONTACT: Club Italiano Asociacion Civil
         Rivadavia 4731
         Buenos Aires


COMBUSTIBLES GABE: Reorganization Becomes Bankruptcy
----------------------------------------------------
Combustibles Gabe S.A. prepares to wind-up its operations after
Court No. 7 of Casilda's civil and commercial tribunal changed
the Company's reorganization case into bankruptcy.

The report adds that the court assigned Eduardo Heitz as
trustee, who will verify creditors' proofs of claim until Sep.
26, 2005.

The court also ordered the trustee to prepare individual reports
after the verification process is completed, and have them ready
by Nov. 8, 2005. A general report on the bankruptcy process is
expected on Dec. 21, 2005.

CONTACT: Combustibles Gabe S.A.
         Sarmiento y Monserrat Servera
         Chabas (Santa Fe)

         Mr. Eduardo Heitz, Trustee
         Bv. Lisandro de la Torre 1885
         Casilda (Santa Fe)


CONSOLI S.A.C.I.F.A.T.Y.M.: Reorganization Becomes Bankruptcy
-------------------------------------------------------------
The reorganization of Consoli S.A.C.I.F.A.T.Y.M. has progressed
into bankruptcy. Argentine news source Infobae relates that
Neuquen's civil and commercial Court No. 4 ruled that the
Company is "Quiebra Decretada".

The report adds that the court assigned Ms. Mabel Ambrosio, Mr.
Luis Jurijiw and Mr. Luis Massotta as trustees, who will verify
creditors' proofs of claim until Aug. 11, 2005.

The court also ordered the trustees to prepare individual
reports after the verification process is completed, and have
them ready by Sep. 23, 2005. A general report on the bankruptcy
process is expected on Nov. 7, 2005.

CONTACT: Consoli S.A.C.I.F.A.T.Y.M.
         Expedicionarios del Desierto y Paraguay
         Centenario (Neuquen)

         Ms. Mabel Ambrosio
         Mr. Luis Jurijiw
         Mr. Luis Massotta
         Trustees
         Santiago del Estero 435
         Ciudad de Neuquen (Neuquen)


FRIGO BEEF: Begining Liquidation
--------------------------------
Frigo Beef S.R.L. of Buenos Aires will begin liquidating its
assets after Court No. 12 of the city's civil and commercial
tribunal declared the Company bankrupt. Infobae reveals that the
bankruptcy process will commence under the supervision of court-
appointed trustee, Norma Elida Fistzen.

The trustee will review claims forwarded by the Company's
creditors until Sep. 14, 2005. After claims verification, Ms.
Fistzen will submit the individual reports for court approval on
Oct. 26, 2005. The general report will follow on Dec. 7, 2005.
Clerk No. 24 assists the court on this case.

CONTACT: Ms. Norma Elida Fistzen, Trustee
         Viamonte 1446
         Buenos Aires


HABER MAYORISTA: Court Changes Reorganization to "Quiebra"
----------------------------------------------------------
The Haber Mayorista S.A. insolvency case has progressed into
bankruptcy, reports Argentine news source Infobae.

Cordoba's civil and commercial Court No. 5 ruled that the
Company is "Quiebra Decretada" and assigned city accountant
Gabriel Tobal as trustee for the Company's liquidation.

Mr. Tobal will verify claims of the Company's creditors until
tomorrow, Aug. 9, 2005. The forwarded claims will serve as basis
for the individual reports, which the trustee will present to
court on Sep. 21, 2005. The trustee is also required to submit a
general report on the case on Nov. 17, 2005.

CONTACT: Haber Mayorista S.A.
         Pasaje Boveri 77
         Ciudad de Cordoba (Cordoba)

         Mr. Gabriel Tobal, Trustee
         Lavalleja 1206
         BA Cofico (Cordoba)


JUAN MINETTI/LOMA NEGRA: Appealing Government Fines
---------------------------------------------------
Juan Minetti and Loma Negra said Wednesday that they have
submitted formal appeals on the hundred million pesos in fines
that that government imposed on them just recently, reports Dow
Jones Newswires.

The government slapped cement companies, including Loma Negra
and Juan Minetti, a total fine of ARS310 million (US$108
million) for having formed a price cartel.

Loma Negra was hit with the biggest penalty of ARS138.7 million
while Juan Minetti was ordered to pay ARS100.1 million.

Last week, when the Economy Ministry issued its resolution
imposing the penalties, Juan Minetti said it "believes the
supposed (price) accords are inexistent."

Controlled by Swiss cement giant Holcim, Juan Minetti is the
country's second largest cement company next to Loma Negra.
Construcoes e Comercio Camargo Correa SA, Brazil's fourth-
biggest cement producer is awaiting approval from Argentine
regulators to acquire Loma Negra.

CONTACT:  Juan Minetti SA
          87 Ituzaingo
          Cordoba
          Argentina  5000
          Phone: +54 51 26 7529
          Fax:  +54 51 24 4709
          Home Page: http://www.juanminetti.com.ar
          Contacts:
          Dr. Manuel Augusto J. Baltazar Ferrer, Chairman
          Atty. Carlos Buhler, Executive Vice Chairman & General
                                     Manager


L Auberge S.R.L.: Liquidating Assets to Pay Debts
-------------------------------------------------
Buenos Aires-based L Auberge S.R.L. 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, Elba Nelida Staniscia. The trustee
will verify creditors' proofs of claim until Oct. 28, 2005. The
validated claims will be presented in court as individual
reports on Dec. 14, 2005.

Ms. Staniscia 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 March 3, 2006.

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

CONTACT: L Auberge S.R.L.
         Uruguay 560
         Buenos Aires

         Ms. Elba Nelida Staniscia, Trustee
         Avda. Rivadavia 3320
         Buenos Aires


LUDZA S.A.: Liquidates Assets to Pay Debts
------------------------------------------
Ludza S.A. will begin liquidating its assets following the
pronouncement of the Buenos Aires' civil and commercial Court
No. 13 that the Company is bankrupt, Infobae reports.

The bankruptcy ruling places the Company under the supervision
of court-appointed trustee, Carlos Alberto Yacovino. The trustee
will verify creditors' proofs of claim until Aug. 31, 2005.

Mr. Yacovino is required by the court to submit individual
reports on the validated claims and a general report on the
Company's bankruptcy case.

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

CONTACT: Mr. Carlos Alberto Yacovino, Trustee
         Jean Jaures 933
         Buenos Aires


MAC SUPPORT S.A.: Reorganization Petition Gets Court Approval
-------------------------------------------------------------
Mac Support S.A. will begin reorganization following the
approval of its petition by Court No. 24 of Buenos Aires' civil
and commercial tribunal. The opening of the reorganization will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

Ernesto Oscar Puerta will oversee the reorganization proceedings
as the court-appointed trustee. He will verify creditors' claims
until Sep. 30, 2005. The validated claims will be presented in
court as individual reports on Nov. 4, 2005.

Mr. Puerta is also required by the court to submit a general
report essentially auditing the Company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. The report will be presented
in court on Dec. 9, 2005.

An Informative Assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled on May 10, 2006.

Clerk No. 47 assists the court on this case.

CONTACT: Mr. Ernesto Oscar Puerta, Trustee
         Fragata Presidente Sarmiento 72
         Buenos Aires


MIZRAHI S.A.: General Report to be Presented to Court Sept. 21
--------------------------------------------------------------
The general report on the Mizrahi S.A. bankruptcy case is due on
Sep. 21, 2005 after the trustee appointed by San Miguel de
Tucuman's civil and commercial Court No. 7 submitted the
creditors' verified individual claims on July 29, 2005.

Mizrahi S.A. entered bankruptcy protection after the court
ordered the Company's liquidation. The order effectively
transferred control of the Company's assets to a court-appointed
trustee who is tasked to supervise the liquidation proceedings.


POULSEN HORNUM: Court Deems Bankruptcy Necessary
------------------------------------------------
Poulsen Hornum y Cia S.C.A., which was undergoing
reorganization, entered bankruptcy on orders from Tres Arroyos'
civil and commercial Court No. 2. Infobae relates that the
court, which is assisted by Clerk No. 1, appointed Mr. Juan
Domingo Vrdoljak, to be the receiver on the case. Mr. Vrdoljak
will conduct the credit verification process "por via
incidental."

CONTACT: Tres Arroyos
         San Francisco de Bellocq
        (Partido de Tres de Arroyos)

         Mr. Juan Domingo Vrdoljak, Trustee
         Estrada 249
         Tres Arroyos


SANATORIO CONCORDIA: Verification to End Aug. 9
-----------------------------------------------
The verification of creditors' claims against Sanatorio
Concordia S.A. will end tomorrow, Aug. 9, 2005.

Infobae relates that the Mr. Jorge Albornoz, the trustee
selected by the court for the Company's insolvency case, will
prepare individual reports out of the forwarded claims and
submit them on Sep. 21, 2005. The submission of the general
report will follow on Nov. 4, 2005.

Sanatorio Concordia S.A. will endorse the settlement proposal,
drafted from the submitted claims, for approval by the creditors
during the informative assembly scheduled on June 15, 2006.

The Company successfully petitioned for reorganization after
Court No. 5 of Concordia's civil and commercial tribunal issued
a resolution opening the Company's insolvency proceedings.

CONTACT: Mr. Jorge Albornoz, Trustee
         Coldaroli 43
         Concordia (Entre Rios)


TRANSENER: Rating Reflects Weak Business, Financial Profiles
------------------------------------------------------------
Corporate Credit Rating - CCC+/Stable/--

Rationale

The ratings on Argentina's largest electricity transmitter,
Compania de Transporte de Energia Electrica en Alta Tension
TRANSENER S.A. (Transener) reflect the company's weak business
and financial profiles, which derive from the high political and
regulatory risk in Argentina, the company's weak financial
ratios, and very limited financial flexibility. In contrast, the
ratings also incorporate Transener's strong competitive position
and efficient operations.

Transener's financial performance was severely damaged by the
pesification and freezing of its tariffs in January 2002. The
completion of its debt-restructuring process on June 30, 2005,
reduced total debt by about 50% to about US$285 million and
smoothed its debt maturity profile, providing some relief to the
company's cash flow. Weak cash flow when compared with the
company's new debt levels (pro forma total debt to EBITDA of
about 7x without considering any tariff increase) and high
foreign-exchange risk deriving from its mostly peso-denominated
revenues and U.S. dollar-denominated debt, however, still
represent significant challenges for Transener. These challenges
will be especially acute if tariff adjustments are delayed or
there are significant exchange rate or inflation movements.

Transener also continues to face high regulatory uncertainty
related to the still-pending renegotiation of its concession
contract. In February 2005, the company and its subsidiary
Transba S.A. signed a preliminary agreement with UNIREN, the
entity created by the government to renegotiate the concessions
for public service companies. This agreement incorporates tariff
increases of 31% and 25%, respectively, a tariff-adjustment
mechanism, mandatory investments, and service-quality targets
for a transition period until February 2006, when the concession
contract should be fully renegotiated. This preliminary
agreement has yet to be approved by the National Congress and
promulgated by the Argentine government. If effectively
implemented, the proposed tariff increases should provide a
boost to Transener's cash flow in the short term. The company's
long-term credit quality, however, will depend on the final
terms and conditions of the renegotiated concession contracts.

Transener has a 95-year concession contract to operate and
maintain most of the high-tension transmission lines in
Argentina, and to operate and maintain for 15 years the 1,300-
kilometer (km) high-tension (500 kilovolt (kV)) transmission
line, built by the company between the Comahue region and Buenos
Aires. Transener is controlled by Citelec S.A. (65% ownership),
which is in turn controlled equally by Dolphin Fund Management
and Petrobras Energia S.A. (B/Positive/--).

Liquidity

Transener's financial flexibility and liquidity remain
constrained by its weak financial profile and restrictions
imposed in the terms and conditions of the new debt. These
restrictions include mandatory prepayment clauses in case the
company generates excess cash. The company's liquidity reserves,
of about US$70 million in March 2005, were mostly applied to
debt reduction under the terms and conditions of the debt-
restructuring process. Transener will, however, have to maintain
a minimum cash position of US$8 million.

Outlook

The stable outlook reflects Standard & Poor's expectations that
Transener will be able to meet its financial obligations during
2005 and 2006 assuming that exchange rates and inflation will
remain relatively stable. Current ratings do not incorporate a
potential tariff adjustment resulting from the preliminary
agreement between Transener and UNIREN, owing to the
uncertainties regarding the timeframe of the approval. Ratings
would benefit from definitions in the tariff and greater
certainty about the new terms and conditions under which the
concession contract will be finally renegotiated. Ratings could
be lowered, however, if Transener's financial performance is
weaker than projected or there is no significant progress
regarding tariffs and the concession contracts by mid 2006.

Primary Credit Analyst: Sergio Fuentes, Buenos Aires
(54) 114-891-2131; sergio_fuentes@standardandpoors.com

Secondary Credit Analyst: Mariano Ingaramo, Buenos Aires
(54) 114-891-2124; mariano_ingaramo@standardandpoors.com


TRANSPORTES INTEGRALES: Court Rules for Liquidation
---------------------------------------------------
Court No. 10 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Transportes Integrales 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 Isaac Jospe,
the court-appointed trustee.

Mr. Jospe will verify creditors' proofs of claim until Sep. 28,
2005. The verified claims will serve as basis for the individual
reports to be submitted in court on Nov. 10, 2005. The
submission of the general report follows on Dec. 22, 2005.

Clerk No. 19 assists the court on this case, which will end with
the disposal of the Company's assets in favor of its creditors.

CONTACT: Mr. Isaac Jospe, Trustee
         Jose Evaristo Uriburu 1054
         Buenos Aires


VALBAMAR S.R.L.: Reorganization Process Starts
----------------------------------------------
Court No. 1 of Cutral Co's civil and commercial tribunal
approved a petition for reorganization filed by local company
Valbamar S.R.L., reports Infobae.

Graciela Fabiana Diaz, a local accountant, was designated
as the Company's trustee. Her duties include the verification of
credit claims and preparation of the individual and general
report.

The court gave creditors until Aug. 10, 2005 to present their
claims to the trustee for verification, Infobae reveals, without
stating whether the court has set the deadlines for the filing
of the trustee's reports.

CONTACT: Cutral Co
         Principal Saez 526
         Cutral Co (Neuquen)

         Graciela Fabiana Diaz
         Principal Saez 690
         Cutral Co (Neuquen)



=============
B E R M U D A
=============

ANNUITY & LIFE: Posts $539,968 Net Loss for 3 Mos. Ended June 30
----------------------------------------------------------------
Annuity and Life Re (Holdings), Ltd. (OTC Bulletin Board:
ANNRF.OB) reported Thursday financial results for the three
months ended June 30, 2005. The Company reported a net loss of
$539,968 or $0.02 per fully diluted share for the three months
ended June 30, 2005, as compared to a net loss of $6,430,378 or
$0.25 per fully diluted share for the three months ended June
30, 2004. The second quarter 2004 loss included a $5 million
charge for the cost of settling the shareholder class action
lawsuit against the Company and certain of its present and
former officers and directors. Net realized investment losses
for the three months ended June 30, 2005 and June 30, 2004 were
$6 and $137,885, respectively.

Gross unrealized gains on the Company's investments were
$673,675 as of June 30, 2005, as compared to gross unrealized
gains of $1,266,517 at December 31, 2004. The Company's
investment portfolio currently maintains an average credit
quality of AA. Cash used by operations for the six months ended
June 30, 2005 was $41,566,790 as compared to cash used by
operations of $28,450,290 for the six months ended June 30,
2004. The cash used by operations during the six months ended
June 30, 2005 included payments made in connection with the
recapture and settlement of the Transamerica annuity reinsurance
agreement and the novation of the Scottish and F&G life
reinsurance agreements to Transamerica. Approximately
$39,600,000 was paid to Transamerica in connection with these
novation and recapture transactions in the six months ended June
30, 2005.

Annuity and Life Re (Holdings), Ltd. provides annuity and life
reinsurance to insurers through its wholly owned subsidiaries,
Annuity and Life Reassurance, Ltd. and Annuity and Life
Reassurance America, Inc.

To view consolidated balance sheets and statements:
http://bankrupt.com/misc/ANNUITY_LIFE.htm

CONTACT: Annuity and Life Re (Holdings), Ltd.
         John Lockwood
         Phone: 1-441-296-7667
         URL: http://www.alre.bm/


RENAISSANCE CAPITAL: Fitch Upgrades Rating to 'BB-'
---------------------------------------------------
Fitch Ratings, the international rating agency, upgraded
Wednesday Renaissance Capital Holdings Limited's ("RCHL") Long-
term rating to 'BB-' (BB minus) from 'B+'. The Outlook for the
Long-term rating remains Stable. RCHL's other ratings have been
affirmed at Short-term 'B', Individual 'C/D' and Support '5'.
The Long-term rating of RCHL's UK-domiciled subsidiary,
Renaissance UK Holdings Limited ("RUKHL"), has also been
upgraded to 'BB-' (BB minus) from 'B+', and its Support rating
has been changed to '3' from '4', reflecting RCHL's greater
capacity to provide support. The Outlook for RUKHL's Long-term
rating remains Stable; its other ratings are affirmed at Short-
term 'B' and Individual 'C/D'.

The upgrade of RCHL's Long-term rating reflects its improved
investment-banking franchise in Russia and to a lesser degree in
Ukraine. It also reflects the company's continued strong
performance and sound capitalisation as well as further revenue
diversification. In addition, RCHL's Long-term, Short-term and
Individual ratings take into account its experienced management
team and good risk management practices. However, the ratings
also reflect RCHL's small, albeit rapidly growing, size, the
high-risk profile of the markets in which it operates and its
complex group structure.

The Long-term, Short-term and Support ratings of RUKHL reflect
Fitch's view that there would be a strong propensity of RCHL to
provide support for RUKHL in case of need, and hence, taking
into account RCHL's Long-term 'BB-' (BB minus) rating, the
moderate probability of such support being forthcoming. RUKHL's
Individual rating reflects its smaller size and less diversified
revenues (compared to RCHL), but also a higher level of legal
and regulatory comfort and its lower credit risk profile.

Upward pressure on RCHL's Long-term and Individual ratings, and
hence on RUKHL's Long-term rating via support, could result from
an improvement in the Russian operating environment,
diversification of RCHL's operations into lower-risk countries
or a reduction in risk limits relative to equity. Downward
pressure could result from deterioration in the economic or
political situation in Russia, significant credit or market
losses, a substantial weakening of the group's capitalisation.
Reflecting the investment banking nature of RCHL's business,
downward rating pressure could also result from a considerable
loss of franchise due, for example, to a departure of key
managers or reputational damage suffered by the company; however
these risks are mitigated by the equity participation of
managers and a succession plan designed to quickly identify and
appoint replacements for any departing managers.

RCHL's performance has been very strong but its focus on Russia
and Ukraine makes both it and RUKHL vulnerable to a sharp,
prolonged downturn in investor confidence in these countries.
However, efficiency and cost flexibility are relatively high and
revenues are increasingly well diversified by both products and
transactions. Capitalisation is strong in Fitch's view and the
group's regulated subsidiaries comfortably meet their regulatory
capital requirements.

The Renaissance group was founded in 1995 by several
individuals, mostly expatriates working in Russia, and is now a
leading Russian and Ukrainian investment bank with RCHL being
the holding company located in Bermuda. It is engaged in
equities and fixed-income brokerage, capital markets, investment
banking and asset management. RUKHL was created in 2000 for the
group's trading operations with non-CIS clients. RUKHL's trading
subsidiaries are regulated by the UK FSA, the US NASD and the
Cypriot SEC.

CONTACT: Alexei Kechko, Moscow, +7 095 956 9901
         James Watson, Moscor, +7 095 956 9901

MEDIA RELATIONS: Jon Laycock, London, +44 20 7417 4327



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

AMERICA LATINA: Fitch Assigns 'BB-' Ratings
-------------------------------------------
Fitch Ratings has assigned long-term local and foreign currency
ratings of 'BB-' to ALL - America Latina Logistica S.A. (ALL).
Fitch has also assigned a long-term rating of 'A-(bra)' on the
Brazilian national scale to ALL's existing third and fourth
debenture issuances and a 'BBB+(bra)' rating to the company's
second debenture issuance. In conjunction with these rating
actions, Fitch has affirmed ALL's long-term national scale
rating of 'A-(bra)'. The Rating Outlook for all the ratings is
Stable.

ALL's ratings reflect the group's strong and growing operational
cash flow, its balanced financial profile, its position as the
sole provider of railway transportation services for its major
customers in southern Brazil, the potential for growth in this
region, and limited competitive threats. The ratings also
incorporate risks associated with large investment requirements
to meet the growing demand from the region's agricultural
sector. The ratings also reflect limited restrictions on cash
distributions from ALL's operating subsidiaries, as well as the
guarantees provided by ALL's Brazilian operating subsidiaries,
America Latina Logistica do Brasil S.A. (ALL Brasil) and America
Latina Logistica Intermodal S.A. (ALL Intermodal), for ALL's
debt obligations, which limits structural subordination issues.
The company's second debenture issuance does not benefit from
such a guarantee and thus is rated one notch lower than the
other issuances.

Financial results are solid and improving. Despite the
challenges in 2004 of reduced soybean cargo volumes due mainly
to crop failures and lower demand from China, ALL was able to
implement higher average tariffs, increase transportation
volumes of other agricultural products, and achieve significant
operational improvements. As a result, operating EBITDAR,
defined as operating EBITDA plus the company's concession and
lease payments, increased to BRL401 million in 2004 from BRL285
million in 2003; ALL's EBITDAR margin grew to 42.3% from 30.0%
in 2003. In 2004, operating EBITDAR covered fixed expenses,
defined as interest expense plus concession and lease payments,
by 2.4 times (x) a marked improvement from 1.4x in 2003 and much
higher than the average of the prior four years of about 1.2x.
The combination of additional improvements in operational
efficiencies and higher cargo volumes expected in 2005 (of
approximately 30 million tons) should allow ALL to generate
operating EBITDAR of about BRL500 million. As of March 2005,
operating EBITDAR reached BRL73.3 million and was stable
compared with the same period of 2004.

ALL's debt profile is manageable. As of Dec. 31, 2004, ALL's
consolidated debt totaled BRL1.2 billion, including Fitch's
estimate of BRL299 million for the capitalization of future
lease and concession payments. The debt structure improved over
the period with short-term debt representing 11% of the total
debt compared with 22% in 2003. In 2004, the company's ratio of
total debt to operating EBITDAR was 3.1x, an improvement from
2003 of 3.8x. Total debt is expected to increase somewhat during
2005 due to long-term lease-like contractual obligations with
All's customers; the company will indirectly pay back the amount
invested by its customers via reduced tariffs for the associated
cargo transported. The coverage ratio of total debt/operating
EBITDAR should decline since the operating EBITDAR is expected
to grow as new investments are added and cargo volumes increase.
ALL maintains a strong liquidity position with a cash and
marketable securities balance of BRL645 million as of March 31,
2005, which can also support other investments and short-term
debt obligations.

ALL benefits from the expected continued demand from major
customers such as soybean producer Bunge Alimentos S.A. (Bunge)
and their ability and willingness to enter into long-term
contracts. Under these long term arrangements, ALL's customers
provide the capital for investments in railcars to support their
increased transportation needs. Such customers use ALL as their
primary means of transportation as alternative transport by
truck is higher cost and often less efficient.

ALL is a holding company that directly controls the Brazilian
subsidiaries ALL - America Latina Logistica do Brasil S.A. (ALL
Brasil) and ALL - America Latina Logistica Intermodal S.A. (ALL
Intermodal), and indirectly controls the Argentine subsidiaries
ALL - America Latina Logistica Central S.A. (ALL Central), and
ALL - America Latina Logistica Mesopotamica S.A. (ALL Meso).
ALL's network of 16,400 kilometers of railway lines provides
freight transportation of primarily soybeans, as well as other
agriculture and industrial products in the southern region of
Brazil and the central region of Argentina. The railway provides
key transportation links with the region's main ports.

CONTACT:  Anita Saha, CFA +1-312-368-3179, Chicago
          Gisele Paolino, +55-21-4503-2600, Rio de Janeiro
          Mauro Storino +55-21-4503-2600, Rio de Janeiro

MEDIA RELATIONS: Brian Bertsch +1-212-908-0549, New York


AMERICA LATIN: Consolidated EBITDAR Rises 32.2% in 2Q05
-------------------------------------------------------
America Latina Logistica (Bovespa: ALLL11) announced Thursday
its 2Q05 and 1H05 results.

HIGHLIGHTS:

- Consolidated EBITDAR increased 32.2% from R$110.6 million in
  2Q04 to R$146.3 million in 2Q05; EBITDAR margin increased 7.2
  points from 41.7% in 2Q04 to 48.9% in 2Q05. In 1H05,
  consolidated EBITDAR increased 21.1% from R$180.6 million in
  1H04 to R$218.7 million in 1H05, and EBITDAR margin increased
  3.6 points from 37.3% in 1H04 to 40.8% in 1H05. The year-
  over- EBITDAR growth and margin expansion in a year when we
  faced such a drastic break in the soybean crop is only
  possible due to the room we have to grow market share and the
  operational flexibility, which allowed us to concentrate
  shipments in areas less affected by the draught. Consolidated
  net income for 2Q05 and 1H05 decreased 23.6% and 4.0% to
  R$34.5 million and R$49.6 million, respectively, including
  R$24.8 million in 2Q05 and R$27.0 million in 1H05 of
  translation loss of our investment in ALL Argentina due to
  appreciation of Real $/Peso $ exchange rate.

* Average prices in our Brazilian operations increased 15.7%
  from R$56.6 per '000 RTK in 2Q04 to R$65.5 per '000 RTK in
  2Q05. The higher yield was mainly driven by higher freight
  prices implicit in our commercial agreements as well as take-
  or-pay revenues from clients in the Rio Grande do Sul area.
  During 1H05, the yield increased 17.3% as compared to the
  same period of 2004, from R$52.8 per '000 RTK to R$61.9 per
  '000 RTK. The break in the soybean crop reduced overall
  volumes and freight rates in the spot market. Our commercial
  agreements, accounting for the majority of our volumes,
  protect our prices and allowed for this significant increase
  in average yield.

* In early May we took measures to reduce our cost structure
  cutting 10% of ALL Brasil's personal and operating expenses.
  A total of 300 employees were laid off as the main measure to
  reduce operating expenses and better adapt to the scenario we
  encountered in the grain market given the extent of the
  draught in the Rio Grande do Sul area. The impact of the
  measures taken will reduce costs by an estimated R$12 million
  over a 12-month period.

* ALL Argentina's EBITDAR increased 74.8%, from P$7.6 million
  in 2Q04 to P$13.2 million in 2Q05 while EBITDAR margin
  increased 7.8 points from 20.6% in 2Q04 to 28.4% in 2Q05. The
  increase in EBITDAR resulted mainly from market share gains
  sustained by productivity improvements and a more reliable
  operation. Volume increased 9.3% from 899 million RTK in 2Q04
  to 982 million RTK in 2Q05 and revenues increased by 27.5%
  from P$37.6 million in 2Q04 to P$47.9 million in 2Q05. In
  1H05 EBITDAR increased 45.3% from P$16.0 million in 1H04 to
  P$23.3 million.

CONTACT: American Latina Logistica
         Rodrigo Campos, +011-55-41-2141-7459
         E-mail: rodrigo.campos@all-logistica.com

         Roberta Ehlers, +011-55-41-2141-7465
         E-mail: robertae@all-logistica.com


BEC: Bradesco Seen as Most Likely Winner in Upcoming Auction
------------------------------------------------------------
Banco Bradesco is seen as the most likely candidate to buy state
bank Banco do Estado do Ceara (BEC), reports Business News
Americas.

BEC is scheduled for privatization on September 15 with a
minimum price of BRL542 million.

Brazil's top three private banks Bradesco, Itau and Unibanco
have pre-qualified together with GE Consumer Finance for the
auction. But when auction time comes, local investment bank
Pactual sees the actual bidding turning into a Brazilian affair
with Bradesco coming out on top.

Pactual said Bradesco has shown greater interest in buying banks
in the North and Northeastern regions of Brazil while Itau has
been more focused on beefing up its presence in the South and
Southeastern regions. In the case of Unibanco, it has much less
experience than the other two in buying and integrating state
banks.

Brazil's federal government owns 99% of BEC, and the bank's
employees will have a chance to buy 10% of the government's
shares at a discounted price.

BEC, one of the three remaining government-owned banks in
Brazil, administers assets valued at BRL1.6 billion. The bank's
70 branches serve an estimated 278,000 clients.


SADIA: Revenues Totaled $2,044.4M in 2Q05
-----------------------------------------
Sadia S.A. (BOVESPA: SDIA4; NYSE: SDA; LATIBEX: XSDI), the
Brazilian leader in the processed food, poultry and pork
industries, announced Wednesday the results for the second
quarter of 2005 (2Q05). The Company's operating and financial
information, approved by the Audit Committee on July 27, 2005,
are shown in Brazilian Reais, unless stated otherwise, and are
based on consolidated figures, as required by Brazilian
corporate law. All comparisons made in this release are based on
the same period in 2004 (2Q04), except where stated otherwise.

Executive President of Sadia S.A. Gilberto Tomazoni said: "Sadia
ended the first half of 2005 with new revenue and volume levels.
So far this year, gross operating revenues have risen 15.6% over
the same period in 2004, and sales volumes have increased 19.1%.
In the second quarter, margins continued to recover.

In a situation where the country's economic growth has begun to
show signs of slowing down, and the exchange rate has not been
very favorable toward exporters, increasing profitability will
be one of our greatest challenges in the months ahead and, if on
the cost side the outlook is stable, operationally-speaking we
are working hard to boost our level of efficiency regarding
various processes.

In the second quarter, despite the negative impact of the
exchange rate on EBITDA, we enjoyed some of the best results in
our history, with a net income of R$144.6 million. Confident
about the Brazilian economy and rising international demand, in
the second quarter, Sadia went ahead with its investment plans,
which will total R$500 million by the end of 2005, and enable us
to increase capacity to serve all of the markets where we are
present."

Gross Operating Revenue

Company revenues totaled R$2,044.4 million in 2Q05, increasing
15.2% over the same period last year and 7.5% when comparing
1Q05.

This change was due to, basically, the following factors:

- The increase of 16.3% in sales volume, when compared to 2Q05,
and of 6,0% in relation to 1Q05;

- The recovery of 1.2% (over 2Q04) in the prices of processed
foods in the domestic market, which represents approximately 80%
of this market revenues; and

- The positive performance of poultry exports, segment which
represents more than 70% of the export market revenues and
registered an increase of 10.9%, in relation to 2Q04, and of
9.8%, when compared to 1Q05.The decrease of 10.7% in the export
market poultry prices in relation to 2Q04, was less than the
15.5% dollar depreciation in the same period, calculated based
on the monthly closing average quotes. When compared to the
1Q05, the price has fallen 2.7%, while the dollar depreciation
reached 7.6%.

In 2Q05, domestic sales represented 47.9% of total revenues, and
exports, 52.1%. Sales volumes, accounted for 42.9% in the
domestic market, and 57.1% in the export market.

On the domestic front, in a scenario where economic recovery has
not yet benefited the non-durable goods sector, the Company
continued to adjust supply to the income levels of consumers
with diverse socio-economic profiles and regionally distinct
preferences.

Domestic Market

The Company's domestic market revenues were R$980.3 million, up
13.1%, and sales volumes rose 9.1% over 2Q04. Compared to 1Q05,
revenues fell slightly by 1.5% and volumes dropped 2.2%,
primarily due to adjustments in the mix for consumers with
different income profiles.

Maintaining revenues close to the R$ 1 billion-mark was due,
above all, to a strategy based on the pulverization of the
distribution channels, product launchings compatible with
consumer purchasing power, and improved management of the
Company's trademarks. Additionally, for some time now, Sadia has
been integrating into its line, items that are better suited to
regional differences in consumer tastes.

Processed product sales volumes rose 9.2% over 2Q04, with a
10.5% increase in revenues, due to a speedy recovery of prices
during this interval. Volumes and revenues showed no significant
volatility when compared to 1Q05. The small drop in average
price of 1.0% compared to 1Q05 reflects the adjustment in the
mix mentioned above.

The pork segment saw a 34.5% drop in volumes and a 5.5% drop in
revenues in the domestic market, compared to 2Q04. From 1Q05,
the change was positive, with a 6.8% increase in volumes and a
12.5% increase in revenues. The factor that most contributed to
this result was the stepping up of sales of products with higher
added value, such as specialty cuts.

The poultry line posted growth of 34.7% in volumes and 28.4% in
revenues, in relation to 2Q04. When compared to 1Q05, there was
a 15.9% drop in volumes, and a 12.9% drop in revenues. As it has
been doing for many years now, Sadia directs the brunt of its
production to the export market.

Sadia launched 18 new products in 2Q05, including the Petit
Gateau, which is part of the family of frozen desserts under the
Miss DaisyR brand, a line of soy based ready-to-serve foods
called Sadia Vita SojaR and SadilarR beef cuts.

Export Market

Sadia's export revenues rose 17.2% and volumes increased 22.4%
in relation to 2Q04, exceeding the 1Q05 levels by 17.3% and
13.0%, respectively. The recovery of prices in dollars in the
international market partially offset the less favorable
exchange rate for exporters. Among our new markets, highlights
include Romania and Bulgaria.

Poultry exports accounted for 69.3% of the Company's total
exports in 2Q05, increasing 10.9% over 2Q04, and with a 24.2%
increase in volume. Volumes exceeded 1Q05 figures by 12.7%, with
a 9.8% growth in revenues. The 10.7% drop in average prices in
Brazilian Reais was due to the greater sale of whole birds,
thanks to the heating up of business in the Middle East and
South America since the beginning of this year and the
devaluation of the U.S dollar. As far as poultry parts go, sales
to Japan were the major highlight.

Pork exports rose dramatically mostly as a result of renewed
Russian purchasing. The Company posted a 14.6% increase in
volume and a 32.6% in revenues, compared to 2Q04. In relation to
1Q05, volumes and revenues grew 65.5% and 67.1%, respectively.

The processed product segment enjoyed an 18.5% increase in
volumes and a 15.2% increase in revenues, compared to 2Q04. The
2.8% reduction in the average price is explained by the greater
levels of sales of products with a lower unitary value, such as
hot dogs and margarines, from one year to the next. Compared to
1Q05 results, the processed product line dropped 23.3% in terms
of volumes and experienced a substantially lower loss in
revenues, of 4.7%.

Operating Result

Sadia posted net revenues of R$1,801.9 million in 2Q05 - 16.7%
higher than in 2Q04. This significant increase in revenues was
due primarily to the larger volume sold and the trajectory of
prices practiced by the Company in the domestic market. When
comparing the net revenues from 2Q05 with those from 1Q05, the
increase was 9.8%, as a result of the growth of both export
volumes and revenues.

The drought which affected crops in the south of Brazil and the
review of estimates related to the North American soy harvest
were factors that put pressure on the prices of corn and soy in
2Q05

The ratio of sales expenses to net revenues held steady at 17.5%
in 1Q05 and 2Q05, showing a significant improvement over 2Q04,
when it was 18.6%.

Sadia's general and administrative expenses remained stable,
representing less than 1.0% of net revenues.

Expenses related to depreciation and amortization totaled R$44.8
million in 2Q05, close to the amount for the same period in
2004. Striving for the best accounting practices, Sadia has
reclassified the Poultry parent stock and Hog parent stock from
the inventory account to the property, plant and equipment
account.

Evolution of Gross Margin

Since the beginning of 2005, improvement in inventory management
and the partial passing along of costs to prices has enabled the
Company to improve the gross margin, which rose from 24.8% in
4Q04 to 25.6% in 1Q05 and 26.5% in 2Q05.

EBITDA

EBITDA reached R$193.4 million in 2Q05 - 20.6% higher than in
1Q05. This result reflects Sadia's efforts to improve its
profitability.

Financial Result

The Financial Policy of using hedge instruments generated
financial gains, reducing the negative effects of the exchange
rate upon export revenues.

Equity Pick-Up

The negative result in 2Q05 of R$139.5 million was due to the
recognition of a loss from the exchange variation of the
shareholders' equity in subsidiaries outside of Brazil.

Final Result

Sadia's net income in 2Q05 reached R$144.6 million - one of the
best results ever recorded in the Company's history, exceeding
the R$69.2 million posted in 2Q04 by 109% and the 1Q05 figure by
43.7%.

Capital Expenditures

The Company's investments totaled R$178.1 million in 2Q05,
compared to R$52.9 million in 2Q04. Of this amount, 26.6% were
directed towards the processed foods segment, 61.2% for poultry,
2.1% for pork, and the remaining 10.1% went primarily to the
information technology area. Sadia invested R$288.2 million in
1H05. The Company plans total investments of R$500 million in
2005.

Capital Markets and General Information

In the last 12 months, the Company's shares have appreciated
11.7%. The average daily financial volume rose from R$4.4
million to R$6.8 million, comparing 2Q04 with 2Q05.

Sadia continues to account for the largest part of trading in
the Brazilian food sector, with a 57.4% share.

The Sao Paulo Stock Exchange (BOVESPA)

Sadia's preferred shares remained evenly distributed among the
many categories of investors on the Bovespa. Most noteworthy of
these are foreign investors, which help to increase liquidity,
individuals and investment clubs.


The New York Stock Exchange (NYSE)
In the last 12 months, Sadia's Level II ADR's have appreciated
46.7%. The average daily trading volume went from US$227,300 in
2Q04 to US$474,100 in 2Q05.

Highlights

In July, for the fourth consecutive time, the British consulting
firm Interbrand named Sadia as the most valuable brand in the
Brazilian food sector. The study, carried out in connection with
the Brazilian magazine Isto E Dinheiro, listed the Company brand
as number 13 in the general rankings for the entire country.
Estimated at US$189 million, the Sadia brand has appreciated 21%
since 2004, boasting the highest increase among the 15 most
valuable brands in Brazil. According to Interbrand, the
Company's ability to innovate in the Brazilian food market was
the major factor behind this appreciation.

Also in July, The 3S Program won the Amcham Brasil Rio de
Janeiro Environmental Brazil Award in the category for Clean
Development Mechanisms, for the reduction of greenhouse gases.

With 70% of consumer votes, Sadia was elected the most trusted
brand in Ready-to-serve entrees category. The Sadia brand is
among the five most voted brands in terms of consumer trust,
considering 49 categories of products and services. The study
was conducted by Instituto Ibope Solutions, with a national
approach and published in the magazine Selecoes (Reader's
Digest). The study is traditional in Europe, Asia and North
America.

A DCI survey with owners and managers of bakeries conducted in
June and July 2005, named Sadia as the most admired supplier
among all supply categories, including beverages, cigarettes,
flour, and others. The qualities that the bakeries' most admired
were punctuality in supplier visits and deliveries, good
negotiation of prices and payment deadlines, and development of
sector's professional and customers.

Share Prices (8/1/05):
Sadia ON (SDIA3) - R$4,35
Sadia PN (SDIA4) - R$4,83
Sadia ADR (SDA) - US$20,35
Sadia Latibex (XSDI) - ?1,66

Market capitalization (8/1/05):
R$3,3 billion
US$1.4 billion

CONTACT: Sadia S.A.
         Director of Finance and Investor Relations
         Luiz Murat Jr.
         Phone: (55 11) 2113-3465
         Fax: (55 11) 2113-1785
         E-mail: grm@sadia.com.br

         Investor Relations
         Christiane Assis
         Phone : (55 11) 2113-3552
         E-mail: christiane.assis@sadia.com.br

         Silvia H. M. Pinheiro
         Phone : (55 11) 2113-3197
         E-mail: silvia.pinheiro@sadia.com.br

         Carlos Eduardo T. Araujo
         Phone : (55 11) 2113-3161
         E-mail: henrique.bastos@sadia.com.br

         IR Consultant
         Ligia Montagnani
         Phone: (55 11) 3897-6405
         E-mail: ligia.montagnani@firb.com

         URL: www.sadia.com


VARIG: Accounts for 3.5% of Boeing's Total Portfolio
----------------------------------------------------
The Boeing Company discloses in a Form 10-Q filing with the U.S.
Securities and Exchange Commission that at June 30, 2005, Viacao
Aerea Rio-Grandense accounted for $327,000,000 or 3.5% of
Boeing's total portfolio.

On June 17, 2005, VARIG filed a request for reorganization which
was granted on June 22, 2005 by Brazilian courts.  Under the
laws of Brazil, VARIG has 60 days from July 13, 2005, the date
the court order was published in the official gazette, to
present a reorganization plan.

As of June 18, 2005, Boeing says VARIG has resumed making rent
and maintenance reserve payments, except past due obligation
payments.

Boeing exercised early lease termination rights and took
possession of two MD-11 aircraft from VARIG in April 2005 in the
amount of $73,000,000.  The aircraft were subsequently sold to
another customer.

At June 30, 2005, the VARIG portfolio consisted of two 737
aircraft and seven MD-11 aircraft.

In recent years, VARIG has repeatedly defaulted on its
obligations under leases with Boeing, which has resulted in
deferrals and restructurings, some of which are ongoing.  Boeing
does not expect the VARIG transactions, including the impact of
any future restructurings, to have a material adverse effect on
its earnings, cash flows or financial position.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin
America. VARIG's principal business is the transportation of
passengers and cargo by air on domestic routes within Brazil and
on international routes between Brazil and North and South
America, Europe and Asia.  VARIG carries approximately 13
million passengers annually and employs approximately 11,456
full-time employees, of which approximately 133 are employed in
the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG: Taps Lufthansa Consulting as Restructuring Advisor
---------------------------------------------------------
Brazil's leading airline VARIG commissions the experts of
Lufthansa Consulting with the reorganization and restructuring
of the company.  The consultancy contract with a term of six
months was signed on 13 July 2005 in Rio de Janeiro.  A LCG
project team immediately started work on site.

VARIG filed an application for the protection of creditors at
the Bankruptcy Court analogous the U.S. legislation in Chapter
11.  In accordance with Brazilian law the carrier must develop
an appropriate restructuring plan within 60 days as well as the
related business plan and submit these to the Bankruptcy Court.

If the Court accepts the proposed plans, the implementation
phase must be completed within a maximum period of 120 days
thereafter. The project agreement with Lufthansa Consulting
provides for the support of the airline during this procedure,
which will be applied for the first time ever in Brazil.

"We were looking for a consultant with an in-depth understanding
of the industry, an interdisciplinary approach and strong
implementation skills in order to generate short-term
profitability gains, and long-term competitive advantages for
VARIG.  We have assigned the project to Lufthansa Consulting
because we believe they meet these criteria", stated Omar
Carneiro da Cunha, President of VARIG, during the contract
signing ceremony.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin
America. VARIG's principal business is the transportation of
passengers and cargo by air on domestic routes within Brazil and
on international routes between Brazil and North and South
America, Europe and Asia.  VARIG carries approximately 13
million passengers annually and employs approximately 11,456
full-time employees, of which approximately 133 are employed in
the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents the
carrier in Brazil

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 215/945-7000)



=========
C H I L E
=========

EDELNOR: Ratings Reflect Weak But Improving Financial Profile
-------------------------------------------------------------
Rationale

The ratings on Empresa Electrica del Norte Grande S.A. (Edelnor)
reflect the Chilean company's weak but improving financial
profile, partly offset by its diversified power generation base,
ownership of transmission assets, which represents a competitive
advantage in a highly competitive environment, and its 21%
equity stake in the Gasoducto Norandino pipeline, which provides
stable cash flow.

Edelnor operates in Chile's Northern Interconnected System
(SING), where about 40% of the nearly 2,600 MW of installed
generation capacity depends on natural gas (considering dispatch
restrictions imposed by the system's administrator to the
relatively large natural gas-fired capacity). The need to burn
coal or fuel oil as a result of gas supply shortages to gas-
fired power plants and the system's oversupply when natural gas
is available (peak demand reached 1,645 MW in 2004) subject
Edelnor to spot-price volatility, which affects about 50% to 60%
of its revenues.

Chilean thermal power generators have faced natural gas
shortages since the first quarter of 2004 because natural gas
supplies from Argentina are not enough to meet the growing
domestic demand. Natural gas shortages in the SING reached a
peak of about 3.5 million cubic meters per day in May 2004, from
a total consumption of about 6.5 million cubic meters per day
(including about 1.2 million cubic meters per day consumed by
the Termoandes power plant in Argentina and exported to Chile as
power). Standard & Poor's considers Edelnor's diverse power
generation base (47% coal and 35% natural gas and marginally
diesel oil, fuel oil, and hydro power) a competitive advantage,
because it grants higher supply reliability than its highly gas-
fired peers. In this sense, Standard & Poor's expects that even
if natural gas supply is fully interrupted in the SING,
Edelnor's relatively large coal-fired power generation capacity
(341 MW) will enable it to meet its relatively low level of
contracted sales. However, in that scenario, Edelnor will have
to serve its "ship-or-pay" agreements for natural gas
transportation with the Norandino pipeline and will face lower
margins because of the higher cost for running its coal-fired
generating units.

Edelnor's financial profile remains weak, but it is improving as
evidenced by adjusted funds from operations (FFO; including cash
flows from its 21%-owned Norandino pipeline) to total average
debt that reached 12% in fiscal 2004, which is weak in light of
Edelnor's volatile cash generation. However, adjusted FFO
interest coverage reached a solid 4.7x in fiscal 2004, although
it was partly due to the low interest rates that resulted from
the 2002 debt reorganization. Standard & Poor's expects a
positive trend until 2006, when it is projected to weaken
because the interest rate on the debt certificates will increase
according to the terms of the 2002 debt renegotiation (to 8.5%
in November 2012 from 4.0% in November 2005). In April 2005,
Edelnor repurchased debt certificates for about US$26 million of
nominal value, which should improve adjusted debt-service
coverage ratios to higher than originally projected levels. As a
result, Standard & Poor's expects Edelnor's adjusted FFO
interest coverage to reach about 2.5x to 3.5x, and adjusted FFO
to total average debt to reach about 15% in the 2006-2009
timeframe.

Edelnor is a partially integrated utility, mainly operating in
power generation and, to a lesser extent, transmission in
northern Chile. The company owns and operates generation
facilities with a total capacity of 688 MW, leases another 29 MW
of diesel units, and commercializes 3 MW of a hydraulic plant.
Edelnor also owns about 1,056 kilometers of transmission lines.
The company is 82.34%-owned by Inversiones Mejillones S.A., a
holding company owned by Belgium's Suez - Tractebel S.A., and
Chilean copper producer Corporaci˘n Nacional del Cobre de Chile
(foreign currency A/Stable/--; local currency A+/Negative/--).

Liquidity

Edelnor's adequate liquidity stems from its long-term and smooth
debt-maturity profile and low investment needs, but has weak
financial flexibility. As of March 31, 2005, the company had
US$39 million in cash and short-term investments, which was
mainly applied to the above-mentioned debt repurchase (US$26
million) in April 2005.

Edelnor completed a Chapter 11 reorganization on Nov. 5, 2002,
which replaced US$340 million in bank debt with US$217 million
15-year debt certificates and a $46 million subordinated
shareholder loan. The debt certificates carry a 4% coupon during
the first three years (with step-up rates from November 2005,
reaching 8.5% in November 2012) and amortize in 20 semiannual
US$10.9 million equal installments starting in May 2008.
Edelnor's limited financial flexibility results from its weak,
but improved, financial profile and certain restrictions on
incurring additional debt according to the terms of the
company's preexisting debt. Edelnor also must maintain a minimum
liquidity level of US$15 million, although this amount decreases
to US$4 million when considering a US$11 million credit line
granted by parent Inversiones Mejillones. Standard & Poor's does
not expect Edelnor to carry out significant capital expenditures
or distribute sizable dividends in the next five years. The
company is in compliance with its financial covenants.

Outlook

The stable outlook incorporates Standard & Poor's expectations
that Edelnor will not be affected by potential large natural gas
shortages to its natural gas-fired units because it will be able
to meet its power sales contracts with its coal-fired capacity.
Therefore, projected debt and interest coverage ratios should
not be significantly affected by large natural gas supply
shortages in the SING. If the effect of the crisis is
significant, however, Standard & Poor's could revise its
ratings. Nevertheless, the ratings could be raised if the
company's financial ratios continue improving and if the company
recovers access to the financial markets before its financial
debt comes due in May 2008.

Primary Credit Analyst: Sergio Fuentes, Buenos Aires
(54) 114-891-2131; sergio_fuentes@standardandpoors.com

Secondary Credit Analyst: Mariano Ingaramo, Buenos Aires
(54) 114-891-2124; mariano_ingaramo@standardandpoors.com



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

AOL LATIN AMERICA: Taps Cicerone Capital as Financial Advisors
--------------------------------------------------------------
America Online Latin America, Inc., and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware for
permission to retain and employ Cicerone Capital LLC as their
financial advisors.

The Debtors have employed Cicerone Capital since May 31, 2004,
as their financial advisors and is therefore familiar with their
businesses and financial affairs.

Cicerone Capital will:

a) assist the Debtors in identifying the target, sectors,
    region and quantity of business entities and assets in Latin
    America with respect to a potential sale of the Debtors, the
    Non-Debtor Foreign Subsidiaries or their respective assets;

b) advise and assist the Debtors in analyzing and evaluating
    the business, operations, properties, financial condition,
    major liabilities, prospects and potential synergies of the
     Debtors and any potential purchaser;

c) participate in discussions with the Company's directors,
    shareholders, suppliers and investment bankers and conduct
    management interviews, site visits, data analysis and due
    diligence of the Company and any potential purchaser;

d) review the documents related to any potential sale of the
    Debtors, the Non-Debtor Foreign Subsidiaries or their
    respective assets, and prepare a valuation analysis of the
    Debtors and any potential purchaser in connection with that
    potential asset sale; and

e) provide all other financial advisory services to the Debtors
    in connection with their chapter 11 cases.

Zain A. Manekia, a Managing Principal of Cicerone Capital,
reports that the Firm will be paid with:

1) a monthly Advisory Fee of $50,000;

2) in connection with a sale of American Online Latin America
    Inc., during the term of Cicerone's engagement or in a
    period of six months after the termination of the Engagement
    Letter:

    a) a Success Fee of not more than $1.2 million equal to
       the sum of 2% of the first $30 million of the Aggregate
       Transaction Value, plus 1.5% of the second $30 million of
       the Aggregate Transaction Value, plus 1% of the Aggregate
       Transaction Value of more than $60 million, and

    b) provided, however, that if a sale transaction for the
       sale of American Online Latin America is not consummated
       after the Company enters into a definitive agreement and
       it receives a Break-Up Fee as a result of the failure of
       that transaction, a fee equal to 10% of that Break-Up
       Fee;

3) in connection with a sale of the Non-Debtor Foreign
    Subsidiaries, during the term of Cicerone's engagement or in
    a period of six months after the termination of the
    Engagement Letter:

    a) a Success Fee of not more than $1 million per transaction
       or a series of related transactions with one or more
       related acquirers, equal to the sum of 2% of the first
       $30 million of the Aggregate Transaction Value, plus 1.5%
       of the second $30 million of the Aggregate Transaction
       Value, plus 1% of the Aggregate Transaction Value of more
       than $60 million, and

    b) provided, however, that if a sale transaction for the
       sale of American Online Latin America is not consummated
       after the Company enters into a definitive agreement and
       it receives a Break-Up Fee as a result of the failure of
       that transaction, a fee equal to 10% of that Break-Up
       Fee; and

4) in connection with a sale of AOL Brazil during the term of
    the engagement of Cicerone or in a period of six months
    after the termination of the Engagement Letter, a Success
    Fee of $100,000 if AOL Brazil is sold for $33 million, and
    additional compensation if AOL Brazil is sold for more than
    $33 million.

Cicerone Capital assures the Court that it does not represent
any interest materially adverse to the Committee, the Debtors or
their estates.

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


AOL LATIN AMERICA: Seeks More Time to File Schedules, Statements
----------------------------------------------------------------
America Online Latin America, Inc., and its debtor-affiliates
ask the U.S. Bankruptcy Court for the District of Delaware for
more time to file their Schedules of Assets and Liabilities,
Statements of Financial Affairs and Statements of Executory
Contracts and Unexpired Leases.  The Debtors want until Aug. 29,
2005, to file those documents.

The Debtors explain that they are currently mobilizing their
employees in working diligently to assemble and prepare the
necessary information for the Schedules and Statements so they
can file those documents on or before the requested deadline.

The Court will convene a hearing at 11:30 a.m., on Aug. 29,
2005, to consider the Debtors' request.  By application of Rule
9006-2 of the Local Rules of Bankruptcy Practice and Procedures
of the U.S. Bankruptcy Court for the District of Delaware, the
Debtors' lease decision extension deadline is automatically
extended through the conclusion of the Aug. 29, 2005, hearing.
Headquartered in Fort Lauderdale, Florida, America Online Latin
America offers AOL-branded Internet service in Argentina,
Brazil, Mexico, and Puerto Rico, as well as localized content
and online shopping over its proprietary network.  The Company
and three of its affiliates filed for chapter 11 protection on
June 24, 2005 (Bankr. D. Del. Case No. 05-11778 through 05-
11781). Douglas P. Bartner, Esq., at Shearman & Sterling LLP and
Edmon L. Morton, Esq., Margaret B. Whiteman, Esq., and Pauline
K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$28,500,000 in total assets and $181,774,000 in total debts.


BALLY TOTAL: Court Upholds Arbitration Award
--------------------------------------------
Bally Total Fitness Holding Corporation (NYSE: BFT) announced
Thursday that a Federal District Court in the Northern District
of Illinois has confirmed an arbitration award of approximately
$14.3 million and entered a judgment against the Company. This
matter, which has been previously disclosed, relates to a
contractual dispute arising from a program of transferring
membership receivables balances into a credit card program. The
Company is currently exploring all of its options with respect
to the court's decision.

The Company does not believe the judgment would result in a
default under its $275 million secured credit facility until 30
days from the entry of the judgment. Additionally, the Company
does not believe the judgment would result in a default under
the indentures governing the Company's public bonds unless 60
days have passed or an enforcement proceeding is commenced with
respect to the judgment, which under the applicable federal
rules could occur as early as August 12, 2005.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers, with approximately four
million members and 440 facilities located in 29 states, Mexico,
Canada, Korea, China and the Caribbean under the Bally Total
Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle
Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R)
brands. With an estimated 150 million annual visits to its
clubs, Bally offers a unique platform for distribution of a wide
range of products and services targeted to active, fitness-
conscious adult consumers.

CONTACT: Bally Total Fitness Holding Corporation
         Matt Messinger
         Phone: 773-864-6850
         URL: www.ballyfitness.com
                   or
         MWW GROUP
         Carreen Winters
         Phone: 201-507-9500


DIRECTV GROUP: Swings to Profit in the 2Q05
-------------------------------------------
The DIRECTV Group, Inc. (NYSE:DTV) reported Thursday second
quarter net income of $162 million, compared with a net loss of
$13 million last year, and operating profit of $312 million,
compared with an operating loss of $28 million in the same
period of 2004. In addition, revenues increased 21% to $3.19
billion, and operating profit before depreciation and
amortization(1) of $523 million more than tripled compared to
last year's second quarter.

"Our second quarter results are indicative of the substantial
profit and cash-generating potential of DIRECTV U.S.," said
Chase Carey, president and CEO. "The 34% increase in revenues
to $3.0 billion and the nearly tripling of operating profit
before depreciation and amortization to over $500 million at
DIRECTV U.S. are a reflection of our profitable growth strategy
to drive strong subscriber and ARPU growth while also
increasing margins through improved cost management,
particularly in key areas such as subscriber acquisition and
upgrade/retention marketing."

Carey continued: "With 964,000 gross subscriber additions in
the quarter, demand for DIRECTV continues to be strong.
Importantly, with the stricter credit screening policy that we
implemented at the beginning of the second quarter, we are now
attaining subscribers with improved credit profiles. However,
DIRECTV's net subscriber additions of 225,000 were lower due to
a disappointing average monthly churn rate in the quarter of
1.69% primarily resulting from an increase in involuntary churn
of high-risk customers attained over the last several quarters.
With our new credit policy and other recent actions taken to
improve the credit worthiness of new subscribers, we believe we
will drive churn lower beginning in the fourth quarter of this
year."

Carey concluded: "Looking ahead over the next few months, we
are excited about several important initiatives that we believe
will extend DIRECTV's leadership in the video marketplace,
including a more exciting NFL SUNDAY TICKET(TM) package, the
introduction of our more advanced digital video recorder and
the roll-out of several markets with high-definition local
television."

Second Quarter Review

THE DIRECTV GROUP'S OPERATIONAL REVIEW

In the second quarter of 2005, The DIRECTV Group's revenues of
$3.19 billion increased 21%, compared to the second quarter of
2004, driven principally by strong DIRECTV U.S. subscriber
growth, the consolidation of the full economics of the former
National Rural Telecommunications Cooperative (NRTC) and
Pegasus Satellite Television (Pegasus) subscribers acquired in
the third quarter of 2004, and strong average monthly revenue
per subscriber (ARPU) growth at DIRECTV U.S. These changes were
partially offset by lower revenues at Hughes Network Systems
(HNS) due to the sale of certain HNS business units.

                            Three Months         Six Months
The DIRECTV Group          Ended June 30,      Ended June 30,
                          -----------------   -----------------
                           2005      2004      2005      2004
  ---------------------   -------   -------   -------   -------
Revenues ($M)             $3,188    $2,643    $6,336    $5,136
  ---------------------   -------   -------   -------   -------
Operating Profit Before
Depreciation and Amortization
($M)                        523       143       681       233
  ---------------------   -------   -------   -------   -------
Operating Profit (Loss) ($M) 312       (28)      257      (125)
  ---------------------   -------   -------   -------   -------
Net Income (Loss) ($M)       162       (13)      120      (652)
  ---------------------   -------   -------   -------   -------
Net Income (Loss) Per Common
Share ($)                  0.12     (0.01)     0.09     (0.47)
  ---------------------   -------   -------   -------   -------

The significant increase in operating profit before
depreciation and amortization to $523 million was primarily due
to the aforementioned increased revenues combined with higher
DIRECTV U.S. operating margin, resulting primarily from the
stabilizing of costs in key areas such as subscriber
acquisition and upgrade and retention marketing, as well as a
$28 million gain recorded for the sale of the DIRECTV Latin
America subscribers in Mexico. Also impacting the comparison
were charges in the 2004 period for $60 million related to
stock-based compensation expense, severance and employee
retention plans. Operating profit of $312 million improved due
to the higher operating profit before depreciation and
amortization, partially offset by higher amortization expense
at DIRECTV U.S., resulting from intangible assets recorded as
part of the NRTC and Pegasus transactions.

Net income of $162 million in the second quarter of 2005
improved due to the increased operating profit discussed above
and a $31 million tax credit (recorded in "Income (loss) from
discontinued operations, net of taxes" in the Consolidated
Statements of Operations) related to the favorable settlement
of a U.S. federal income tax dispute associated with a
previously divested business. These improvements were partially
offset by a second quarter 2005 charge of $65 million related
to the premium paid for the redemption of senior notes and the
write-off of a portion of deferred debt issuance costs
resulting from the recent debt refinancing (recorded in "Other,
net" in the Consolidated Statements of Operations), as well as
higher income tax expense associated with the higher pre-tax
income in the most recent period.

Year-To-Date Review

In the first half of 2005, The DIRECTV Group's revenues of
$6.34 billion increased 23%, compared to the same period of
2004, driven principally by strong DIRECTV U.S. subscriber
growth, the consolidation of the full economics of the former
NRTC and Pegasus subscribers, and strong ARPU growth at DIRECTV
U.S. These changes were partially offset by lower revenues at
HNS due to the sale of certain HNS business units.

The nearly three-fold increase in operating profit before
depreciation and amortization to $681 million in the first six
months of 2005 was primarily due to the increased DIRECTV U.S.
revenues discussed above combined with higher operating
margins, resulting primarily from the stabilizing of costs in
key areas such as subscriber acquisition and upgrade and
retention marketing. Also impacting the comparison were charges
in the 2004 period of $120 million related to severance, stock-
based compensation expense and employee retention plans. The
improved operating profit of $257 million was due to the higher
operating profit before depreciation and amortization,
partially offset by higher amortization expense at DIRECTV U.S.
resulting from intangible assets recorded as part of the NRTC
and Pegasus transactions.

First half 2005 net income of $120 million was improved due to
the higher operating profit discussed above, lower 2005 income
tax expense primarily due to a decrease in pre-tax income, and
two non-cash after-tax charges included in the 2004 results:
$499 million primarily related to the sale of PanAmSat
(reflected in "Income (loss) from discontinued operations, net
of taxes") and $311 million resulting from a change in The
DIRECTV Group's method of accounting for subscriber
acquisition, upgrade and retention costs (reflected in
"Cumulative effect of accounting change, net of taxes" in the
Consolidated Statements of Operations). These changes were
partially offset by a first quarter 2004 pre-tax gain of $387
million related to the sale of approximately 19 million shares
of XM Satellite Radio (recorded in "Other, net" in the
Consolidated Statements of Operations), higher net interest
expense in 2005 primarily related to higher average debt
balances and a reduction in the amount of capitalized interest,
a second quarter 2005 charge of $65 million related to the
premium paid for the redemption of senior notes, and the write-
off of a portion of deferred debt issuance costs from the
recent debt refinancing, as well as a $43 million pre-tax gain
that primarily resulted from the restructuring of certain
contracts in connection with the February 2004 completion of
DIRECTV Latin America LLC bankruptcy proceedings.

SEGMENT FINANCIAL REVIEW

DIRECTV U.S. Segment

Beginning in the fourth quarter of 2004, DIRECTV U.S. reports
its current and prior period subscribers and churn on a total
platform basis and no longer separately reports subscribers and
churn for the former NRTC and Pegasus territories. These
changes resulted from DIRECTV U.S.' purchase of 1.4 million
Pegasus and NRTC member subscribers and certain related assets
completed in the third quarter of 2004.

                            Three Months         Six Months
DIRECTV U.S.               Ended June 30,      Ended June 30,
                        -----------------   -----------------
                          2005      2004      2005      2004
  -------------------   -------   -------   -------   -------
Revenue ($M)             $2,961    $2,217    $5,761    $4,298
  -------------------   -------   -------   -------   -------
Average Monthly Revenue per
Subscriber (ARPU) ($)    67.79     65.01     66.91     64.31
  -------------------   -------   -------   -------   -------
Operating Profit Before
Depreciation and Amortization
($M)                      505       175       720       320
  -------------------   -------   -------   -------   -------
Operating Profit ($M)      333        63       372        85
  -------------------   -------   -------   -------   -------
Free Cash Flow(1) ($M)     127      93(2)      151    (74)(2)
  -------------------   -------   -------   -------   -------
Subscriber Data(3):
  -------------------   -------   -------   -------   -------
Gross Platform Subscriber
Additions (000's)          964       984     2,101     1,934
  -------------------   -------   -------   -------   -------
Average Monthly Platform
Subscriber Churn         1.69%     1.49%     1.59%     1.46%
  -------------------   -------   -------   -------   -------
Net Platform Subscriber
Additions (000's)          225       409       730       828
  -------------------   -------   -------   -------   -------
Cumulative Subscribers
(000's)                 14,670    13,040    14,670    13,040
  -------------------   -------   -------   -------   -------

- Includes $200 million of cash received for a set-top receiver
supply and development agreement with Thomson.
- The amounts presented for 2004 and 2005 include the results
from the former NRTC and Pegasus territories.

DIRECTV U.S. gross subscriber additions of 964,000 were
slightly lower than the same period a year ago primarily due to
more stringent credit policies implemented at the beginning of
the quarter. Average monthly churn in the quarter increased to
1.69% primarily due to higher involuntary churn from customers
with lower credit scores due in part to the significant
increase in gross subscriber additions over the past several
quarters, and a more competitive marketplace. After accounting
for this churn, DIRECTV U.S. added 225,000 net subscribers in
the quarter. Over the past twelve months, the cumulative number
of DIRECTV subscribers increased 13% to 14.67 million.

DIRECTV U.S. generated quarterly revenues of $2.96 billion, an
increase of 34% compared to last year's second quarter
revenues. The increase was primarily due to continued strong
subscriber growth, the consolidation of the full economics of
the former NRTC and Pegasus subscribers, and higher ARPU. ARPU
increased over 4% to $67.79 from the same period last year
principally due to programming package price increases, higher
mirroring fees from an increase in the average number of set-
top receivers per customer and an increase in the percentage of
subscribers purchasing local channels. These ARPU improvements
were partially offset by the impact from the consolidation of
the former NRTC and Pegasus subscribers, primarily due to the
lower ARPU received from these subscribers.

Operating profit before depreciation and amortization nearly
tripled to $505 million and operating profit increased by a
factor of five to $333 million compared to last year's second
quarter due to the increase in DIRECTV U.S. revenues combined
with higher operating margins primarily resulting from the
stabilizing of costs in key areas such as subscriber
acquisition and upgrade and retention marketing. Operating
profit was negatively impacted by higher amortization expense
resulting from intangible assets recorded as part of the NRTC
and Pegasus transactions.

DIRECTV Latin America Segment

On October 11, 2004, The DIRECTV Group announced a series of
transactions with News Corporation, Grupo Televisa, Globo and
Liberty Media that are designed to strengthen the operating and
financial performance of DIRECTV Latin America by consolidating
the Direct-To-Home (DTH) platforms of DIRECTV Latin America and
Sky into a single platform in each of the major territories
served in the region. In aggregate, The DIRECTV Group is paying
approximately $580 million in cash for the News Corporation and
Liberty Media equity stakes in the Sky platforms, of which
approximately $398 million was paid in October 2004, with the
remaining amount expected to be paid in 2006.

In Mexico, DIRECTV Latin America's local operating company is
in the process of closing its operations and migrating its
subscribers to Sky Mexico. Since the transactions were
announced, 141,000 subscribers have been migrated to Sky
Mexico, including 38,000 in the second quarter. As of June 30,
2005, DIRECTV Latin America's affiliate in Mexico had
essentially completed the subscriber migration process. In the
second quarter, DIRECTV Latin America booked a non-cash gain of
$28 million related to the successful migration and retention
of a portion of the Mexico subscribers and expects to book
gains of up to $40 million in the second half of 2005 as
additional migrated subscribers meet the retention requirements
of the agreement. At the close of the transaction -- which is
expected to occur in early 2006 -- an additional non-cash gain
of up to $63 million is expected to be recognized.

In Brazil, DIRECTV Brasil and Sky Brasil have agreed to merge,
with DIRECTV Brasil customers migrating to the Sky Brasil
platform. The transactions in Brazil are subject to local
regulatory approval, which has not yet been granted. In the
rest of the region, The DIRECTV Group effectively acquired
Sky's DTH satellite platforms in Colombia and Chile, resulting
in the addition of approximately 89,000 subscribers in 2004.
DIRECTV Latin America is in the process of migrating Sky Chile
subscribers to the DIRECTV Latin America platform. In Colombia,
the transaction is subject to regulatory approval, which is in
the process of being finalized.

                              Three Months       Six Months
DIRECTV Latin America        Ended June 30,    Ended June 30,
                            ---------------   ---------------
Dollars in Millions          2005     2004     2005     2004
  -----------------------   ------   ------   ------   ------
Revenue                      $184     $167     $367     $330
  -----------------------   ------   ------   ------   ------
Operating Profit Before
Depreciation and
Amortization(1)               45       30       68       46
  -----------------------   ------   ------   ------   ------
Operating Profit (Loss)(1)      4      (16)     (10)     (47)
  -----------------------   ------   ------   ------   ------
Net Subscriber Additions(2)
(000's)                       45       24       74       41
  -----------------------   ------   ------   ------   ------
Cumulative Subscribers(3)
     (000's)                1,519    1,538    1,519    1,538
  -----------------------   ------   ------   ------   ------

(1) 2005 results include a $28 million gain related to the
successful migration of a portion of DIRECTV Latin America
subscribers in Mexico to Sky Mexico.
(2) Excludes Mexico.
(3) Includes Mexico; however, as of June 30, 2005, there were
no
    remaining DIRECTV Latin America subscribers in Mexico.

In the second quarter of 2005, excluding Mexico, DIRECTV Latin
America added 45,000 net subscribers. Revenues for DIRECTV
Latin America increased 10% to $184 million in the quarter
mostly due to a larger subscriber base in Argentina, Venezuela,
Brazil and Puerto Rico, as well as the consolidation of Sky
Chile and Sky Colombia, partially offset by lower revenues due
to the ongoing shut-down of DIRECTV Latin America's operations
in Mexico. The increase in second quarter 2005 operating profit
before depreciation and amortization to $45 million and
operating profit to $4 million was primarily attributable to
the aforementioned $28 million non-cash gain recorded for the
sale of DIRECTV Latin America's subscribers in Mexico, as well
as the operating profits associated with the increased revenues
discussed above. These improvements were partially offset by
the effects of the shutdown process in Mexico. The operating
profit also reflects reduced depreciation principally due to a
fourth quarter 2004 write-down of assets in Mexico.

                 Network Systems Segment

                                Three Months     Six Months
HNS                                 Ended           Ended
                                   June 30,        June 30,
                               -------------   -------------
Dollars in Millions            2005    2004    2005    2004
  --------------------------   -----   -----   -----   -----
Revenue                         $45    $364    $211    $681
  --------------------------   -----   -----   -----   -----
Operating Loss Before Depreciation and
Amortization                   (8)    (21)    (61)    (18)
  --------------------------   -----   -----   -----   -----
Operating Loss                  (8)    (37)    (61)    (52)
  --------------------------   -----   -----   -----   -----

On April 22, 2005, The DIRECTV Group completed the sale of a
50% interest in HNS LLC, an entity that owns substantially all
of the remaining assets of HNS, to SkyTerra Communications,
Inc., an affiliate of Apollo Management, L.P., which is a New
York-based private equity firm. At the close of the
transaction, The DIRECTV Group received $246 million in cash
and 300,000 shares of SkyTerra common stock valued at about $11
million. As of the date of the sale, The DIRECTV Group no
longer consolidates the results of HNS and accounts for 50% of
HNS' net income or loss as part of "Other, net" in the
Consolidated Statements of Operations. However, as previously
disclosed, The DIRECTV Group expects to take pension-related
charges of up to $14 million in the second half of 2005.

Second quarter 2005 revenue declined to $45 million principally
due to the sale of HNS discussed above. The change in operating
loss before depreciation and amortization and operating loss
were mostly due to charges in 2004 totaling $19 million related
to severance costs associated with the June 2004 sale of HNS'
set-top box business to Thomson and an inventory write-down.

               CONSOLIDATED BALANCE SHEET AND CASH FLOW

The DIRECTV Group                   June 30,      December 31,
                                      2005           2004
  ------------------------------------------------------------
Cash, Cash Equivalents & Short-Term
Investments ($B)                    $4.05         $2.83
  ------------------------------------------------------------
Total Debt ($B)                       3.42          2.43
  ------------------------------------------------------------
Net Debt (Cash) ($B)                 (0.63)        (0.40)
  ------------------------------------------------------------
Free Cash Flow(1) ($M)                (103)         (795)
  ------------------------------------------------------------

The DIRECTV Group's consolidated cash and short-term investment
balance increased by $1.22 billion to $4.05 billion and total
debt increased by $988 million to $3.42 billion, compared to
the December 31, 2004, balances due primarily to the recent
debt refinancings discussed below. Also impacting the change in
the cash balance was the proceeds from the sale of businesses
and investments.

In April 2005, DIRECTV U.S. entered into a new senior secured
credit facility. The new facility consists of a $1.5 billion
eight-year Term Loan B (subsequently reduced to $1.0 billion,
as described below), and a $500 million six-year Term Loan A
(both of which are fully funded), as well as a $500 million
undrawn six-year revolving credit facility. The interest rate
on each of the term loans is currently LIBOR plus 1.50% per
annum. The proceeds of the term loans were used to repay an
existing $1.0 billion senior secured loan and pay related
financing costs, with the remaining proceeds to be used for
general corporate purposes.

In addition, DIRECTV U.S. redeemed $490 million, plus interest
and a redemption premium, of its 8 3/8% senior notes in May
2005. In June, DIRECTV U.S. raised an additional $1 billion in
6 3/8% senior notes, of which $500 million of the proceeds was
used to pay down the new Term Loan B discussed above and $500
million remains available for general corporate purposes.

To see financial statements:
http://bankrupt.com/misc/DirecTV.htm

CONTACT: The DIRECTV Group, Inc.
         Media Contact: Bob Marsocci, 310-964-4656
         Investor Relations: 212-462-5200


GRUPO MEXICO: Planned Aug. 12 Strike Could be Extended to 2 Days
----------------------------------------------------------------
An estimated 4,000 workers at the Mexican copper giant Grupo
Mexico's facilities in northern Sonora may extend to two days a
strike scheduled for Aug. 12, says Dow Jones Newswires reports.

The workers had originally planned to hold a one-day stoppage to
support strikers at Asarco, Grupo Mexico's unit.

However, Rene Cordova, deputy head of the Mexican Miners' and
Metalworkers' Union at the Cananea mine, said that the Mexican
units are ready to extend the strike by one day if Asarco
workers, who have been on strike since early July, don't make
progress in their talks.

The two sides are scheduled to meet again in the U.S. on Aug.
12, on the day the Mexican workers will make their solidarity
one-day strike with the U.S. workers.

Meanwhile, the union spokesman also said that the estimated
1,500 workers affiliated with the union at the Cananea copper
mine are threatening to go on strike Aug. 27 unless company
officials there accept demands for pay and bonus rises. Talks
between the Cananea union workers and Grupo Mexico are set to
start Aug. 13, he said.

CONTACT:  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: http://www.gmexico.com


HYLSA: Rating Reflects Aggressive Dividend Policy
-------------------------------------------------

ISSUER CREDIT RATING
Corporate Credit Rating - BB-/Stable/--

AFFIRMED RATING

Senior unsecured foreign currency debt - BB-

Rationale

The ratings on Mexican steel producer Hylsa S.A. de C.V. (Hylsa)
reflect the company's somewhat aggressive dividend policy, the
challenges posed by industry cyclicality, very competitive steel
markets, the high percentage of spot sales to total sales, and
relative exposure to the construction industry. The ratings also
reflect Hylsa's backward integration, its improved balance sheet
due to debt reduction during 2004 and first-half 2005, and its
position as one of the largest steel makers in Mexico.

On May 18, 2005, Alfa S.A. de C.V., Hylsamex's majority
shareholder, announced that it had accepted the offer from
Techint to buy Hylsamex. On June 26, 2005, Industrial
Investments Inc. and Siderar S.A.I.C. launched a tender offer to
acquire all outstanding shares of Hylsamex; the offer will
expire on Aug. 16, 2005. Although Standard & Poor's Ratings
Services has not met with the new owners, we do not anticipate
any significant changes for either management or financial
policy.

Hylsa's dividend policy for the next two years could be defined
as aggressive. The company's dividends in 2005 and 2006 will be
about US$130 million and US$80 million. However, we also
considered that the strong cash flow generation allows the
company to cover these dividends without endangering Hylsa's
current financial profile. From 2007 on, we anticipate a US$20
million dividend per year, but new shareholders could change the
company's dividend policy.

As of June 30, 2005, Hylsa's performance has been solid. The
EBITDA margin for the 12 months ended June 30, 2005, was 33.4%,
which is slightly less than that of 2004, but remains strong
compared with that of its peers. We expect Hylsa's EBITDA margin
in 2005 to be between 28% and 30%. Moreover, the interest
coverage ratio and total debt-to-EBITDA ratios had performed
better than they had the past year (10.6x and 0.6x,
respectively, compared with 9.8x and 0.7x, respectively). Both
ratios benefited from debt reduction and lower interest
expenses. Nevertheless, a high percentage of Hylsa's sales are
under spot price that increases exposure to the volatile steel
spot market.

Although Hylsa's numbers remained strong during first-half 2005,
they have decreased from their peak in third-quarter 2004. We
believe that the Mexican steel industry will continue to take
advantage of strong world demand, especially from China, which
also has been the main reason for the fast increase in raw
material costs. Current market conditions favor Hylsa's business
model of backward integration into iron ore and its capacity to
switch between steel scrap and direct-reduced iron in the steel-
making process.

Hylsa, the second-largest producer of flat steel in Mexico
(three million metric tons), is vertically integrated and has
low-cost production. In 2004, the company's revenues were $1.9
billion, and it sold 2.9 million tons of steel.

Liquidity

Hylsa's liquidity is adequate. The company had $57 million in
cash as of June 30, 2005, and a three-year committed credit line
of $60 million. Additionally, we anticipate Hylsa will generate
free operating cash flow of more than $250 million in 2005.
Maturities for the rest of 2005 and 2006 are $18 million and $39
million, respectively. We do not expect Hylsa to have problems
covering obligations. Hylsa is comfortably in compliance with
financial covenants established under its loan agreements.

Outlook

The outlook is stable. The ratings could be raised over time if
Hylsa improves its business profile by increasing its value-
added mix and maintains low debt levels even through the
downside of the cycle. The ratings could be lowered if improved
financial performance is not sustainable, leverage increases
significantly, or dividend payments are higher than expected.

Primary Credit Analyst: Juan P Becerra, Mexico City
(52) 55-5081-4416; juan_becerra@standardandpoors.com

Secondary Credit Analyst: Jose Coballasi, Mexico City
(52)55-5081-4414; jose_coballasi@standardandpoors.com


MEXICANA DE AVIACION: Iberia Awaiting Sale Prospectus
-----------------------------------------------------
Iberia Lineas Aereas de Espana SA is interested in taking part
in the privatization of carrier Mexicana de Aviacion, Dow Jones
Newswires suggests.

However, an Iberia spokeswoman said Thursday that the Spanish
airline won't finalize its decision until it has seen the
prospectus detailing conditions for the carrier's privatization.

Spain's top airline has formally requested the prospectus. It
will then analyze the sale conditions before deciding if it will
bid for Mexico's No. 1 carrier in terms of international
destinations.

Mexican airline holding company Cintra SA has extended deadlines
for investors interested in acquiring shares in Mexicana and
AeroMexico to Aug. 9.

Bidders need to be approved by Cintra to receive the sale terms
of the country's flagship carriers, which will be sold
separately.

Foreigners will be limited to minority stakes and must partner
with Mexican investors in order to participate. Cintra is hoping
to sell at least 51% of each carrier by the end of the year.

Credit Suisse First Boston (CSR) is managing the sale.

CONTACT: Cintra S.A. de C.V.
         Av Xola 535 piso 16 col. del Valle Mexico
         Phone: (5)448 - 8000
         E-mail: infocintra@cintra.com.mx
         Web site: http://www.cintra.com.mx


SATELITES MEXICANOS: S. Maza Files Sec. 304 Petition in S.D.N.Y.
----------------------------------------------------------------
Sergio Autrey Maza, the foreign representative appointed in
Satelites Mexicanos, S.A. de C.V.'s Mexican bankruptcy
proceedings, filed a Section 304 petition in the U.S. Bankruptcy
Court for the Southern District of New York on Aug. 4, 2005. Mr.
Maza filed the petition to enjoin U.S. creditors from
commencing, continuing or enforcing any action against the
Debtor's estates, or otherwise disrupting Satmex's concurso
mercantil proceeding in Mexico.

Mr. Maza is also the Debtor's acting Chief Executive Officer and
Chairman of the Board of Directors.

The Debtor is the subject of an involuntary chapter 11 petition
filed by a group of secured and unsecured noteholders with the
U.S. Bankruptcy Court for the Southern District of New York on
May 25, 2005.

The petitioning creditors are members of an ad hoc committee of
holders of Satmex's Senior Secured Floating Rate Notes due 2004
and 10-1/8% Senior Notes due 2004.  The Ad Hoc Noteholders
Committee and the Ad Hoc Bondholders Committee collectively hold
more than $385 million of Satmex's outstanding debt.

                     Settlement Agreement

The Sec. 304 petition is part of the settlement agreement
reached between the Debtor and the group of petitioning secured
and unsecured noteholders regarding the noteholders' involuntary
petition and Satmex's motion to dismiss the petition on
jurisdictional grounds.

Under the terms of the agreement, the noteholders will withdraw
their involuntary chapter 11 petition upon the commencement of
the Sec. 304 proceeding.

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
property.

Under the terms of the agreement in principle, 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 Oct. 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.

                     Principal Indebtedness

Satmex's principal indebtedness includes:

     (i) $320 million in principal amount of high yield bonds
         due November 2004, issued on Feb. 2, 1998, between
         Satmex and The Bank of New York as Indenture Trustee;
         and

    (ii) $203.4 million in principal amount of senior secured
         floating rate notes due June 2004, issued on March 4,
         1998, between Satmex and Citibank, N.A., as Indenture
         Trustee.

As of May 25, 2005, the full principal amount and certain
accrued and unpaid interest remained outstanding on the high
yield bonds and the floating rate notes.

                       Menoscabo Default

In 1997, Firmamento Mexicano, S. de R.L. de C.V., a joint
venture between Loral Space & Communication, Ltd., and
Principia, S.A. de C.V., consummated an acquisition of 75% of
the then-issued outstanding capital stock of Satmex from the
Mexican government. As a result, Satmex became a wholly owned
direct subsidiary of Servicios Corporativos Satelitales, S.A. de
C.V., which is in turn a wholly owned subsidiary of Firmamento.
The remaining 25% of Satmex's outstanding capital stock, at the
time, was retained by the Mexican government.

In connection with the purchase, Servicios agreed to pay the
Mexican government $125.1 million plus interest, which is
reflected in a promissory note referred to as a Menoscabo.
Payment of the Menoscabo is secured by Loral's and Principia's
interests in Firmamento.  The Mexican government, which
currently owns 23.57% of Satmex's outstanding common stock,
indirectly holds a security interest in another 70.71% equity
interest in Satmex as collateral securing the Menoscabo.

On Sept. 30, 2003, Servicios defaulted on the Menoscabo debt.
As a result of the default, the Mexican government could
initiate proceedings against Servicios, which may include
foreclosure on the Firmamento equity and possibly transfer of
that equity.  The Menoscabo default also constituted a default
under the indentures.

                  Mexican Bankruptcy Proceedings

The Debtor filed a voluntary concurso mercantil in the Second
Federal District Court for Civil Matters for hte Feeral District
of Mexico City on June 29, 2005.  Following the petition, the
Mexican Bankruptcy Court entered an order:

     (i) staying any foreclosure proceeding against the rights
         and assets of Satmex and prohibiting Satmex from
         transferring its valuables or funds to third parties;
         and

    (ii) prohibiting Satmex from disposing or encumbering its
         main properties or assets.

Headquartered in Mexico, Satelites Mexicanos, S.A. de C.V.,
derives over 50% of its revenues from United States business,
and all of the Company's over US$500 million in debt was issued
in the United States and is governed by New York law.  The
Company's largest shareholder, Loral Space & Communications
Ltd., is a United States public company also undergoing a
Chapter 11 reorganization in the U.S. Bankruptcy Court for the
Southern District of New York.

The Company is forced into chapter 11 by a group of secured and
unsecured noteholders on May 25, 2005 (Bankr. S.D.N.Y. Case No.
05-13862).  The noteholders are represented by Wilmer Cutler
Pickering Hale and Dorr LLP and Akin Gump Strauss Hauer & Feld
LLP.  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.

On June 29, 2005, the Debtor filed a voluntary concurso
mercantile to restructure under Mexican laws, and later moved to
dismiss the involuntary Chapter 11 petition in the U.S.

Sergio Autrey Maza, in his capacity as the foreign
representative appointed in Satmex's Mexican proceeding, filed a
Sec. 304 petition on Aug. 4, 2005 (Bankr. S.D.N.Y. Case No. 05-
16103). Matthew Scott Barr, Esq., at Milbank, Tweed, Hadley &
McCloy LLP, represents Mr. Maza.  As of May 31, 2005, the Debtor
reports $900 million in total assets and $688 million in total
debts. (Troubled Company Reporter, Friday, August 05, 2005, Vol.
9, Issue No. 184)


SATELITES MEXICANOS: Issues Section 304 Petition Summary
--------------------------------------------------------
Petitioner: Sergio Autrey Maza
            Foreign Representative
            Chief Executive Officer and
            Chairman of the Board of Directors of Satmex

Debtor: Satelites Mexicanos, S.A. de C.V.
        Boulevard Manuel Avila Camacho No. 40
        Colonia Lomas de Chapultepec
        11000, Mexico, D.F., Mexico

Case No.: 05-16103

Type of Business: Satelites Mexicanos is the leading
                  provider of fixed satellite services in Mexico
                  and is expanding its services to become a
                  leading provider of fixed satellite services
                  throughout Latin America.  Satmex provides
                  transponder capacity to customers for
                  distribution of network and cable television
                  programming and on-site transmission of live
                  news reports, sporting events and other video
                  feeds.  Satmex also provides satellite
                  transmission capacity to telecommunications
                  service providers for public telephone
                  networks in Mexico and elsewhere and to
                  corporate customers for their private business
                  networks with data, voice and video
                  applications, as well as satellite internet
                  services. See http://www.satmex.com/

                  The Debtor is an affiliate of Loral Space &
                  Communications Ltd. which filed for chapter 11
                  protection on July 15, 2003 (Bankr. S.D.N.Y.
                  Case No. 03-41710).

                  Some holders of prepetition debt securities
                  filed an involuntary chapter 11 petition
                  against the Debtor on May 25, 2005 (Bankr.
                  S.D.N.Y. Case No. 05-13862).

Section 304 Petition Date: August 4, 2005

U.S. Bankruptcy Court: Southern District of New York (Manhattan)

U.S. Bankruptcy Judge: Robert D. Drain

Mexican Bankruptcy Court: Second Federal District Court for
                          Civil Matters for the
                          Federal District of Mexico City

Petitioner's Counsel: Matthew Scott Barr, Esq.
                      Milbank, Tweed, Hadley & McCloy LLP
                      1 Chase Manhattan Plaza
                      New York, New York 10005
                      Tel: (212) 530-5000
                      Fax: (212) 530-5219

Financial Condition as of May 31, 2005:

      Total Assets: $900,000,000

      Total Debts:  $688,000,000

(Troubled Company Reporter, Friday, August 05, 2005, Vol. 9,
Issue No. 184)



=================
N I C A R A G U A
=================

* NICARAGUA: Interim Strategy discussed by World Bank Board
-----------------------------------------------------------
To continue supporting Nicaragua in its efforts to reduce
poverty, the World Bank's Board of Executive Directors discussed
Thursday an Interim Strategy Note (ISN) for the country, with
financial assistance from the International Development
Association (IDA) likely to total US$58 million per year, over
the next two years.

"Nicaragua has made substantial progress in the past few years
in economic and social reform," said Jane Armitage, World Bank
Country Director for Central America. "The ISN discussed today
by the Bank's Board shows our continued support to Nicaragua's
Poverty Reduction Strategy, in coordination with other donors,
and aims to bring the Bank's strategy in line with the country's
election cycle."

The ISN aims to support the Nicaraguan government's efforts to
reduce poverty while maintaining macroeconomic stability, for
the remainder of its mandate. In particular, it will support the
government's new emphasis on growth-enhancing policies and
actions as a means to reduce poverty. The Interim nature of the
Strategy provides a bridge in the World Bank's Group assistance
to the country until a new government is sworn in.

Nicaragua remains one of the poorest countries in Latin America,
with an average per capita GDP of US$813. In addition, until
recently, Nicaragua was one of the most highly indebted
countries in the world. Despite challenging economic and
political conditions, an evaluation of the previous Country
Assistance Strategy found significant achievements in a number
of areas. One such achievement was the reaching of the Highly
Indebted Poor Countries Initiative (HIPC) completion point in
January 2004.

The Interim Strategy aims at advancing the results of the last
CAS while consolidating them under the strategic areas and
specific objectives articulated in the draft National
Development Plan (PND 05-09), in strong coordination with the
rest of the international community. The strategy specifies that
the IDA allocation of US$58 million per year will finance
investments in health, infrastructure, agriculture and rural
development. In addition, with the passage of the Central
America Free Trade Agreement (CAFTA) competitiveness
strengthening project is envisioned to assist Nicaragua in
reaping the benefits of increased regional trade. Budget support
will also continue provided the conditions for the effectiveness
of policy based lending materialize.

The World Bank's current portfolio in Nicaragua comprises 17
active projects with about $500 million in net commitments, of
which $184 million has still to be disbursed.

CONTACT: World Bank
         In Washington
         Karina Manasseh
         Phone: (202)-473-1729
         E-mail: Kmanasseh@worldbank.org

         In Managua
         Walter Lacayo
         Phone: (505) 266-1701 Ext. 213
         E-mail: walter.lacayo@undp.org



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

IBH: Reports Operating $53.2M Net Profit, $30.6M Profit
-------------------------------------------------------
International Briquettes Holding, IBH, a subsidiary of Sivensa,
reported on July 29, 2005 sales for US$114.8 million in the
April-June 2005 period, which are compared to the US$34.0
million sales obtained in the same quarter of 2004. During the
quarter an operating profit of US$30.6 million and a net profit
of US$53.2 million was obtained, which are compared to the
amounts of US$13.6 million and US$12.9 million respectively,
reported in the equivalent quarter of fiscal year 2004.

International Market

The average reference price of the reduced iron briquettes
unloaded on barge in the port of New Orleans, United States of
America, was US$276.0/MT during the quarter April-June 2005,
compared to US$295.0/MT in the immediately preceding quarter
(January-March 2005), and to US$271.7/MT in the same period of
the previous year (April-June 2004).

Towards the end of the quarter, metallic prices showed a
pronounced tendency to drop, mainly as a result of a decrease in
the European industrial activity and the high inventories of
scrap in the United States. During the month of July and to the
date of publication of this report, a slight price recovery has
been observed.

Performance Analysis

Venprecar

Venprecar's production for the analyzed quarter was 155,256 MT,
which is compared to the production of 192,717 MT obtained in
the same period of fiscal year 2004. The production decrease was
due to the shutdown during the month of May for the annual
maintenance, equipment replacement and technological upgrading.

According to the program announced in prior reports, during the
May shutdown a device to improve the gas and mineral flow in the
reactor was installed. As a result of this modification, the
iron ore lumps proportion was elevated in the reactor feeding,
in relation to the pellets proportion. Given the pellets
shortage in the Guayana region, this change of proportions in
the mixture of Venprecar's raw material, has allowed the plant
to continue to produce without interruptions.

Orinoco Iron

The Orinoco Iron plant produced 353,834 MT during the period
April-June 2005, a volume 57% higher than that obtained in the
same period of the previous fiscal year. As a result of an
improved operating stability, the four production trains
obtained a higher daily average production and daily and monthly
production records were achieved.

As it was previously announced, the company has a project in
progress to control the size of the particles of the iron ore it
uses as raw material in the reduction process. The beginning of
operations of the screening system has been rescheduled for
September and the crushing system for November. In the last
months temporary screening and crushing equipment has been used,
which has resulted in a higher homogeneity to the mineral, which
has positively reflected in the reactors performance.

Orinoco River Draft Problems

As well as other exporter companies of Guayana, IBH has
expressed to the responsible authorities its concern over the
Orinoco River draft low level, due to the lack of dredging. Such
situation has caused that the draft be extremely low during the
rainy season, when it is usually high. In response to such
conditions, the vessels have started to limit the tonnage of
transported briquettes, thus affecting Venprecar and Orinoco
Iron exports.

Litigation

The arbitration procedure against Orinoco Iron which was
requested in London by the owners of the Ythan vessel continues,
a case that has been previously reported. On May 19, the company
filed the Points of Reply to Defence to Counterclaim. As to the
pre-judgment attachments requested by the owner of the vessel in
the United States, the Ohio Court of Appeals set the hearing for
August 18, 2005 so Orinoco Iron may present her objection
arguments to the appeal filed by Y-Than.

Venprecar And Orinoco Iron Merger

On May 24, IBH subsidiaries, Orinoco Iron and Venprecar, held
extraordinary shareholders' meetings where the merger of both
companies was approved. The surviving company shall be
Venezolana de Prerreducidos Caroni "Venprecar" C.A. who shall
absorb Orinoco Iron assets and liabilities. According to the
Venezuelan Commercial Law, the merger will become effective
after the elapsing of a three-month period, starting from the
date on which the merger was published, and during such period,
will be subject to the rules set forth on such law.

Debt Restructuring with CVG Ferrominera Orinoco and CVG EDELCA

On May 27, 2005 Orinoco Iron signed a restructuring agreement of
its commercial debt with CVG's subsidiaries, Ferrominera Orinoco
and Edelca. In said agreement, the debt was divided in two
blocks:

- The fist block, for US$30.1 million, accumulates interest at
the Libor rate plus 4%, shall be paid in Bolivars in accordance
with the official exchange rate in force, and its payment
schedule is associated to the company's cash generation, by
sharing this cash in equal parts with creditor banks. The second
block, for Bs. 21 billion, causes interest at the market rate in
force and its interest shall be paid in accordance with excess
cash flow generation. The entire capital of this block
denominated in Bolivars was paid in June 2005.

As of November 5, 2004 IBH began to consolidate Orinoco Iron in
its results. The substantial differences between the third
quarter results for the 2005 and 2004 fiscal years observed in
the financial statements subject of this report, are due mainly
to the fact that they show IBH, Venprecar and Orinoco Iron
consolidated results in the April-June 2005 quarter, compared
with the results of IBH and its affiliate Venprecar, without
including Orinoco Iron, in the April-June 2004 period.

Averages calculated by Orinoco Iron from the monthly data
published by the CRU-Monitor/Steel, metallics, scrap, dri & pig
iron.

CONTACT: International Briquettes Holding, IBH
         Antonio Osorio
         Phone: 58-212-707.62.80
         Fax: 58-212-707.63.52
         E-mail: antonio.osorio@sivensa.com
         URL: http://www.ibh.com.ve/


PDVSA: Signs JV Agreements with 8 Oil Firms
-------------------------------------------
Venezuela's state oil company Petroleos de Venezuela (PDVSA)
signed Thursday a series of deals with eight private oil firms,
obtaining a majority stake in oil fields where the firms used to
pump crude independently under contract.

According to a Business News Americas report, the companies that
signed are:

1) Spain's Repsol YPF (Quiamare-La Ceiba, Mene Grande,
Quirequire)

2) China National Petroleum Corporation (Caracoles, Intercampo
Norte)

3) British-French oil firm Hocol (B2X-68/79, B2X-70/80)

4) Harvest Vinccler, 80% held by Texas-based Harvest National
Resources (one field in Monagas)

5) Venezuelan firms Vinccler Oil and Gas, no relation to Harvest
Vinccler (Falcon Este)

6) Inemaka (Kaki, Maulpa)

7) Suelopetrol (Cabimas)

8) Open (Casma-Anaco)

"These companies, after an earnest process of constructive
discussion, and looking to the future, have agreed to sign the
agreements," PDVSA president and energy and oil minister Rafael
Ramirez said during the signing of the preliminary agreements.
"It is a vote of confidence."

The move to set up joint ventures with the companies is one of
many recent steps by the Venezuelan government to exert more
control over the industry and generate more revenue amid high
oil prices.

Venezuela has ordered 22 oil firms to convert their contracts
into joint ventures with PDVSA by the end of this year.

Ramirez, who is also Venezuela's oil minister, said talks are
moving rapidly with the remaining 14 companies on the list.

"Next year there will not be any operating agreements in the
country," Ramirez told reporters after the signing ceremony.


SIDOR: Worker Protests Cripple Operations
-----------------------------------------
Operations at Sidor, the country's largest steelmaker, are
partially paralyzed due to ongoing worker protests. Business
News Americas relates that workers lodged protests last week to
demand safer working conditions following the death of a co-
worker in the billet plant.

Sidor is almost 60%-owned by the Amazonia consortium of Mexico's
Hylsamex, the Techint group, Brazil's Usiminas and Venezuela's
Sivensa. Venezuela's heavy industry state holding CVG has the
other 40%, half of which is in the process of being transferred
to current and former employees.


SINCOR: Unveils 5-Yr, $500M Investment Plan
-------------------------------------------
Sincor, a joint venture between state oil firm PDVSA, French oil
company Total and Norway's Statoil, revealed Wednesday a plan to
invest US$500 million in oil production over the next five
years.

Under the investment plan, the heavy crude project aims to
resume drilling operations in August after the first drilling
program ended in late 2003. Sincor plans to drill eight new
wells this year, and up to 84 new wells in 2006 and 2007.

"The objective of this plan is maintain volumes of extra-heavy
crude," the Company said in a statement.

Sincor's announcement comes amid an ongoing tax dispute with the
Venezuelan government.

Earlier this year, the oil ministry accused Sincor of increasing
output beyond the 114,000 barrels a day (b/d) limit in the
original contract, and the ministry plans to charge Sincor a
higher tax rate on the additional output plus back taxes. Oil
Minister Rafael Ramirez, who also runs PDVSA, has said Sincor's
tax claim could be as high as US$1 billion.

Total and Statoil have said that operations are in line with the
law and that PDVSA authorized the additional output.

Sincor and the other three extra heavy crude projects -
Petrozuata, Cerro Negro and Hamaca - produce a combined
660,000b/d of crude estimated from 8-10 degrees API. The crude
is then upgraded into 600,000b/d of syncrude. Sincor's own brand
of syncrude is called Zuata Sweet.



                            ***********


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