TCRLA_Public/050810.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

            Wednesday, August 10, 2005, Vol. 6, Issue 157

                            Headlines

A R G E N T I N A

A.A. ABASTECIMIENTOS: Begins Liquidation
ACINDAR: Local S&P Assigns `raD' to $100M Bonds
AGRICOLA INDUSTRIAL: Court Grants Reorganization Plea
AIRDAL GASTRONOMICA: Bankruptcy Petition Awaits Court Approval
AMELUX S.A.: Verification Phase to End Sep. 21

AUTO STYLING: Court Approves Creditor's Bankruptcy Motion
BANCO GALICIA: Bondholders File Suit to Recoup Investments
CENTRO LIVING: Court Appoints Trustee for Reorganization
DALBIA S.A.: Initiates Bankruptcy Proceedings
ESTABLECIMIENTO LAS MELLIZAS: Enters Bankruptcy on Court Orders

GALVASA S.A.: Concludes Reorganization
CAMPO ENTRERRIANO: Individual Reports Due Sep. 16
INPRI S.R.L.: Court Orders Liquidation
NET AGROPECUARIA: Liquidates Assets to Pay Debts
NIDERRA S.R.L.: Seeks Court Approval to Reorganize

PETROBRAS ENERGIA: Reports 2Q05 Net Profit of ARS264 Mln
TRANSENER: Debt Restructuring Boosts 1H05 Bottom Line


B E R M U D A

SEA CONTAINERS: Losses Grow in 2Q05


B R A Z I L

BANCO BRADESCO: Posts $2.621B Net Income in 1H05
BANCO ITAU: Secures $100M From IDB Unit, 2 Commercial Banks
COPEL: Power Market at Concession Area Grows 3.9% in 1H05
EMBRATEL: Merrill Lynch Deems Primesys Deal Slightly Expensive
VARIG: To Hire UBS as Restructuring Advisor

VARIG: Recovers Domestic Market Share in July


C O L O M B I A

CHIVOR: Rating Reflects Weak Financial Profile


E C U A D O R

PETROECUADOR: Pareja's Exit Linked to Corruption Claims


M E X I C O

AOL LATIN AMERICA: Court OKs Bankruptcy Services as Claims Agent
AOL LATIN AMERICA: Files Schedules of Assets & Liabilities


P U E R T O   R I C O

DORAL FINANCIAL: Unit Signs 3-Yr Agreement With MRU Holdings

     -  -  -  -  -  -  -  -

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

A.A. ABASTECIMIENTOS: Begins Liquidation
----------------------------------------
A.A. Abastecimientos Hospitalarios S.R.L. of Buenos Aires will
begin liquidating its assets after Court No. 21 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, Maria Alejandra
Barbieri.

The trustee will review claims forwarded by the Company's
creditors until Sep. 26, 2005. After claims verification, Ms.
Barbieri will submit the individual reports for court approval
on Nov. 8, 2005. The general report will follow on Dec. 21,
2005. Clerk No. 41 assists the court on this case.

CONTACT: A.A. Abastecimientos Hospitalarios S.R.L.
         Caracas 1558
         Buenos Aires

         Maria Alejandra Barbieri, Trustee
         Avda Cabildo 2040
         Buenos Aires


ACINDAR: Local S&P Assigns `raD' to $100M Bonds
-----------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
assigned an `raD' rating to US$100 million worth of bonds issued
by Acindar Industria Argentina de Aceros, securities regulator,
Comision Nacional Valores, revealed in its Web site.

The bonds, classified under `Simple Issue' and described as
`Obligaciones Negociables simples, no convertibles en acciones,
autorizadas por AGOyE de fecha 5.8.96,' matured on Feb. 16,
2004.

S&P gives an `raD' rating to financial obligations that are
currently in default. The ratings agency said that the same
rating may be issued if interest or principal payments are not
made on the due even if the applicable grace period has not
expired.

The ratings given were based on Acindar's finances as of
June 30, 2005.

CONTACT: Acindar Industria Argentina de Aceros S.A.
         2739 Estanislao Zeballos Beccar
         Buenos Aires
         Argentina B1643AGY
         Phone: +54 11 4719 8500
         Fax: +54 11 4719 8501
         Web site: http://www.acindar.ar.com


AGRICOLA INDUSTRIAL: Court Grants Reorganization Plea
-----------------------------------------------------
Agricola Industrial Don Francisco S.A., a company operating in
San Fernando del Valle de Catamarca, begins reorganization
proceedings after the city's civil and commercial Court No. 2,
with assistance from Clerk No. 1, granted its petition for
"concurso preventivo".

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

According to Argentine news source Infobae, the reorganization
will be conducted under the direction of Luis Francisco
Florimonte and Maria Elena Romero de Vega, the court-appointed
trustee.

Creditors with claims against Agricola Industrial Don Francisco
S.A. must present proofs of the Company's indebtedness to Mr.
Florimonte and Ms. de Vega before Sep. 2, 2005. These claims
will constitute the individual reports. The court also requires
the trustee to present an audit of the Company's accounting and
business records through a general report. Deadlines for both
reports are yet to be determined.

An informative assembly is set on Oct. 14, 2006.

CONTACT: Agricola Industrial Don Francisco S.A.
         Peru 338
         San Fernando del Valle de Catamarca
         Catamarca

         Mr. Luis Francisco Florimonte
         Ms. Maria Elena Romero de Vega, Trustees
         Vicario Segura 782
         San Fernando del Valle de Catamarca
         Catamarca


AIRDAL GASTRONOMICA: Bankruptcy Petition Awaits Court Approval
--------------------------------------------------------------
Airdal Gastronomica S.A. filed for bankruptcy at Court No. 2 of
Buenos Aires' civil and commercial tribunal, reports Argentine
daily La Nacion. The court, which is assisted by Clerk No. 4, is
still studying whether to approve the motion.


AMELUX S.A.: Verification Phase to End Sep. 21
----------------------------------------------
Jorge Ernesto del Hoyo, the trustee assigned to supervise the
liquidation of Amelux S.A., will stop accepting creditors'
claims on Sep. 21, 2005.  Mr. Hoyo will prepare individual
reports out of the validated claims and submit it to court for
approval on Nov. 3, 2005. The trustee will also submit a general
report of the case on Dec. 15, 2005.

Infobae reports that Court No. 18 of Buenos Aires' civil and
commercial tribunal handles the Company's case. The city's Clerk
No. 35 assists the court in the proceedings.

CONTACT: Mr. Jorge Ernesto del Hoyo, Trustee
         Cerrito 484
         Buenos Aires


AUTO STYLING: Court Approves Creditor's Bankruptcy Motion
---------------------------------------------------------
Court No. 6 of Buenos Aires' civil and commercial tribunal
declared Auto Styling S.A. bankrupt, says La Nacion. The ruling
comes in approval of the petition filed by the Company's
creditor, Francisco Alegre, for nonpayment of $13,092.01 in
debt.

Trustee Juan Roque Treppo will examine and authenticate
creditors' claims until Oct. 18, 2005. This is done to determine
the nature and amount of the Company's debts. Creditors must
have their claims authenticated by the trustee by the said date
in order to qualify for the payments that will be made after the
Company's assets are liquidated.

Clerk No. 11 assists the court on the case, which will conclude
with the liquidation of the Company's assets.

CONTACT: Auto Styling S.A
         San Martin 655
         Buenos Aires

         Mr. Juan Roque Treppo, Trustee
         Sarmiento 1183
         Buenos Aires


BANCO GALICIA: Bondholders File Suit to Recoup Investments
----------------------------------------------------------
A group of Argentine bondholders has filed a class-action
lawsuit against Banco de Galicia y Buenos Aires SA and several
other Argentine banks for allegedly selling them Argentine
government bonds in 2000 and 2001 that later went into default.

Dow Jones Newswires reports that the group, known as Financial
Victims 2002, is seeking to recover the full nominal value of
their investments.

Mr. Anibal Gutierrez, the president of the group, announced that
for investors who participated in the government's US$103
billion global debt restructuring in February, they would seek
compensation for the difference between the estimated value of
that deal and the nominal value, while holdout bondholders would
get the full nominal amount returned to them.

La Nacion newspaper has estimated that the total value of the
claim is a massive US$25 billion, given that the lawsuit aims to
incorporate all bondholders of Argentine nationality.

The group is being represented by the law firm Luchinisky,
Prato, Rossjanksi y Asociados.

CONTACT:  Banco De Galicia Y Buenos Aires
          Tte Gral Juan D Peron 407
          Buenos Aires
          Argentina
          C1038AAI
          Phone:  11 6329 0000
          Fax:  11 6329 6100


CENTRO LIVING: Court Appoints Trustee for Reorganization
--------------------------------------------------------
Centro Living S.R.L., a company operating in San Fernando del
Valle de Catamarca, is ready to start its reorganization after
Court No. 2 appointed Luis Francisco Florimonte and Maria Elena
Romero de Vega to supervise the proceedings as trustee. Clerk
No. 1 assists the court on this case.

An Infobae report states that Mr. Florimonte and Ms. de Vega
will verify creditors claims until Sep. 2, 2005. Afterwards,
they will present these claims as individual reports for final
review by the court. They will also provide the court with a
general report pertaining to the reorganization. Dates for the
submission for the said reports are yet to be disclosed. The
court has scheduled the informative assembly on Oct. 14, 2006.

CONTACT: Centro Living S.R.L.
         Republica 902
         San Fernando del Valle de Catamarca
         Catamarca

         Mr. Luis Francisco Florimonte
         Ms. Maria Elena Romero de Vega, Trustees
         Vicario Segura 782
         San Fernando del Valle de Catamarca
         Catamarca


DALBIA S.A.: Initiates Bankruptcy Proceedings
---------------------------------------------
Buenos Aires Court No. 4 has approved the bankruptcy petition
filed by Cooperativa Milenio Limitada, who has claims totaling
US$60,000 against Dalbia S.A.

Mr. Oscar Chapiro, who has been appointed as trustee, will
verify creditors' claims until Sep. 30, 2005.

Clerk No. 8 assists the court on the case, which will close with
the liquidation of the Company's assets to repay creditors.

CONTACT: Dalbia S.A.
         Avenida Cabildo 4315
         Buenos Aires


ESTABLECIMIENTO LAS MELLIZAS: Enters Bankruptcy on Court Orders
---------------------------------------------------------------
Establecimiento Las Mellizas S.A. enters bankruptcy protection
after Court No. 15 of Rosario's civil and commercial tribunal
ordered the Company's liquidation. The order effectively
transfers control of the Company's assets to a court-appointed
trustee who will supervise the liquidation proceedings.

Infobae reports that the court selected a trustee to verify
creditors' proofs of claim and submit the individual and general
reports.

CONTACT: Establecimiento Las Mellizas S.A.
         Bv. Orono 894
         Rosario (Santa Fe)


GALVASA S.A.: Concludes Reorganization
--------------------------------------
The reorganization of Buenos Aires-based Galvasa S.A. has ended.
Data revealed by Infobae on its Web site indicated that the
process was concluded after Buenos Aires' civil and commercial
Court No. 10, with assistance from Clerk No. 20, homologated the
debt agreement signed between the Company and its creditors.


CAMPO ENTRERRIANO: Individual Reports Due Sep. 16
-------------------------------------------------
The individual reports on the claims of creditors against Campo
Entrerriano S.R.L. will be submitted on Sep. 16, 2005.

Infobae relates the Mr. Lucio Cherkasky, the trustee selected by
the court for the Company's bankruptcy case, stopped accepting
claims on Aug. 4, 2005.

Mr. Cherkasky will also submit a general report, containing a
summary of the Company's financiall status as well as relevant
events pertaining to the bankruptcy on Oct. 31, 2005.

Campo Entrerriano S.R.L. began liquidating its assets following
the "Quiebra" pronouncement of Gualeguay's civil and commercial
Court No. 1.

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

CONTACT: Campo Entrerriano S.R.L.
         Maipu 34
         Gualeguay (Entre Rios)

         Mr. Lucio Cherkasky, Trustee
         Gregorio Moran 157
         Gualeguay (Entre Rios)


INPRI S.R.L.: Court Orders Liquidation
--------------------------------------
Inpri S.R.L. prepares to wind-up its operations following the
bankruptcy pronouncement issued by Court No. 18 of Buenos Aires'
civil and commercial tribunal. The declaration effectively
prohibits the company from administering its assets, control of
which will be transferred to a court-appointed trustee.

Infobae reports that the court appointed Ms. Maria Elsa Chiama
as trustee. Ms. Chiama will be reviewing creditors' proofs of
claim until Sep. 12, 2005. The verified claims will serve as
basis for the individual reports to be presented for court
approval on Oct. 25, 2005. The trustee will also submit a
general report of the case on Dec. 6, 2005.

Clerk No. 35 assists the court on this case that will end with
the sale of the Company's assets. Proceeds from the sale will be
used to repay the Company's debts.

CONTACT: Ms. Maria Elsa Chiama, Trustee
         Tinogasta 4127
         Buenos Aires


NET AGROPECUARIA: Liquidates Assets to Pay Debts
------------------------------------------------
Rosario-based Net Agropecuaria S.R.L. will begin liquidating its
assets following the pronouncement of the city's civil and
commercial Court No. 9 that the Company is bankrupt, reports
Infobae.

The bankruptcy ruling places the Company under the supervision
of court-appointed trustee, Norberto Ricardo Victtore. The
trustee will verify creditors' proofs of claim until Oct. 17,
2005. The validated claims will be presented in court as
individual reports on Nov. 28, 2005.

Mr. Victtore will also submit a general report, containing a
summary of the Company's financial status as well as relevant
events pertaining to the bankruptcy, May 8, 2006.

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

CONTACT: Net Agropecuaria S.R.L.
         Avda Pellegrini 74
         Rosario (Santa Fe)

         Mr. Norberto Ricardo Victtore, Trustee
         Italia 1905
         Rosario (Santa Fe)


NIDERRA S.R.L.: Seeks Court Approval to Reorganize
--------------------------------------------------
Niderra S.R.L., a company operating in Buenos Aires, has
requested permission to reorganize. It has failed to pay its
liabilities since April 15, 2005.

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

The case is pending before Court No. 26. Clerk No. 52, assists
on this case.

CONTACT: Niderra S.R.L.
         Monroe 2630
         Buenos Aires


PETROBRAS ENERGIA: Reports 2Q05 Net Profit of ARS264 Mln
--------------------------------------------------------
Oil and gas company Petrobras Energia Participaciones reported a
net profit of ARS264 million for the second quarter of 2005, a
significant improvement from a loss of ARS77 million in the
comparable year-ago period.

Higher world oil prices boosted the Company's operating profit
to ARS871 million in the recent quarter from ARS694 million in
the second quarter of 2004.

Sales in the second quarter of 2005 totaled ARS2.535 billion,
20.3% higher from a year earlier. Petrobras Energia said some of
its strongest growth was in oil and gas exploration and
production, where sales jumped to ARS1.1 billion from ARS894
million a year earlier, and refining, where sales rose to ARS942
million from ARS845 million.

As of June 30, 2005, Petrobras Energia's net assets stood at
ARS5.897 billion, up from ARS5.511 billion at the end of last
year.

CONTACT: Petrobras Energia Participaciones S.A.
         Edificio Perez Companc
         Maipu 1
         Buenos Aires, C 1084 ABA
         Argentina
         Phone: 54-11-4344-6000
         Website: http://www.petrobrasenergia.com


TRANSENER: Debt Restructuring Boosts 1H05 Bottom Line
-----------------------------------------------------
The restructuring of Transener's US$465 million debt, which was
completed in May, helped the high-voltage electricity
transporter restore its financial health.

Dow Jones Newswires reports that Transener returned to black in
the first half of the year with a net profit of ARS580.9 million
from a loss of ARS53.3 million in the same year-ago period.

In a filing with the local stock exchange, Transener stated that
the restructuring "allowed (the company) to partially absorb the
negative results generated by the devaluation on the Argentine
peso on Jan. 6, 2002, and reasonably regain the company's
financial ratios."

In February, Transener and its Buenos Aires subsidiary, Transba,
signed a letter of intent with the government. A month later,
the state held a public hearing on the proposed contract. The
new contract is now subject to review by a bicameral
congressional committee and final approval by the executive
branch, Transener said.

"Meanwhile, the company will use its own resources to continue
their operations," the company said.

During the first half of the year, Transener said it saw higher
sales revenue from non-regulated operations, which would include
activity not restricted by a 3 1/2-year freeze on utility rates.

The Company also saw higher operating and administrative costs.
Transener said government-decreed salary increases and higher
costs of materials for ongoing construction projects were the
primary factors behind the higher costs.

Transener is controlled by Citelec, a holding company equally
owned by local investment fund Grupo Dolphin and Petrobras
Energia, a subsidiary of Brazil's Petrobras.

Petrobras Energia acquired its stake in Transener when it took
over Argentine energy concern Perez Companc in 2003. Argentine
antitrust regulators obligated Petrobras to divest its stake in
Transener, addressing government concerns that the country's
biggest power transporter would be in foreign hands.

On Friday, Argentine regulators ordered Petrobras Energia to
provide the state with a divestment plan outlying the eventual
sale of its stake in Transener.

CONTACT:  TRANSENER S.A.
          Paseo Colon 728 6th Floor
          (1063) Buenos Aires
          Republica Argentina
          Tel: (54-11) 4342-6925
          Fax: (54-11) 4342-7147
          Email: info-trans@transx.com.ar
          Web site: http://www.transener.com.ar



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

SEA CONTAINERS: Losses Grow in 2Q05
-----------------------------------
Sea Containers Ltd. (NYSE: SCRA and SCRB,
www.seacontainers.com), passenger and freight transport
operator, marine container lessor and manufacturer, and leisure
industry investor, announced Monday its results for the second
quarter and six months ended June 30, 2005. The net loss for the
second quarter was $17.7 million (loss of $0.64 per common
share) on revenue of $458.0 million, compared with a net profit
of $6.8 million ($0.30 per common share) on revenue of $432.4
million in the second quarter of 2004. For the six months ended
June 30, 2005 the net loss was $24.6 million (loss of $0.91 per
common share) on revenue of $839.6 million, compared with a net
loss of $10.1 million (loss of $0.44 per common share) on
revenue of $805.7 million in the prior year period.

The company incurred $19 million of non-recurring expense in the
first six months of 2005 of which $4.5 million was incurred in
the second quarter, while no non-recurring expense was incurred
in the comparable periods of 2004. This non-recurring expense
for the six months was equal to a charge of $0.70 per common
share. The $4.5 million non-recurring expense in the second
quarter of 2005 was comprised of a final payment of $3 million
to the Strategic Rail Authority in connection with GNER's first
franchise which expired at the end of April, 2005 and $1.5
million of legal expense incurred in connection with the dispute
with GE Capital over the costs of GE SeaCo, the marine container
leasing joint venture between Sea Containers and GE Capital.

Mr. James B. Sherwood, President, said that despite running
fewer ferry services in the first half of 2005 compared with the
first half of 2004, fuel costs were $7.1 million higher and it
had not been possible to recover more than a small amount of the
increase through higher tariffs.

    Mr. Sherwood reviewed results by activity as follows:
    (Amounts in tables are in thousands of dollars.)
    1. Silja, the Baltic ferry operator.

                      Three months ended      Six months ended
                          June 30,                June 30,
                       2005        2004        2005      2004
                       $000        $000        $000      $000
    Revenue          160,952     161,179     280,733   299,070
    Operating and
     SG&A expenses  (150,275)   (137,221)   (276,853) (270,043)
    EBITDA            10,677      23,958       3,880    29,027
    Depreciation
     and
     amortization    (11,949)    (11,259)    (24,230)  (22,038)
    Operating (loss)
     / income before
     non-recurring
     charges          (1,272)     12,699     (20,350)    6,989

Silja's fuel bill was $3.5 million higher in the quarter and
$5.6 million higher in the six months than in the prior year.
The effect of the m.v. Finnjet being in layup compared with
operating in the prior year was a reduction in earnings of $2
million in the quarter and $6 million in the six months. Lower
passenger volumes on the Helsinki and Turku routes reduced
earnings by $7.7 million in the second quarter and $8.6 million
in the six months compared to the prior year periods. These
reductions were largely due to excess capacity introduced in the
Swedish market compared with the prior year.

    2. Other ferry operations.

                       Three months ended     Six months ended
                              June 30,             June 30,
                         2005        2004       2005     2004
                         $000        $000       $000     $000
    Revenue            18,443      30,588     24,001   34,771
    Operating and
      SG&A expenses   (28,911)    (37,088)   (46,845) (47,371)
    EBITDA            (10,468)     (6,500)   (22,844) (12,600)
    Depreciation and
      Amortization     (2,384)     (2,579)    (4,880)  (4,957)
    Operating loss
      before non-
      recurring
      charges         (12,852)     (9,079)   (27,724) (17,557)

Higher fuel costs accounted for an extra $1.1 million in the
quarter and $1.5 million in the six months. Losses on the Dover-
Calais route increased by $1.8 million in the quarter and $3.5
million in the six months due to a rate war which has broken out
on the route.

Annual refit costs were $1.7 million higher in the quarter and
$4 million higher in the six months compared with the prior year
periods.

3. GNER, the intercity high speed rail service connecting London
with Leeds, Newcastle and Scotland.

                      Three months ended        Six months ended
                           June 30,                June 30,
                        2005        2004        2005      2004
                        $000        $000        $000      $000
    Revenue           235,055     208,261     449,759   408,466
    Operating and
      SG&A expenses  (215,634)   (192,234)   (410,890) (377,041)
    EBITDA             19,421      16,027      38,869    31,425
    Depreciation and
      amortization     (3,813)     (3,577)     (9,097)   (7,992)
    Operating income
      before non-
      recurring
      charges          15,608      12,450      29,772    23,433

Rail revenue increased by $26.8 million in the second quarter
and $41.3 million in the first six months compared with the
prior year periods. The London bombings and attempted bombings
will certainly have an impact on revenue in the third quarter
but it is too early to quantify this. Until then, revenue was
ahead of the franchise plan.

The bid submitted on July 30th by GNER and MTR of Hong Kong to
take over South East Trains, currently operated by the British
government, is complex in that it involves the introduction of
new high speed train services later in the franchise to a
station in London, St. Pancras, not presently served by South
East Trains. South East Trains move 400,000 passengers per
working day on its routes from Kent into London and it is vital
that the trains be punctual. The GNER (70%)/MTR (30%) consortium
has identified many areas of improvement to the services which
can be accomplished within the context of a diminishing subsidy
requirement. The consortium believes it has submitted a robust
bid but the outcome will not be known for several months.

4. GE SeaCo, the 50% owned joint venture with GE Capital,
engaged in the ownership and leasing out of marine cargo
containers.

                     Three months ended      Six months ended
                         June 30,              June 30,
GE SeaCo
  Owned Fleet (100%)   2005       2004      2005     2004
                       $000       $000        $000     $000
    Revenue           47,069     36,352      91,757   68,701
    Operating and
      SG&A expenses   (9,495)    (6,204)    (18,062) (12,145)
    EBITDA            37,574     30,148      73,695   56,556
    Depreciation and
      amortization   (15,320)    (9,723)    (29,230) (18,707)
    Operating
      income          22,254     20,425      44,465   37,849
    Finance costs     (9,174)    (3,861)    (16,725)  (7,603)
    Earnings before
       tax            13,080     16,564      27,740   30,246
    SCL's 50% share    6,540      8,282      13,870   15,123

Higher interest rates on the company's floating rate debt caused
Sea Containers' share of interest costs to increase by $1.9
million in the quarter compared to the year earlier period,
although $1.2 million of this was offset by earnings from new
containers. GE Capital under protest by Sea Containers has
increased the depreciation on the first lease of recently
acquired new containers, causing a $1.1 million decline in Sea
Containers' share of GE SeaCo earnings in the quarter and a $1.9
million decline for the first six months.

This now means that Sea Containers' own fleet and most of the GE
SeaCo owned fleet is being depreciated on a different basis than
recent additions to the GE SeaCo fleet.

An arbitrator has been appointed in connection with the dispute
with GE Capital over the Services Agreement whereby Sea
Containers provides certain executive, financial, computer,
office, accounting, legal and public relations services to GE
SeaCo. GE Capital is seeking to terminate the Services Agreement
in order to reduce the costs of GE SeaCo, replacing many of the
services provided by Sea Containers with services provided by
others.

Basically, GE Capital wants to change the original deal
negotiated back in 1997 which has resulted in GE SeaCo becoming
the most profitable independent leasing company in the industry.
Sea Containers has offered to make many of the changes requested
by GE Capital provided GE SeaCo pays the costs of
implementation, but GE Capital has refused to agree to this.
Under the circumstances, Sea Containers has no alternative but
to arbitrate the matters in dispute, most of which it believes
have nothing to do with the Services Agreement and to the extent
they do, the complaints are not valid or have been cured. This
process will be costly and consume management time which should
be devoted to running the business.

The container leasing business is having a softer year in 2005
than in 2004. In 2004 GE SeaCo acquired $300 million of new
containers while in 2005 this amount is likely to be only $150
million. A lot of new containership capacity has been introduced
into the market but cargo volumes have yet to increase to fill
it and hence the need for new containers has not yet matched the
new capacity. World trade continues to grow and more containers
will be needed. New container prices have now started to decline
in step with declining steel prices. Demand for specialized
containers such as refrigerated, tank, swap bodies and flat
racks, remains strong. At June 30, 2005 GE SeaCo had taken
delivery of $92 million of new containers. Utilization of GE
SeaCo's owned fleet was 98% at that date, while utilization of
the "pooled" fleets which are managed by GE SeaCo for Sea
Containers and GE Capital was 89%.

5. Other container activities, including factories, depots,
logistics and service facilities.

                    Three months ended     Six months ended
                          June 30,            June 30,
                      2005       2004      2005     2004
                      $000       $000      $000     $000
    Revenue          36,571     26,436     73,164   52,294
    Operating and
      SG&A expenses (21,305)   (12,575)   (44,985) (24,595)
    EBITDA           15,266     13,861     28,179   27,699
    Depreciation and
      amortization  (11,288)   (11,148)   (22,528) (22,332)
    Operating income
      before non-recurring
      charges         3,978      2,713      5,651    5,367

Results from these activities increased to $4 million in the
second quarter from $2.7 million in the prior year period, and
to $5.7 million from $5.4 million for the six months. Earnings
from the company's "pool fleet" managed by GE SeaCo largely
account for the improvement.

Sea Containers operates independently of the joint venture a
fleet of 43,000 containers leased to customers which GE Capital
does not wish to lease to, land intermodal containers, lease-
purchase units and gas tanks. Utilization of this fleet was 95%
at June 30, 2005.

Sea Containers' factories, depots, tank cleaning facilities,
refrigerated container service stations and its logistics
operations in Australasia, east and west Africa and elsewhere
continue to increase their profitability. The company plans to
expand its involvement in these businesses.

6. Property, Plantations and Publishing.

                     Three months ended        Six months ended
                          June 30,                  June 30,
                          2005    2004           2005     2004
                          $000    $000           $000     $000
    Revenue              6,964   5,925         11,940   11,066
    Operating and
      SG&A expenses     (6,995) (5,556)       (12,955) (11,423)
    EBITDA                 (31)    369         (1,015)    (357)
    Depreciation and
       amortization       (295)   (328)          (598)    (620)
    Operating (loss) /
       income before
       non-recurring
       charges            (326)     41         (1,613)    (977)

Improvements in banana plantation profits were offset by large
increases in labor costs at the Corinth Canal dictated by Greek
government contracts with trade unions. Canal tolls have been
increased to recover the increased costs. Applications have been
made for construction of a marina and tourist village at the
Canal and approvals are expected before year end.

7. Leisure investment. Orient-Express Hotels Ltd. in which the
company has a 25% shareholding (9.9 million common shares)
increased its net income in the second quarter by 43% to $18.5
million ($0.47 per common share). For the six months its net
earnings were up 104% to $16.9 million ($0.46 per common share).
The Orient-Express Hotels common share price has recently been
about $32, valuing Sea Containers' investment in the company at
around $320 million. Sea Containers intends to exit this
investment in stages over time. The investment is equity
accounted and Sea Containers' share of Orient-Express Hotels
earnings for the second quarter was $4.7 million and for the six
months $3.7 million.

Mr. Sherwood observed, "The results of the company's ferry
operations are obviously unsatisfactory and major changes are
required to bring them back into profitability. We are in the
midst of the peak season (the third quarter) and as soon as the
season's results are known we will be making announcements as to
the steps that will be taken. A great deal of work is going on
behind the scenes to set the stage for these announcements. Non-
recurring charges can be expected as part of the process. Higher
fuel costs are being incurred in markets which are suffering
from over-capacity, causing a situation where prices cannot be
raised to recover the extra cost and at the same time passenger
volumes are declining.

"An essential element of the company's ferry strategy is to move
its car carrying fast ferries into joint ventures in markets
which have good potential. The SNAV-Hoverspeed joint venture
with Mediterranean Shipping in the Adriatic now employs three
car carrying fast ferries, including one of ours, and is solidly
profitable. The Aegean Speedlines joint venture in Greece
employing a company-owned SeaCat was successfully launched in
May. The present plan is to add one or more Sea Containers'
owned vessels to these joint ventures in 2006.

"Seastreak in New York City has temporarily gone into loss
because of fuel prices. Passenger fares are being increased to
recover over time this extra cost.

Mr. Sherwood closed by saying that management and the board are
not complacent about the poor results of the ferries business
and are determined to eliminate the losses.

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

CONTACT: SEA CONTAINERS SERVICES LTD
         William W. Galvin, +1-203-618-9800



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

BANCO BRADESCO: Posts $2.621B Net Income in 1H05
------------------------------------------------
Banco Bradesco, Brazil's largest private Bank, posted a Net
Income of R$ 2.621 billion in 1H05 (equivalent to EPS of
R$5.34), compared to a Net Income of R$1.250 billion in 1H04
(equivalent to EPS of R$2.63), i.e., up by 109.7%. The
annualized return on average equity was 34.9% in 1H05 (19.4% in
1H04). The Net Income in 2Q05 amounted to R$1.416 billion, which
represents a 38.1% annualized ROAE for the quarter (34.7% in
1Q05).

In 1H05, 68.5% of Bradesco's Net Income was originated from
Banking activities, 30.4% from Insurance, Private Pension Plans
and Savings Bonds and 1.1% from other activities.

On May 28, Bradesco issued the first Brazilian perpetual
subordinated bond, in the amount of US$ 300 million, evidencing
the Bank's good perception with the international investment
community.

Financial margins reached R$8.354 billion, increasing by 30.3%
in the last 12 months, and by 8.9% in the q-o-q comparison (2Q05
to 1Q05). Fee income grew by R$727 million between June 04' and
05', totaling R$3.421 billion. In the q-o-q comparison, fees
evolved R$99 million.

Bradesco's Efficiency Ratio for the accumulated 12 months
continues to present a consistent improvement, totaling 60.1% in
June 2004, 52.7% in March 2005 and, finally, 48.1% in June 2005.

As an acknowledgment of Bradesco's quality in asset management,
BRAM - Bradesco's Asset Management company was granted the most
relevant awards of the industry, such as Exame/FGV, Invest
Tracker/Estadao, Invest Tracker/Thomson Financial and Valor
Investe/Standard & Poor's.

In line with the policy of adding value to stockholders,
Bradesco paid or accrued R$925.1 million in Interest on Own
Capital in 1H05 (compared to R$651.4 million in 1H04). On March
1, 2005, Bradesco raised by 21.12% the monthly amount of
Interest on Own Capital declared per stock, paid as from April
2005.

Bradesco's Market Capitalization surpassed the R$39 billion
mark, evolving by 94.1% between June 2004 and June 2005 and by
11.4% in the 2nd quarter, indexes significantly higher than
Ibovespa's, which during the same periods evolved by 18.5% and
(5.9)%, respectively.

Assets

Total Assets surpassed R$194.5 billion, a 10.4% y-o-y and 1.7%
q-o-q.

In the 1H05 and 1H04 comparative analysis, the Securities
Portfolio grew by R$8.2 billion and the Loan Portfolio increased
by R$11.4 billion, mainly in the Individuals and Small and
Medium-Sized Companies (SME) segments.

When compared to 1Q05, Total Assets increased by R$3.2 billion
in 2Q05, pointing out that the Loan Portfolio was up by R$3.8
billion in the period.
Loan Portfolio

The Loan Portfolio, including sureties and guarantees, reached
the relevant R$78.3 billion mark, up by 20.2% y-o-y and by 4.4%
when compared to the previous quarter.

The Loan Portfolio, not including sureties and guarantees,
reached R$69.8 billion, increasing by 19.5% when comparing 1H05
to 1H04, and 5.8% q-o-q. The Loan Portfolio increment of R$11.4
billion in the last 12 months and R$ 3.8 billion in the quarter
mainly stems from a higher demand by Individuals, in view of the
maintenance of the Brazilian economy activity levels, the rise
of real wages, as well as the unemployment rate decrease. In
2Q05, we observed raises in the lines of Direct Lending and
Vehicles finances.

In the Corporate segment, the annual loan portfolio growth was
driven by Working Capital, Overdraft and Vehicle financing
credit lines, in line with expected sales growth related to the
economic recovery. When compared to the previous quarter, the
largest increases in credit lines occurred in Overdraft, Working
Capital operations and BNDES on lendings.

SMEs have been gradually increasing their demand for loans,
recording a 23.8% increase in the Loan Portfolio between June 5
and June 4 and 5.8% in the quarter. Referring to large
corporations, a decrease in the Loan Portfolio was recorded, of
6.2% in the last 12 months and of 1.8% in the quarter, mainly
due the appreciation of the Real (BRL), besides the fact that
large corporations are more capitalized, opting for raising
funds through capital markets.

AA-C rated operations accounted for 92.6% of the Loan Portfolio,
compared to 92.5% in March 2005 (91.4% in June 2004), evidencing
a continuous improvement in asset quality.

Balance of allowance of loan losses (PDD) reached R$4.450
billion, 6.4% of the Loan Portfolio, of which R$3.504 billion
were required provisions and R$946 million were additional
provisions.

The R$122 million increase in the volume of allowance of loan
loss expenses y-o-y includes the preventive down rating of a
utility company in the amount of R$166 million (event recorded
in the first quarter of 2005).

The coverage ratio, which compares the total balance of loan
losses to the loan portfolio balance overdue for more than 60
days, which do not bear interest, stood at 198% (193% in March
2005 and 180% in June 2004).

Deposits and Liabilities

Total Deposits reached R$ 71.7 billion, increasing by 11.7% in
the last twelve months, demonstrating the strength of Bradesco
to capture deposits.

Over the last 12 months, Demand Deposits raised by 10%, Savings
Deposits by 9.2% and Time Deposits by 14.1%. In the quarterly
analysis, Total Deposits remained steady.
The Loan-to-Deposits ratio stood at 97.4%.

Reflecting the Grupo Bradesco de Seguros e Previdˆncia
(Insurance Group) leadership in issuance of premiums, in
addition to its conservative provisioning criteria, deserve
highlight the amount of R$36.5 billion in Technical Reserves for
Insurance, Private Pension Plans and Savings Bonds, which
increased by 23.9% y-o-y and by 3.4% q-o-q.

Capital

Bradesco's Stockholders' Equity at the end of the first half of
the year totaled R$17.5 billion, while Reference Stockholders'
Equity amounted to R$23.6 billion, causing the Basel Capital
Adequacy Ratio (BIS) to reach 15.8%. Considering that the
minimum requirement in Brazil is 11%, Bradesco has a potential
to expand its loan portfolio by R$65 billion.

Asset Management

Total assets under management reached R$108.5 billion,
comprising Investment Funds, Managed Portfolios and Third-Party
Funds, up 22.3% when compared to June 2004 and 3.6% when
compared to March 2005.

Financial Margin

The Financial Margin, under the terms of Brazilian Central
Bank's regulation in the periods compared includes the income
earned in the sale of our stake in Belgo Mineira in 1Q05, as
well as the partial results of derivatives used for hedging the
investments abroad, which, in terms of Net Income, simply
annulled the fiscal effect (PIS/COFINS/IR/CS) of such hedge
strategy. This fiscal effect is triggered by the fact that
exchange variation is not deductible when losses are verified
and is not taxable when gains are recognized. On the other hand,
the earnings from derivative instruments are taxable when gains
occur and deductible when losses occur. Therefore, in the Net
Interest Income is included under the line "income on derivative
financial instruments" the gross income from the hedge, and its
respective taxes are reflected under the lines "tax expenses"
and "income tax and social contribution".

The adjusted financial margin improvement of R$1.198 billion in
1H05 compared to 1H04 is due to (i) a R$924 million increase in
interest income, caused by higher volumes and (ii) a R$274
million increase in non-interest income mainly as a result of
higher Securities Portfolio and Treasury gains.

When compared to the previous quarter, the variation is due to:
(i) a R$300 million increase in interest income operations,
basically composed of higher business volumes and (ii) a drop of
R$17 million in non-interest income.

Fee Income

Fee Income continued evolving due to the increase in the volume
of operations, as well as to the growth in the customer base and
improvement in the relationship through the customer
segmentation process.

In the y-o-y comparative analysis, fee income evolved R$727
million; especially fees originated from (i) loan operations -
R$245 million; (ii) checking account - R$167 million; (iii)
cards - R$110 million; (iv) asset management - R$82 million; and
(v) consortium - R$28 million.

The R$99 million variation in the quarter is basically due to
(i) loan operations, which evolved R$37 million; (ii) cards -
R$14 million; (iii) collection and tax payment fees - R$21
million; and (iv) checking accounts - R$8 million.

Fee Income in 2Q05 covered 70.8% of total expenses (personnel
and other administrative expenses), against an index of 68.8% in
the last quarter. In the semi-annual period analysis, those
indexes stood at 55.7% in 1H04 and 69.8% in 1H05.
Personnel Expenses

In the comparative analysis of semi-annual periods, the R$56.3
million variation is mainly due to: (i) payroll increase
resulted from the collective bargaining agreement of 8.5% in
September 4 - R$228 million; (ii) higher employee profit sharing
expenses - R$58 million; which was offset by (iii) lower
severance and labor provision expenses of R$66 million and (iv)
by a reduction in personnel expenses, related to the synergies
obtained in administrative processes, in the amount of R$165
million.

Increased personnel expenses of R$25 million in the quarterly
analysis is basically due to: (i) the concentration of vacations
in 1Q05 - R$45 million; (ii) higher employee profit sharing
expenses - R$12 million; and (v) higher training investments -
R$8 million, offset by (iv) lower volume of provisions for labor
claims - R$21 million; and (v) lower severance expenses - R$14
million. Excluding these effects, a "structural" reduction in
the amount of R$6 million in expenses is verified in the
quarter.

Other Administrative Expenses

The nominal variation of other administrative expenses in the y-
o-y comparison was of R$8 million only.

In the quarterly analysis, other administrative expenses
increased R$48 million, due to (a) an increase in third-party
services expenses - R$26 million, in view of the business
volumes growth, as well as investments in the improvement and
optimization of the IT platform, and (ii) higher advertising and
marketing expenses - R$ 17 million, related to the launching of
the new "Bradescompleto" campaign.

Bradesco is still focused on continuously improving its
operating efficiency. The accumulated Efficiency Ratio in the
12-month period was able to improve from 52.7% in 1Q05 to 48.1%
in 2Q05.

Insurance, Private Pension Plans and Savings Bonds

This segment reported Net Income of R$796 million in 1H05 (R$374
million over the same period of 2004). Net Income totaled R$369
million in 2Q05 compared to R$427 million in the previous
quarter.

In the Vehicle Segment, premiums increased 7.2% q-o-q, attesting
the success of the acceptance policy and of the implementation
of a pricing policy in line with each customer characteristics
(named Profile). Bradesco's Vehicle Insurance market share
increased to 17.8%, thus maintaining the leadership in the
segment.

With a priority focus on Mass Insurance, particularly Home
Insurance, which presents low claims ratio, the contribution of
Basic Lines reached higher than 600,000 homes insured.

In the Life segment, in which Bradesco also maintains leadership
with a 16.2% market share, we emphasize low-ticket products,
targeting the low-income individuals segment, especially with
the products "Vida Maxima Mulher Bradesco" (Life Insurance for
Women) and "Vida Segura Bradesco" (Bradesco Safe Life).

Considering Private Pension Plans, Bradesco still focuses the
strategy of increasing PGBL and VGBL products sales. Market
share reached 34.5%, thus maintaining the leadership in the
segment.

In the Savings Bonds segment, the Portfolio profile was
maintained, despite the evolvement of monthly payment bonds.

Bradesco Sa£de (Health Insurance) presented in 1H05 a loss of
R$213 million, compared to R$15 million in 1H04, in view of
extraordinary provision in the amount of R$324 million. The
Company continues prioritizing sales of Corporate Plans, which
has been accounting for nearly 75% of the total insured
portfolio. The growth in the number of insured customers in this
segment reflects the Company's high level of specialization,
which is the greatest differential in the current Brazilian
Supplementary Health market. Approximately 12 thousand companies
in Brazil chose Bradesco Saude, and 31 out of the 100 largest
Brazilian companies are customers in the Health/Dental insurance
line.

Premiums in Insurance, Private Pension Plans and Savings Bonds
summed up R$7.4 billion in 1H05, against R$6.9 billion in the
same period of 2004, accounting a 7.4% growth.

Technical Reserves for Insurance, Private Pension Plans and
Savings Bonds reached the amount of R$36.5 billion, a 40% market
share.

Other Highlights

Within the strategy of increasing exposure in consumer finance,
we point out the following events:

Bradesco acquired through its subsidiary Finasa the 33 branch
network of Grupo Morada, which has strong concentration in the
state of Rio de Janeiro and operates in the financial market for
more than 36 years. As a result of this deal, Bradesco adds its
presence in 3,600 affiliated points of sale.

In July, Bradesco entered into a partnership with Uniao de Lojas
Leader, a retailer mainly operating in the states of Rio de
Janeiro and Espirito Santo, for the management of Leadercard,
one of the five largest Private Label credit card companies in
Brazil. This partnership also involves the start-up of a
financing company, subject to the Brazilian Central Bank's
approval and will have the Leadercard client portfolio as its
core business.

In August, a Memorandum of Intent was signed with Lojas Colombo,
the third largest home appliances and furniture retailer in the
country, for the start-up of a Financing Company, which will
have Colombo's clients portfolio as its focus. The
implementation of this partnership is subject on the signing of
the final agreements and on the approval by the Brazilian
Central Bank. Bradesco and Colombo will have equal equity
participation in the operation which, also, foresees the
distribution of other banking and insurance products offered by
Bradesco such as insurance, private pension plans, savings
bonds, direct lending and others.

To see table on Assets Under Management and Asset Distribution:
http://bankrupt.com/misc/BANCO_BRADESCO.htm

CONTACT: Banco Bradesco S.A.
         Investor Relations
         Jean Philippe Leroy
         Phone: 55 11 3684.9229

         Luiz Osorio Leao Filho
         Phone: 55 11 3684.9302

         URL: www.bradesco.com.br/ir


BANCO ITAU: Secures $100M From IDB Unit, 2 Commercial Banks
-----------------------------------------------------------
Banco Itau (NYSE: ITU) obtained from a unit of the Inter-
American Development Bank (IDB) and commercial banks five-year
bullet loans totaling US$100 million, reports Dow Jones
Newswires.

In a statement, Itau said that the IDB's Inter-American
Investment Corporation (IIC) provided US$30 million, while
commercial banks HVB and WestLB co-arranged a further US$70
million.

The loans, which will pay 5.565% interest per year, will be used
to provide medium- and long-term financing to small- and mid-
sized Brazilian enterprises that meet social and environmental
requirements.

CONTACT: Banco Itau Holding Financeira S.A.
         Investor Relations
         Mr. Geraldo Soares
         Investor Relations Superintendency
         Praca Alfredo Egydio de Souza Aranha 100
         Torre Conceicao - 11   04344-902
         Sao Paulo
         Phone: +5511 5019-1549
         Fax: +5511 5019-1133


COPEL: Power Market at Concession Area Grows 3.9% in 1H05
---------------------------------------------------------
Power consumption market at Copel's concession area (including
unregulated "free" customers in the State of Parana) grew 3.9%
between January and June 2005 in comparison to the same period
of the previous year.

Including unregulated "free" customers outside the State of
Parana, the power market dropped 0.4% in the period. The
conclusion of agreements with Carbocloro and Volkswagen by the
end of 2004 explains this drop.

Residential, commercial and rural consumption grew by 4.4%, 8.0%
and 6.3%, respectively.

The good performance of the commercial segment in the first six
months of the year maintained 2004 levels, mainly due to the
modernization of the sector and to the increase in the number of
connections, which recorded the highest number in the last five
years.

Rural segment growth is mainly due to risen exports of
agriculture and agribusiness products, increasing producer's
income which resulted in the acquisition of electric products.

The result from the residential segment is due to the 3.0%
increase in the number of customers, as well as to the increase
in the average consumption level in the period (1.3% higher than
the average recorded in the same period of the previous year).

Industrial consumption, including only Copel Distribuicao
market, dropped 5.2% due to the transfer of some unregulated
"free" customers to Copel Geracao. However, total industrial
consumption, including unregulated "free" customers served by
Copel Geracao in the State of Parana, grew 1.6%.

To see table: http://bankrupt.com/misc/COPEL.htm

CONTACT: COMPANHIA PARANAENSE DE ENERGIA- COPEL
         Rua Coronel Dulcidio 800
         Curitiba
         Parana, 80420-170
         Brazil

         Investor Relations team:
         E-mail: ri@copel.com
         Phone:(55 41) 3222-2027


EMBRATEL: Merrill Lynch Deems Primesys Deal Slightly Expensive
--------------------------------------------------------------
Embratel Participacoes S.A. (Embrapar) confirmed that on August
5, the management of its subsidiary Empresa Brasileira de
Telecomunicacoes S.A. (Embratel) executed a share purchase
agreement with Portugal Telecom do Brasil S.A..

Under the agreement, PT Brasil will transfer to Embratel the
total amount of shares that represent 100% of the capital of
Primesys Solucoes Empresariais S.A., and all the rights
resulting from and pertaining to those shares, from its
ownership upon the receipt of the payment by Embratel to PT
Brasil the agreed fair price of BRL231,250,000.00.

Embratel agreed to pay the full amount to PT Brasil upon the
fulfillment of precedent conditions, monetarily adjusted by the
accumulated variation of the average rate of the Interbank
Deposits - DI, as calculated and disclosed by CETIP - Interbank
Rate (CETIP-Taxa DI), realized up to the date of the closing of
the transaction, as defined by the Share Purchase Agreement.

The Primesys share purchase transaction is subject to the
implementation of precedent conditions, among which the approval
by Agencia Nacional de Telecomunicacoes - ANATEL.

Embrapar said it remains committed with the future of Embratel
and is confident of the results envisaged with this acquisition.

Meanwhile, investment bank Merrill Lynch considers the price tag
as slightly expensive, and said that although Primesys
complements Embratel's business, it will have little impact.

Primesys "should complement Embratel's product range, and help
to improve, if only slightly, its competitive position versus
the local telcos," Merrill Lynch said in a research note.

The bank, which recommends selling shares in Embratel, said it
remains "bearish on Embratel's business in the long run."

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


VARIG: To Hire UBS as Restructuring Advisor
-------------------------------------------
According to Valor Economico newspaper, VARIG, S.A., will employ
UBS AG to advise the company on its reorganization plan.  UBS
will help the airline renegotiate its debt with creditors, sell
some assets and raise money with investors.

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: Recovers Domestic Market Share in July
---------------------------------------------
Ailing flagship carrier, Viacao Aerea Riograndense SA (Varig)
recovered some of its share of the domestic market in July and
regained second place, Dow Jones Newswires reports, citing
figures from Brazil's civil aviation department (DAC).

Varig's share of the domestic market moved up to 26.5% in July
from 26% in June but was still down from last year's 29.5%, DAC
figures revealed.

In the international market, Varig continued to lose ground
against its Brazilian rivals. Its share of the international
market fell to 76.9%, down from 82% a year ago, while TAM SA's
share rose to 20.9%, up from 17.5% a year ago.



===============
C O L O M B I A
===============

CHIVOR: Rating Reflects Weak Financial Profile
----------------------------------------------
Rationale


The rating on Chivor S.A. E.S.P. mainly reflects its weak
financial profile partly evidenced by the projected weak debt
service coverage for 2005 and 2006 in the context of volatile
cash generation related to the largely hydro-based Colombian
electricity system. The ratings also incorporate a limited
degree of financial flexibility deriving from restrictive terms
and conditions defined by the company's outstanding debt. These
weaknesses are partly offset by the company's portfolio of power
sales contracts mainly with local electric distribution
companies at a fixed price in Colombian pesos and indexed by
local inflation. In addition, Chivor is a low-cost generator in
Colombia's electric system and benefits from a relatively large
dam and a favorable hydrology within its region. However, it
faces significant competition from other large hydro generators.

Chivor's 1,000 MW plant is projected to generate an average of
about 4,000 gigawatt-hours (GWh) per year, from which about
2,500 GWh are projected to be sold through short-and medium-term
sales contracts (of up to three years) and the remaining 1,500
GWh marketed in the volatile spot market. Chivor's main revenue
and cash flow sources are power sales under contracts, spot
market sales, capacity revenues, and, to a lesser extent,
revenues from ancillary services such as frequency control.

In November 2004, Chivor successfully refinanced a US$260
million bank loan that originated from a restructuring process
in 2002, with proceeds from a US$170 million, 10-year bullet
secured 9.75% fixed-rate bond and a Colombian peso 210 billion
(about US$90 million) seven-year amortizing syndicated bank
loan. As a result, Chivor significantly extended its debt
maturity schedule and lowered its relatively high foreign
exchange risk. However, as the new debt reflects market rates
and the cost of the previous financing debt was the product of a
compulsory restructuring, Standard & Poor's expects Chivor's
funds from operations (FFO) interest coverage and FFO to total
average debt, which reached 3.9x and 18.1%, respectively, in
2004, to weaken to about 2x-3x and about 10%-20%, respectively,
in 2005 and 2006.

Liquidity

Standard & Poor's considers Chivor's liquidity and financial
flexibility as important credit concerns, mainly because of the
company's weak financial profile and restrictive terms and
conditions defined by the new debt, which restricts additional
debt, and also certain financial covenants regarding interest
coverage and debt ratios. However, Chivor's relatively good
financial performance in the last quarter of 2004 and also in
the first quarter of 2005, in spite of the lower power
generation, allowed it to accumulate sizable liquidity reserves
that reached almost US$20 million as of March 31 2005.

Chivor's cash generation is mostly devoted to debt service as
capital-expenditure needs are very low at about $1 million to $3
million per year, which represent only 0.2% to 0.5% of total
capital. Dividend payments are limited by a restricted payment
covenant incorporated in the bond indenture and are subject to
debt targets.

Chivor is a relatively large hydro generator in Colombia,
representing about 8% of the country's total installed capacity.
Chivor was privatized and acquired by Chile's largest thermal
generator, AES Gener S.A. (BB+/Stable/--) in December 1996. The
AES Corp. (B+/Positive/--) acquired AES Gener in January 2001.

Outlook

The positive outlook reflects the expectations that Chivor's
weak financial flexibility and projected financial ratios mainly
for 2005 will gradually improve as a result of the projected
higher power sale prices and lower interest payments resulting
from debt amortization. The ratings could be raised if the
company's debt service coverage ratios improve over above-
mentioned levels combined with a better financial flexibility.

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

Secondary Credit Analyst: Federico Mora, Mexico City
(52) 55-5081-4436; federico_mora@standardandpoors.com



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

PETROECUADOR: Pareja's Exit Linked to Corruption Claims
-------------------------------------------------------
Contrary to previous reports, Mr. Carlos Pareja wasn't asked to
resign from his post as president of state oil company
Petroecuador because of contract issues with US oil company
Occidental, says Business News Americas.

Press reports had linked Pareja's abrupt exit from the post to
his stance over a dispute between the government and Occidental
over block 15.

But according to a spokesperson at Ecuador's energy and mines
ministry, the government called for Pareja to resign after the
country's anti-corruption commission (CCCC) found out that he
owes the state US$34,000 related to a guarantee on a contract
for naphtha purchasing awarded in March 2002.

Pareja, who will be replaced by Luis Roman, a 58-year-old oil
engineer who has twice headed Petroecuador previously, denies
the CCCC claims.



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

AOL LATIN AMERICA: Court OKs Bankruptcy Services as Claims Agent
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
America Online Latin America, Inc., and its debtor-affiliates
permission to employ Bankruptcy Services LLC as their claims,
noticing and balloting agent.

Bankruptcy Services will:

1) assist the Debtors with all required notices in their
    chapter 11 cases, including notice of the initial meeting of
    creditors under Section 341(a) of the Bankruptcy Code,
    notice of objections to claims and notices of any hearings
    on a proposed Disclosure Statement and the solicitation of
    votes and confirmation of a chapter 11 Plan, and other
    miscellaneous notices necessary in the Debtors' chapter 11
    cases;

2) receive, examine and maintain copies of all proofs of claim
    and proofs of interest filed in the Debtors' chapter 11
    cases;

3) maintain official claims registers in each of the Debtors'
    cases by docketing all proofs of claim and proofs of
    interest un the applicable claims database that includes:

    a) the name and address of the claimant or interest holder
       and the date the proof of claim or proof of interest was
       received by Bankruptcy Services and the Bankruptcy Court,
       and

    b) the claim number assigned to the proof of claim or proof
       of interest the applicable debtor-affiliate against which
       the claims or interest is asserted;

4) implement necessary security measures to ensure the
    completeness and integrity of the claims registers and
    transmit to the Bankruptcy Clerk's Office a cope of the
    claims register on a weekly basis;

5) maintain an up-to-date mailing list for all entities that
    have filed proofs of claim or proofs of interest and provide
    access to the public without charge for the examination of
    copies of the proofs of claim or proofs of interest;

6) record all transfers of claims pursuant to Bankruptcy Rule
    3001(c) and provide notice of transfers as required by
    Bankruptcy Rule 3001(e);

7) oversee the distribution of applicable soliciting materials
    to holders of claims or interests against the Debtors and
    respond to material and technical distribution and
    solicitation inquiries;

8) receive, review and tabulate the ballots cast, make
    determinations with respect to the timeliness of each ballot
    and certify the results of balloting to the Court; and

9) perform all other claims processing, noticing and balloting
    services to the Debtors that are necessary in their chapter
    11 cases.

Kathy Gerber, a Senior Vice-President at Bankruptcy Services,
disclosed that her Firm received a $5,000 retainer.

Ms. Gerber reports Bankruptcy Services' professionals bill:

      Designation                   Hourly Rate
      -----------                   -----------
      Senior Managers                  $225
      & On-Site Consultants
      Senior Consultants               $185
      Programmers                   $130 - $180
      Associates                       $135
      Schedule Preparation Staff       $225
      Data Entry & Clerical Staff    $40 - $60

Bankruptcy Services assures the Court that it does not represent
any interest materially adverse to the Debtors or their estates.

Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc., -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico,
as well as localized content and online shopping over its
proprietary network.  Principal shareholders in AOLA are
Cisneros Group, one of Latin America's largest media firms,
Brazil's Banco Itau, and Time Warner, through America Online.
The Company and its debtor-affiliates filed for chapter 11
protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778).
Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection
from their creditors, they listed total assets of $28,500,000
and total debts of $181,774,000. (Troubled Company Reporter -
Tuesday, August 9, 2005, Vol. 9, No. 187)


AOL LATIN AMERICA: Files Schedules of Assets & Liabilities
----------------------------------------------------------
America Online Latin America, Inc., and its debtor-affiliates
delivered their Schedules of Assets and Liabilities to the U.S.
Bankruptcy Court for the District of Delaware, disclosing:

     Name of Schedule             Assets         Liabilities
     ----------------             ------         -----------
  A. Real Property
  B. Personal Property         $706,376,454
  C. Property Claimed
     as Exempt
  D. Creditors Holding                              $190,590
     Secured Claims
  E. Creditors Holding
     Unsecured Priority Claims
  F. Creditors Holding                          $164,050,411
     Unsecured Nonpriority
     Claims
                               ------------     ------------
     Total                     $706,376,454     $164,241,001

Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc., -- http://www.aola.com/-- offers AOL-branded
Internet service in Argentina, Brazil, Mexico, and Puerto Rico,
as well as localized content and online shopping over its
proprietary network.  Principal shareholders in AOLA are
Cisneros Group, one of Latin America's largest media firms,
Brazil's Banco Itau, and Time Warner, through America Online.
The Company and its debtor-affiliates filed for chapter 11
protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778).
Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young
Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at
Shearman & Sterling LLP represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection
from their creditors, they listed total assets of $28,500,000
and total debts of $181,774,000. (Troubled Company Reporter -
Tuesday, August 9, 2005, Vol. 9, No. 187)



=====================
P U E R T O   R I C O
=====================

DORAL FINANCIAL: Unit Signs 3-Yr Agreement With MRU Holdings
------------------------------------------------------------
MRU Holdings Inc. (OTC Bulletin Board: MHOI.OB), a specialty
finance company that provides private loans to college students,
and Doral Bank, FSB, New York (Doral Bank), a wholly owned
subsidiary of Doral Financial Corp. (NYSE: DRL) announced today
a partnership agreement whereby MRU Holdings, Inc. (MRU) will
provide a line of student private loans for Doral Bank, further
enhancing the products Doral Bank offers its customers.

Under the 3-year agreement, MRU Holdings will offer a customized
private student loan product line to Doral's undergraduate and
graduate customers.

"This partnership affords MRU an opportunity to broaden our
marketing efforts to include banks and other financial
institutions that are interested in expanding their private loan
product offering for their customers," said Vishal Garg, MRU's
Chief Financial Officer and Co-founder.  "We recognize this as
an important but underserved niche in the New York market and
believe that together we can add value to Doral Bank's current
product portfolio."

Doral strives to provide its clients with full service banking
services and will now include education financing as one of its
product offerings. "Like MRU, we believe each student regardless
of their financial situation, can subsequently attain their
educational aspirations.  We are proud to be able to offer our
customers an innovative private loan product, which will round
out our portfolio of products, as well as further this vision,"
said Paul Mak, President of Doral Bank.

Doral Bank is a federal savings bank with eight branches in the
New York metropolitan area and eight more planned by the end of
2006. Doral Bank, FSB is a subsidiary of Doral Financial Corp.,
a financial holding company which is the largest residential
mortgage lender in Puerto Rico and the parent company of Doral
Bank, a Puerto Rico commercial bank, Doral Securities, a Puerto
Rico based investment banking and institutional brokerage firm
and Doral Insurance Agency Inc.



                            ***********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 240/629-3300.


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