TCRLA_Public/050816.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Tuesday, August 16, 2005, Vol. 6, Issue 161

                            Headlines


A R G E N T I N A

BON APPETIT: Judge Approves Bankruptcy Petition
CABLEVISION: Clarin Acquires 25% Stake Thru Vistone
DISTRI GOM: Claims Reporting Due August 17
MAKI SAICAFI: Trustee to Submit General Report August 17  
MASTELLONE HERMANOS: S&P Maintains 'raD' Rating on Bonds

PUBLICIDAD Y COMUNICACIONES: Court Declares Company Bankrupt


B E R M U D A

SHADWELL FINANCIAL: Member Resolves to Wind Up Company


B R A Z I L

AES CORP.: Misses First-Quarter Filing Deadline
CSN: Says Antitrust Ruling Not Adequate
VARIG: Reduces Net Loss in 2Q05 With Lower Net Revenue


C H I L E

COEUR D'ALENE: 10-Q Differs From Previously Announced Results


C O L O M B I A

TELECOM: Government Courts Several Firms as Potential Partners


E C U A D O R

BANCO DEL PICHINCHA: Fitch Affirms Long-Term FC, Support Ratings
GRUPO PRODUBANCO: Fitch Affirms LTFC, Support Ratings


M E X I C O

BALLY TOTAL: Lenders Extend Cross Default Deadline to August 31
BALLY TOTAL: Marilyn Seymann Steps Down from Board of Directors
ELAMEX S.A.: Posts Flat Quarterly Financial Results
GRUPO MEXICO: Asarco Granted Use of Mitsui Cash Collateral
GRUPO MEXICO: Asarco Summary of Debt Structure & Liabilities

GRUPO MEXICO: Workers Delay Potential Strike Plans
VITRO: Alejandro Sanchez Joins as Executive Vice President
VITRO: S&P Assigns CCC+ Rating to Servicios y Operaciones
VITRO: S&P Releases Credit Analysis on VENA
VITRO: Ratings Reflect Company's High Financial Leverage


V E N E Z U E L A

CANTV: Supreme Court Awaits Pension Appeal
PDVSA: To Announce Strategic Plans, Financial Results
PDVSA: Reaches $200M Fuel Sale Pact with Argentina
* VENEZUELA: S&P Raises Ratings to 'B+'; Outlook Stable


     - - - - - - - - - -

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

BON APPETIT: Judge Approves Bankruptcy Petition
-----------------------------------------------
Bon Appetit S.A. was declared bankrupt after Court No. 20 of
Buenos Aires' civil and commercial tribunal endorsed the
petition of Walter Daniel Barreto for the Company's liquidation,
Argentine daily La Nacion reports.

The court assigned Ms. Silvia Davicco to supervise the
liquidation process as trustee. Ms. Davicco will validate
creditors' proofs of claim until Sep. 27, 2005.

The city's Clerk No. 40 assists the court in resolving this
case.

CONTACT: Bon Appetit S.A.
         Melincue 2706
         Buenos Aires

         Ms. Silvia Davicco, Trustee
         Avenida Presidente Roque Saenz Pena 651
         Buenos Aires


CABLEVISION: Clarin Acquires 25% Stake Thru Vistone
---------------------------------------------------
Argentine cable television firm Cablevision informed the
country's stock regulator Friday that media conglomerate Grupo
Clarin has bought a 25% stake in the Company.

In the filing, Cablevision said Grupo Clarin acquired 100% of
Vistone Ltd., which has a 50% stake in VLG Argentina LLC.

VLG Argentina owns 50% of Cablevision, and with this deal, half
of its shares were sold to Clarin for an undisclosed amount.

The remaining 50% of Cablevision is in the hands of Hicks, Muse,
Tate & Furst, Inc.

U.S. investment fund Fintech is the other shareholder in VLG
Argentina LLC. Fintech first bought 100% of VLG Argentina LLC
from Liberty Media Corp (L) in March, then transferred half of
that stake to Vistone Ltd. later that month. Local press reports
say that at the time Fintech divested that interest, it reached
a trust fund agreement with Clarin to sell the stake in
Cablevision.

Cablevision received local court approval for its US$725 million
debt restructuring in July. Financial daily El Cronista reported
Friday that 20% of Cablevision's share capital will be
distributed to the Company's creditors under a debt-for-equity
component of the Company's debt exchange.

The conclusion of the restructuring will see Hicks Muse's
Cablevision holding fall to 40%, while Fintech will have 20% and
Clarin 20%, Cronista suggested.

Cablevision is the largest cable company in Argentina, based on
the number of subscribers served, which, as of June 30, 2005,
was approximately 1.3 million. Cablevision believes that it has
the most technologically advanced distribution network in the
country. Its network passes approximately 3.6 million homes, of
which 89% are passed by cable plant with a bandwidth capacity of
at least 450 Mhz., including more than 50% that are passed by
cable plant with a bandwidth capacity of 750 Mhz.

CONTACT: Cablevision
         Santiago Pena
         Phone: (5411) 4778-6520
         E-mail: spena@cablevision.com.ar

         Martin Pigretti
         Phone: (5411) 4778-6546
         E-mail: mpigretti@cablevision.com.ar

         URL: www.cablevision.com.ar


DISTRI GOM: Claims Reporting Due August 17
------------------------------------------
The individual reports of the Distri Gom S.R.L. bankruptcy case
will be presented to court for approval tomorrow, Aug. 17, 2005.
These reports will contain the verified claims of the Company's
creditors. After the submission of the said reports, court-
appointed trustee Jose Luis Abuchdid will prepare the general
report and submit it on Oct. 13, 2005.  

Court No. 9 of Buenos Aires' civil and commercial tribunal, with
the assistance of Clerk No. 17, ordered the Company's
liquidation. The order effectively transferred control of the
Company's assets to the trustee who will supervise the
liquidation proceedings.

CONTACT: Mr. Jose Luis Abuchdid, Trustee
         Tacuari 119
         Buenos Aires


MAKI SAICAFI: Trustee to Submit General Report August 17  
--------------------------------------------------------
Ms. Ester Alicia Ferraro, the court-appointed trustee, will
submit to court the general report on the liquidation of Buenos
Aires-based company Maki S.A.I.C.A.F.I. tomorrow, Aug. 17, 2005.

The city's civil and commercial Court No. 23, with the
assistance of Clerk No. 46, handles the Company's bankruptcy
case.

CONTACT: Ms. Ester Alicia Ferraro, Trustee
         Esmeralda 960
         Buenos Aires


MASTELLONE HERMANOS: S&P Maintains 'raD' Rating on Bonds
--------------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
retained the 'raD' rating given to US$7.091 Million worth of
corporate bonds issued by Mastellone Hermanos S.A., the
Comission Nacional Valores reveals in its Web site.

The bonds were classified under `simple issue' and are described
as "Obligaciones Negociables monto original U$S225 millones."
The issue has an undated maturity.

S&P gives the `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 the Company's finances as of
June 30, 2005.

CONTACT:  MASTELLONE HERMANOS S.A.
          Av. Leandro N. Alem 720
          (1001) - Buenos Aires
          Argentina
          Phone: 54 1 318-5000
          Fax: 54 1 313-6822



PUBLICIDAD Y COMUNICACIONES: Court Declares Company Bankrupt
------------------------------------------------------------
Court No. 20 of Buenos Aires' civil and commercial tribunal
declared Publicidad y Comunicaciones S.R.L. bankrupt, says La
Nacion. The ruling comes in approval of the petition filed by
the Company's creditor, Telearte S.A. Empresa de Radio y
Television, for nonpayment of debt.

Trustee Juan Carlos Herr will examine and authenticate
creditors' claims until Sep. 27, 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. 40 assists the court on the case, which will conclude
with the liquidation of the Company's assets.

CONTACT: Publicidad y Comunicaciones S.R.L.  
         25 de Mayo 786
         Buenos Aires

         Mr. Juan Carlos Herr, Trustee
         Alicia Moreau de Justo 846
         Buenos Aires



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

SHADWELL FINANCIAL: Member Resolves to Wind Up Company
------------------------------------------------------
           IN THE MATTER OF THE COMPANIES ACT 1981
  
                            And

IN THE MATTER OF Shadwell Financial Services Opportunities
Master Fund, Ltd.

The following Resolutions of Shadwell Financial Services
Opportunities Master Fund, Ltd., were adopted the by the sole
Member by written consent on the August 10, 2005

a) THAT the Company be wound up voluntarily pursuant to the
provisions of The Companies Act, 1981; and

b) THAT Nicholas Hoskins be appointed Liquidator for the
purposes of such winding-up, such appointment to be effective
forthwith.

The Liquidator further informs that:

- Creditors of Shadwell Financial Services Opportunities Master
Fund, Ltd., which is being voluntarily wound up, are required,
on or before September 12, 2005 to send their full Christian and
Surnames, their addresses and descriptions, full particulars of
their debts or claims, and the names and addresses of their
attorneys (if any) to the Liquidator of the said Company and if
so required by notice in writing from the said Liquidator, and
personally or by their attorneys, to come in and prove their
debts or claims at such time and place as shall be specified in
such notice. In default thereof they will be excluded from the
benefit of any distribution made before such debts are proved.

- A Final General Meeting of the Members of Shadwell Financial
Services Opportunities Master Fund, Ltd. will be held at the
offices of Wakefield Quin, Chancery Hall, 52 Reid Street,
Hamilton, Bermuda on September 16, 2005 at 10:30 a.m., or soon
as possible thereafter, for the purposes of:

a) having an account laid before them showing the manner in
which the winding-up has been conducted and how the property of
the Company has been disposed of and of hearing any explanation
that may be given by the Liquidator;

b) determining by Resolution the manner in which the books,
accounts and documents of the Company and of the Liquidator
thereof, shall be disposed of; and

c) by Resolution dissolving the Company.

CONTACT: Mr. Nicholas Hoskins, Liquidator
         Wakefield Quin
         Chancery Hall
         52 Reid Street, Hamilton
         Bermuda



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

AES CORP.: Misses First-Quarter Filing Deadline
-----------------------------------------------
AES Corporation (the "Company") announced on July 27, 2005 that
it would file an amended 2004 Form 10-K and an amended first
quarter 2005 Form 10-Q restating all periods presented.

The Company said that restatement adjustments, which were
identified as a result of the Company's review of deferred tax
accounts, primarily relate to the accounting treatment for
deferred taxes associated with certain acquisitions, foreign
currency re-measurement of deferred tax balances in certain
subsidiaries where the U.S. dollar is the functional currency,
and the reconciliation of income tax returns to deferred tax
balances.

In addition, restatement adjustments will be made for
consolidation, acquisition and translation accounting errors
related to certain subsidiaries, which recently were identified.
The Company has not completed its analysis and has not
determined the final amount of the adjustments.

The Company will file an amended 2004 Form 10-K and an amended
first quarter 2005 Form 10-Q reflecting the restated amounts as
soon as practicable. Because of the additional time required to
quantify the adjustments for such restatement and since a final
resolution of the restated amounts is necessary in order to
prepare the financial statements for its current quarterly
report, the Company could not file its Form 10-Q for the period
ending June 30, 2005 on or before August 9, 2005.

Based on what the Company has identified to date, the
adjustments will impact deferred tax balances, fixed assets,
goodwill, minority interest payable and the other comprehensive
income portion of stockholder's equity within the balance sheet
and interest expense, income tax expense, depreciation expense,
minority interest expense and foreign currency gains and losses
within the income statement. Previously reported goodwill
impairment charges will also be adjusted. There are currently no
impacts on revenues or net cash from operating activities. The
Company has not completed its analysis and has not yet
determined the final nature and amount of all adjustments.

CONTACT: AES Corporation
         Media Contact
         Robin Pence
         Phone: 703-682-6552
                  or
         Investor Contact
         Scott Cunningham
         Phone: 703-682-6336


CSN: Says Antitrust Ruling Not Adequate
---------------------------------------
Steelmaker Companhia Siderurgica Nacional (CSN) applauded a
decision by the antitrust council to order iron ore producer
Cia. Vale do Rio Doce (CVRD) to give up a preferential purchase
option for iron ore at a mine owned by CSN. The decision stems
from a complaint by CSN and other metal producers that CVRD had
too much power.

However, CSN President Benjamin Steinbruch considered the ruling
"timid" from the point of view of encouraging competition.

Mr. Steinbruch said the government body should have gone further
and ordered CVRD to divest itself of five small mining companies
it bought between 2000 and 2001.

"CVRD should have been obliged (by the council) to share some of
its monopoly power," Mr. Steinbruch said.

Mr. Steinbruch also expressed disappointment over the antitrust
council's decision to allow CVRD to restrict its decision-making
powers on the board of directors of MRS Logistica, a railroad
company that controls key transport links from steel and iron-
ore fields to Atlantic ports.

"The council should have ordered CVRD to divest itself of its
stake (in MRS Logistica)," Mr. Steinbruch said.

Meanwhile, CVRD wants compensation for surrendering a 20-year
contract that allows it to sell ore from CSN's Casa de Pedra
mine.

CVRD Chief Executive Roger Agnelli said he's ready to negotiate
with CSN's Chief Execuive Benjamin Steinbruch on the value of
the contract or go to court to secure "the rights of thousands
of shareholders."

"We accept the [antitrust] ruling, but believe that there is
still a contract between us and CSN and that it has significant
value," Mr. Agnelli said.

But according to Mr. Steinbruch: "There's no possibility that
CSN will pay any type of compensation for this decision. If Vale
[CVRD] exercised its right to buy ore from the mine it would
lose money and we can't really compensate Vale for the fact it
won't have a loss anymore."

CVRD has 30 days to comply with the ruling or face a fine of
BRL53,200.

CONTACT: Mr. Marcos Leite Ferreira
         CSN - Investor Relations
         Phone: (55 11) 3049-7591
         E-mail: marcos.ferreira@csn.com.br
         Web site: http://www.csn.com.br/


VARIG: Reduces Net Loss in 2Q05 With Lower Net Revenue
------------------------------------------------------
Flagship airline Viacao Aerea Riograndense SA (Varig) reported a
net loss of BRL342.4 million (US$144.2 million) for the second
quarter of the year, down 13% from BRL393.9 million a year
earlier. The improvement came despite the fact that net revenue
was down 3.6% at BRL2.02 due to strong competition and lower
prices.

Market share fell to 26.5% at the end of the quarter from 31.2%
a year ago, even though passenger numbers rose around 10% both
on flights inside the country and abroad as Brazilians started
to travel more, encouraged by a stronger economy.

The Company's fuel costs in the first six months of the year
jumped 24%. Varig closed June with a fleet of 88 aircraft, down
from 92 a year earlier.

Varig said it benefited from exchange-rate variations, as the
real appreciated about 14% during the quarter.

The Company has asked for protection from creditors as it tries
to restructure nearly BRL7 billion in debt. Analysts say it
needs a cash injection urgently to keep flying. It is in talks
with Portuguese airline TAP for a partnership deal. TAP had
earlier been studying the possibility of taking an up to 20%
stake in Varig, but this deal never materialized.



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

COEUR D'ALENE: 10-Q Differs From Previously Announced Results
-------------------------------------------------------------
Coeur d'Alene Mines Corporation (the "Company") filed Friday its
Form 10-Q for the quarter ended June 30, 2005, saying that the
financial results for such period differed in certain respects
from the previously disclosed financial results [reported in the
Troubled Company Reporter - Latin America on Friday, August 12,
2005, Vol. 6, Issue 159].

In the filing, the Company said that the reported net loss for
the three- and six-month periods ended June 30, 2005 is $1.7
million and $3.5 million, respectively, compared to $1.5 million
and $3.3 million, respectively, as previously reported.

The item most significantly contributing to the difference in
the reported net loss is the income tax (provision) benefit,
which for the three- and six-month periods ended June 30, 2005
amounts to $147,000 and $(532,000), respectively.

To see financial results: http://bankrupt.com/misc/COEUR.htm

CONTACT: Coeur D'Alenes Mines Corp.
         400 Coeur d'Alene Mines Bldg.
         505 Front Ave.
         P.O. Box I
         Coeur d'Alene, ID 83816-0316
         USA
         Phone: 208-667-3511



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

TELECOM: Government Courts Several Firms as Potential Partners
--------------------------------------------------------------
The Colombian government is now looking at several companies to
become a partner in state-run operator Colombia
Telecomunicaciones (Telecom), says Business News Americas.
Already in advanced negotiations with Telmex, the government is
also mulling a partnership with other state-run companies such
as ETB, EPM or Emcali.

Telecom is only looking for a commercial alliance to add mobile
services to its portfolio, and the search for a partner cannot
be considered an attempt to privatize all or part of the
Company, according to Telecom president Alfonso Gomez.

One of the conditions to establish a partnership is for
Telecom's partner to pay pension liabilities totaling COP5.9
billion (US$2.56mn) and to guarantee service coverage in rural
areas.

These conditions are similar to those requested by Colombia's
comptroller although this entity has suggested Telecom should
select a partner within a public bidding process, which will
stop all talks with Telmex.



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

BANCO DEL PICHINCHA: Fitch Affirms Long-Term FC, Support Ratings
----------------------------------------------------------------
Fitch Ratings has affirmed the long-term foreign currency and
support ratings assigned to Banco del Pichincha and Subsidiaries
at 'B-' and '5', respectively. At the same time, Fitch has
assigned a short-term rating of 'B' to the bank.

Banco del Pichincha C.A. y Subsidiarias' (BPS) ratings reflect
its strong and established franchise in Ecuador, its broad
deposit base, good liquidity and its improving financial
performance. They also reflect concerns over tight, albeit
improving capital, as well as its volatile operating
environment.

BPS is comprised of 19 financial companies located in Ecuador,
Peru, Colombia, the Bahamas and Miami. Its principal subsidiary
is BP, the largest bank in Ecuador with an established position
in corporate, middle market and consumer banking and domestic
loan and deposit market shares of 23.9% and 25.5%, respectively
at end-2004. Control of BPS is held by Mr. Fidel Egas Grijalva,
a prominent Ecuadorian entrepreneur who held an equity stake, of
62.1% at end-2004. The balance was widely held.

CONTACT:  Fitch Ratings
          Linda Hammel, 212-908-0303
          Peter Shaw, 212-908-0553
          Patricio Baus, + 5932 222 2323 (Quito)

          Kenneth Reed, 212-908-0540 (Media Relations, New York)


GRUPO PRODUBANCO: Fitch Affirms LTFC, Support Ratings
-----------------------------------------------------
Fitch Ratings has affirmed the long-term foreign currency and
support ratings assigned to Banco de la Produccion S.A.
Produbanco y Subsidiarias' (Grupo Produbanco) at 'B-' and '5',
respectively. At the same time, Fitch has assigned a short-term
rating of 'B' to the bank.

Grupo Produbanco's ratings, which are at the country ceiling,
reflect its established position within the corporate market,
professional management, its strong liquidity position and
adequate, albeit weakening performance. They also reflect the
risks associated with the volatile operating environment.

The group is comprised of several financial firms in Ecuador,
the principal of which, Banco de la Produccion S.A.
(Produbanco), the third largest private bank in Ecuador,
accounted for 81% of group assets at end-2004. Traditionally
focused in the corporate market, the bank has expanded into
consumer banking over the past few years.

CONTACT:  Linda Hammel +1-212-908-0303, New York
          Peter Shaw +1-212-908-0553, New York
          Patricio Baus + 5932 222 2323, Quito

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



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

BALLY TOTAL: Lenders Extend Cross Default Deadline to August 31
---------------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE: BFT) has received
consent from the lenders under its $275 million secured credit
agreement to extend to August 31, 2005 the cross default
deadline relating to Bally's financial reporting covenant
defaults under its public bond indentures.

As previously announced, the Company recently received default
notices under its indentures that would have triggered a cross-
default under Bally's credit agreement on August 14, 2005. As a
result of the consent from the lenders under the credit
agreement, the cross-default deadline has been extended until
August 31, 2005. After that date, unless the indenture financial
reporting covenant defaults are cured or waived, over $700
million of Bally's debt obligations under its credit agreement
and indentures could become immediately due and payable.

The Company continues to negotiate with noteholders to secure an
extension of the financial reporting covenant default waiver,
and has received consent from holders of 96.33% of the Senior
Notes and 42.83% of the Senior Subordinated Notes. The Company
also announced that it will extend the consent period until
August 18, 2005.

Except as set forth herein, the terms of the Consent
Solicitations remain the same as set forth in the Consent
Solicitation Statements previously distributed to noteholders.

As previously announced, Bally has retained Deutsche Bank
Securities Inc. to serve as its solicitation agent and MacKenzie
Partners, Inc. to serve as the information agent and tabulation
agent for the consent solicitation. Questions concerning the
terms of the consent solicitation should be directed to Deutsche
Bank Securities Inc., 60 Wall Street, 2nd Floor, New York, New
York 10005, Attention: Christopher White. The solicitation agent
may be reached by telephone at (212) 250-6008. Requests for
documents may be directed to MacKenzie Partners, Inc., 105
Madison Avenue, New York, New York 10016, Attention: Jeanne Carr
or Simon Coope. The information agent and tabulation agent may
be reached by telephone at (212) 929-5500 (call collect) or
(800) 322-2885 (toll-free).

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


BALLY TOTAL: Marilyn Seymann Steps Down from Board of Directors
---------------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE:BFT) announced
Friday that Marilyn Seymann will step down from the Board of
Directors, effective today. Dr. Seymann, who was appointed to
the Board in May of this year, cited her new position as
Associate Dean of Arizona State University Law School as the
reason for her departure.

"Bally Total Fitness and its shareholders deserve directors with
more time than I can currently commit to support the turnaround
plan in progress. When I accepted the position of director at
Bally, I had not yet begun my new responsibilities as Associate
Dean. I am concerned about my ability to devote the necessary
time to Bally given this new job and my other responsibilities,"
said Dr. Seymann. "I accepted the position on the Board because
I wanted to contribute to the turnaround at Bally, and while I
regret the need to depart after a short period, I feel confident
that the Company is on the right path and has a strong plan that
Paul has developed and will be implemented under his
leadership."

"Although Marilyn's tenure on the Board was relatively short, we
thank her for her contributions and her service to the Company,"
said Chairman and CEO Paul Toback. "We wish Marilyn well in her
new position, and we know that Arizona State University Law
School will benefit from her leadership."


ELAMEX S.A.: Posts Flat Quarterly Financial Results
----------------------------------------------------
Elamex S.A. DE C.V. reported in its Form 10-Q a gross profit of
$5.9 million or 21.7% of net sales, with operating expenses
reaching $3.6 million for the three months ended June 30, 2005.

Managements Discussion and Analysis of Financial Condition and
Results of Operations

Overview

The Company reports and analyzes its operations based on the
markets the Company serves. The Company reportable segments are
1) Food, 2) Real Estate, formerly Shelter Services.

Food segment

The Food segment is the Franklin business, a general line candy
manufacturer and a retail/food service nut packing and
processing company, located in El Paso, Texas and a candy
manufacturing and packaging facility located in Juarez, Mexico.
This business was acquired in July 2002.

Candy manufacturing is conducted in a dedicated candy
manufacturing plant of approximately 180,000 square feet located
in Juarez, Mexico. Nut packaging is conducted in Franklins
approximately 185,000 square foot packaging plant in El Paso,
Texas. Additionally, Franklin, through its Sunrise Confections
Division, offers both contract manufacturing and shelter
services for U.S. candy companies who market the candy produced
in Franklins candy manufacturing plant. Franklin distributes its
products through mass merchandisers, grocery retailers, drug
store chains, wholesalers, national and regional food service
companies; large U.S. food products companies and U.S. based
candy and confection companies.

Real Estate segment

The Real Estate segment, formerly Shelter Services Segment, is
now dedicated to lease industrial buildings to third parties in
Mexico. In July 2003 Elamex sold certain shelter operations and
the Shelter services were limited to the Franklin affiliate. In
January 1, 2005 the Shelter services rendered to Franklin were
reclassified to the Food segment.

Net sales

Net sales for the three months ended June 30, 2005 increased
$3.9 million, or 16.8%, to $27.3 million, from $23.4 million for
the comparable period in 2004. Net sales for the six months
ended June 30, 2005 increased $9.8 million, or 22.8%, to $53.0
million, from $43.2 million for the comparable period in 2004.

Net sales increases for the food segment were primarily the
result of increased sales volume and price increases on nutmeat
products. The cost of most nuts in the Company sales mix
increased substantially during the period. As is common in the
industry, the Company increases or decreases selling prices in
response to changes in commodity costs. As described below, the
changes are neither proportional nor contemporaneous.

Gross profit

Gross profit for the three months ended June 30, 2005 was $5.9
million or 21.7% of net sales, compared to $6.0 million or 25.8%
of net sales for the same period of the prior year. Gross profit
for the six months ended June 30, 2005 was $11.3 million or
21.4% of net sales, compared to $10.7 million or 24.7% of net
sales for the same period of the prior year.

Gross profit for the Food segment for the three months ended
June 30, 2005 decreased $107 thousand, or 1.8%, to $5.7 million
from $5.8 in the second quarter of the prior year. As a
percentage of net sales, the gross profit margin decreased to
21.4% in second quarter 2005 from 25.5% in second quarter 2004.
Gross profit for the six months ended June 30, 2005 increased
$632 thousand, or 6.2%, to $10.9 million from $10.2 in the same
period of the prior year. As a percentage of net sales, the
gross profit margin decreased to 20.9% in the first half of 2005
from 24.3% in the comparable period of 2004. The increase in the
amount of gross profit for the first half of 2005 is primarily
attributable to the increase in sales. The decline in the gross
profit margin, and gross profit as a percent of net sales for
the second quarter of 2005 is due to multiple factors.

First addressing the sale of nut products, a primary cause of
the change in margins is the impact of market forces on the
selling prices of nut products during periods of rapid increases
in commodity costs. Additionally, terms of customer sales
agreements often require a notice period before a change in
pricing can be affected. Changes in sales prices are not
necessarily proportional to changes in commodity costs, and the
timing of price changes is generally delayed in comparison to
changes in the spot prices of the commodity. Changes in the mix
of products sold also affect gross profit margins.

Changes in the classification of certain costs increased cost of
goods sold for candy products, with an offsetting decrease in
interest expense. This change was caused by the termination of
an agreement to purchase the candy production plant, which
resulted in the accounting recognition of a termination of a
capitalized lease in the third quarter of 2004 and the
commencement of recognition of rent expense as a manufacturing
cost. This accounting change had little overall effect on total
company expenses.

Partially offsetting the cost increases described above, cost of
goods sold for candy products was favorably impacted by year
over year increases in production volume.

Operating expenses

Operating expenses were $3.6 million for the three months ended
June 30, 2005, compared to $5.1 million, for the same period of
the prior year. Operating expenses were $8.5 million for the six
months ended June 30, 2005, compared to $10.1 million, for the
same period of the prior year.

Operating expenses for Food segment for the three months ended
June 30, 2005 were $4.9 million or 18.2% of Food segment net
sales compared to $4.3 million or 18.9% of sales for the same
period in the prior year. Operating expenses for the six months
ended June 30, 2005 were $9.5 million or 18.2% of Food segment
net sales compared to $8.5 million or 20.3% of sales for the
same period in the prior year. Operating expenses decreased as
percentage of Food segment net sales in both the second quarter
and first half of 2005, primarily due to increases in sales
volume. Also, during the second quarter of 2004 a contingency
accrual of $430 thousand recorded in 2003 was reversed to
income. The increase in sales volume without a corresponding
increase in costs was the primary cause for the percentage
decrease. Administrative expenses increased approximately $561
thousand for the second quarter of 2005 and $913 thousand for
the first half of 2005, primarily due to the $430 thousand
accrual reversal and increases in salaries and consulting fees.
Distribution expenses increased approximately $302 thousand for
the first half of 2005, primarily due to increases in sales
volume and to fuel cost increases.

Operating expenses for Corporate for the three months ended June
30, 2005 decreased to a negative $1.3 million from $724 thousand
for the same period in the prior year. Operating expenses for
the six months ended June 30, 2005 decreased to a negative $995
thousand from $1.4 million for the same period in the prior
year. The decrease was primarily due to the reversal of a
liability of $1.7 million recorded in the fourth quarter of 2004
in connection with Qualcores bank loan guarantee. There was also
a decrease in administrative expenses due to a decrease in
consulting and legal fees and the forfeiture of stock options
due to the termination in the fourth quarter of 2004 of a
corporate executive.

Other income (expense)

Other expense for the three months ended June 30, 2005 was $227
thousand, compared to $536 thousand for the same period of the
prior year. Other expense for the six months ended June 30, 2005
was $177 thousand, compared to $1.1 million for the same period
of the prior year.

Other expense for Food segment for the three months ended June
30, 2005 was $209 thousand compared to $537 thousand for the
same period in the prior year. Other expense for the six months
ended June 30, 2005 was $402 thousand compared to $1.1 million
for the same period in the prior year. The decrease was
primarily due to the decrease in interest expense of
approximately $316 and $640 for the second quarter and first
half of 2005, respectively, mostly due to the change of a
capital lease to an operating lease.

Other expense for Corporate for the three months ended June 30,
2005 was $3 thousand compared to $9 thousand for the same period
in the prior year. Other income for the six months ended June
30, 2005 was $253 thousand compared to $6 thousand for the same
period in the prior year. During the first quarter of 2005 a
contingency accrual of $125 thousand was reversed to income as a
result of the successful resolution of a contingency for which
an accrual was recorded in during 2004 and approximately $117
thousand were due to the collection of 2003 payroll taxes in
connection with a successful resolution.

Taxes

The tax provision for the three months ended June 30, 2005 was
$308 thousand compared to $424 thousand for the same period in
the prior year. The tax provision for the six months ended June
30, 2005 was $602 thousand compared to $493 thousand for the
same period in the prior year.

The Company Mexican subsidiaries are each required to pay an
alternative minimum asset tax if the asset tax calculation is
greater than income tax expense for the year. Asset taxes are
calculated at 1.8% of assets less certain liabilities and can be
carried forward for up to 10 years as credits against future
income taxes. Before any asset tax carry forwards can be
applied, all net operating losses must first be utilized.
Mexican companies have the option to defer the asset tax four
years forward and determine the higher of the taxes comparing
the current income tax calculation and the four-year-old asset
tax calculation increased by the effects of inflation. Some of
the Company subsidiaries have elected this option. The total
asset tax expense for the Company subsidiaries for the three and
six months ended June 30, 2005 was approximately $308 thousand
and $602 thousand, respectively, and for the three and six
months ended June 30, 2004 was approximately $262 thousand and
$696 thousand, respectively.

Goodwill

The Company net goodwill balance as of June 30, 2005 is $3.7
million, and it is related to the acquisition of Franklin in the
third quarter of 2002. The Company completed its annual
impairment test of the Franklin goodwill during the first
quarter of 2005 and determined that there was no impairment of
goodwill to be recorded.

Net income (loss) and income (loss) per share Net income for the
three months ended June 30, 2005 was $2.0 million compared to a
net loss of $409 thousand for the same period of 2004. For the
three months ended June 30, 2005 basic and diluted net income
per share was $0.26, compared to a net loss of $0.05 for the
same period of the prior year. Net income for the six months
ended June 30, 2005 was $2.0 million compared to a net loss of
$1.8 million for the same period of 2004. For the six months
ended June 30, 2005 basic and diluted net income per share was
$0.27, compared to a net loss of $0.23 for the same period of
the prior year. The weighted average number of shares used to
calculate basic and diluted net loss per share for the three and
six months ended June 30, 2005 and 2004 were 7,502,561.

Liquidity and Capital Resources

The Company working capital (defined as current assets minus
current liabilities) as of June 30, 2005 was $411 thousand
compared to a negative $1.8 million as of December 31, 2004. The
increase in working capital was primarily due to the reversal of
Qualcores bank debt guarantee of $1.7 million, and the
reclassification of $1.4 million from notes payable to long-term
debt in connection with the renewal of a bank term loan relating
to the El Paso, Texas plant and administrative offices of
approximately $1.7 million.

For the six months ended June 30, 2005 the net cash used in
operating activities was approximately $1.1 million.

Net cash used in investing activities was approximately $154
thousand for the six months ended June 30, 2005, due to the
acquisition of equipment.

Net cash provided by financing activities was $564 thousand for
the six months ended June 30, 2005 primarily due to an increase
in the use of the line of credit.

The available cash for the period ended June 30, 2005 and 2004
was $1.4 million and $1.5 million, respectively.

We anticipate that with existing working capital and balances in
cash and funds available under our revolving credit facility
will be sufficient to fund operating expenses, debt obligations
and capital commitments. The Company has commitments on capital
expenditures for the third quarter of 2005 of approximately $450
thousand. The Company also has certain buildings available for
sale or additional borrowing, should this be necessary.

On April 30, 2005, Franklins line of credit facility was renewed
for an additional year. The line was increased from $7 million
to $9 million in connection with the renewal and continues to be
subject to the same collateral limitations on eligible trade
receivables and inventory.

Critical accounting policies and estimates Please refer to the
Company annual report on Form 10-K for the year ended December
31, 2004 for a summary of the Company's critical accounting
policies.

To see Results of Operations Managements discussion and analysis
based on the results of operations by segment:
http://bankrupt.com/misc/ELAMEX.htm

CONTACT: Elamex S.A. de C.V.
         1800 Northwestern Drive
         El Paso, TX 79912
         Phone: 915-298-3061
         Fax: 915-298-3065
         Web Site: http://www.elamex.com


GRUPO MEXICO: Asarco Granted Use of Mitsui Cash Collateral
----------------------------------------------------------
ASARCO LLC doesn't have enough unencumbered cash to fund its
operations during the pendency of its Chapter 11 case.  Thus, it
needs immediate access to cash collateral securing repayment of
its prepetition obligations to Mitsui & Co. (U.S.A.), Inc.

Karen C. Paul, Senior Assistant General Counsel for ASARCO LLC,
relates that in March 1999, Mitsui and ASARCO Inc., a
predecessor of the Debtor, entered into a financing transaction
whereby ASARCO sold Mitsui 1,000,000 troy ounces of 99.9% pure
silver, which Mitsui then immediately leased back to ASARCO.  
Later that month, the amount of silver increased to 3,000,000
ounces.

By 2002, ASARCO had consumed or sold all of the silver subject
to the agreements.  ASARCO owes Mitsui $21 million.

To secure payment of this debt, Mitsui negotiated broader
security agreements with ASARCO, and obtained a guaranty from
ASARCO's parent company, Grupo Mexico, S.A. de C.V.

                         Mitsui's Lien

According to Ms. Paul, Mitsui asserts a lien against the
Debtor's inventory of silver, including work in process
inventory, like copper anodes and concentrates.  "The lien does
not expressly extend to accounts receivable, but does extend to
proceeds of silver inventory."

The Mitsui lien purports to secure a contractual obligation to
pay the value of 3,000,000 ounces of silver to Mitsui.  The lien
is under-secured, Ms. Paul says.

As of July 31, 2005, the Debtor's inventory report showed only
2,278,000 ounces of silver inventory, valued at approximately
$16,510,000.  The Debtor is in the process of updating its
inventory report as of the Petition Date.

In addition, the Debtor has determined that, as of the Petition
Date, it has received approximately $1,280,000 on account of
unidentifiable silver contained in sheets of copper anode that
was sold and delivered in the ordinary course of business in the
20 days immediately preceding the Petition Date.  The Debtor
reserves the right to dispute the validity, enforceability and
extent of Mitsui's lien.

                        Other UCC Filings

Ms. Paul relates that the Debtor ran several UCC-1 lien searches
to confirm that no party other than Mitsui held or asserted a
lien against any of the Debtor's personal property.  These lien
searches revealed two types of UCC filings:

   (1) there were old UCC-1s filed by former creditors that
       should be withdrawn or terminated because the debt has
       been paid in full; and

   (2) ASARCO accepts concentrates and other work-in-process
       materials from third parties under toll agreements.

ASARCO smelts or refines the customer's product for a fee and
returns the smelted or refined product, as the case may be, back
to the Toll Party.  ASARCO benefits from those toll agreements
by:

   -- earning servicing revenue, and

   -- utilizing what would otherwise be under-capacity in its
      smelters and refinery, which in turn reduces ASARCO's per
      unit cost for smelting and refining ASARCO's own
      inventory.

Many of these Toll Parties filed precautionary UCC filings
notifying third parties of their interest in materials in
ASARCO's possession.

Ms. Paul tells Judge Schmidt that the Debtor does not in any way
concede that any party holds a validly perfected and enforceable
lien against its inventory, accounts receivable or prepetition
cash, or that any cash received on account of alleged
prepetition collateral would constitute cash collateral.

                       Adequate Protection

The Debtor will segregate -- and not spend -- proceeds allocated
to the sale of silver inventory as those proceeds are received
in the ordinary course pending a final hearing on its request.

The Debtor will agree to segregate $1,280,000 upon entry of an
interim order.

"Segregating the proceeds prevents any potential diminution of
value in Mitsui's collateral, and thus Mitsui is adequately
protected until this Motion can be set for a final hearing," Ms.
Paul says.

At the final hearing, ASARCO proposes to grant adequate
protection for the use of silver proceeds after that final
hearing in this manner:

   a. The Debtor will continue to provide Mitsui with silver
      inventory reports on a monthly basis, as it did prior to
      bankruptcy; and

   b. To the extent Mitsui is determined to hold a validly
      perfected and unavoidable lien on silver inventory, and to
      the extent that Mitsui suffers a diminution in the value
      of its collateral after the Petition Date, the Debtor
      will grant Mitsui:

         (i) a replacement lien on silver inventory acquired
             after the Petition Date, and

        (ii) a super-priority claim that will have priority
             over,  and be senior to, all other administrative
             claims, except with respect to any administrative
             claim of a postpetition DIP lender.

Excluding Mitsui, the Debtor believes that all other parties
with a UCC filing either:

   (i) have been paid in full prior to the Petition Date, and
       thus have no interest in the Debtor's cash, or

  (ii) have delivered their property to the Debtor for refining
       services in exchange for a fee, and thus have filed
       their UCC's in an abundance of caution.

The Debtor intends to honor its contractual obligations under
its toll contracts and will not sell the materials that are the
subject of those contracts to a third party.  Under those
circumstances, the Debtor asserts that no adequate protection is
required for those parties.

                         Court's Ruling

Judge Schmidt grants ASARCO LLC authority to use cash collateral
on an interim basis.

Pending a final hearing, the Court directs ASARCO to deposit by
August 17, 2005, $1,280,000 of proceeds of Mitsui & Co.
(U.S.A.), Inc.'s collateral in a newly established separate
segregated bank account.

As ASARCO sells its copper inventory, the Debtor is directed to
continue allocating the proceeds to silver inventory in the same
manner that it has done previously.

As proceeds of Mitsui's collateral are received, the Debtor will
promptly deposit into the Mitsui Cash Collateral Account that
portion of the proceeds that the Debtor has allocated to silver
inventory.

In the event that the Debtor determines that it needs to use
funds in the Mitsui Cash Collateral Account, the Debtor may
request an emergency hearing, on at least three business days'
notice to Mitsui and its counsel, before the Court, provided
however, that Mitsui will be entitled to seek further
protection, including adequate protection, at the hearing.

The Court directs the Debtor to provide Mitsui with reports of
the amount of silver inventory on a bi-weekly basis and of the
amount of the Cash Collateral that is segregated in the Mitsui
Cash Collateral Account on a weekly basis pending a final
hearing.

The Court will convene a final hearing on August 30, 2005, at
10:30 a.m. in Corpus Christi.  Any objection to the Debtor's
request must be filed by August 25.

Stephen A. Goodwin, Esq., at Carrington, Coleman, Sloman &
Blumenthal, LLP, in Dallas, Texas, represents Mitsui in ASARCO's
Chapter 11 case. (Troubled Company Reporter, Monday, August 15,
2005, Vol. 9, No. 192)


GRUPO MEXICO: Asarco Summary of Debt Structure & Liabilities
------------------------------------------------------------
In papers filed with the U.S. Bankruptcy Court in Corpus
Christi, Texas, ASARCO LLC provides a concise summary of its
funded debt obligations and contingent liabilities:

===================
Bond and Lease Debt
===================

ASARCO has approximately $440 million in long-term bond debt,
with maturities ranging from April 2013 to October 2033:

  Creditor                  Coupon  Maturity      Obligation
  --------                  ------  --------      ----------
  Lewis & Clark County
  Environmental Bond (IRB)  5.85%   Oct. 2033    $34,800,000

  Nueces River
  Environmental Bond (IRB)  5.60%   Jan. 2027    $27,740,000

  Lewis & Clark County
  Environmental Bond (IRB)  5.60%   Jan. 2027    $33,160,000

  Gila County --
  Installment Bond          5.55%   Jan. 2027    $71,900,000

  CSFB Corporate Debentures 8.50%   May  2025   $150,000,000

  Nueces River
  Environmental Bond (IRB)
  Series 1998 A             5.60%   Apr. 2018    $22,200,000

  CSFB JP Morgan
  Secured Debentures        7.875%  Apr. 2013   $100,000,000

=================
Other Funded Debt
=================

  Creditor                                         Obligation
  --------                                         ----------
  Mitsui & Company (U.S.A.), Inc.                 $21,000,000

  Other Funded Debt                                $9,000,000

=========================
Environmental Obligations
=========================
As a result of ASARCO's 105 years of operating history, ASARCO
and certain of its non-operating subsidiaries are subject to
actual and potential environmental remediation obligations at
numerous sites around the country.  There are approximately 94
sites spread over approximately 21 states, in which ASARCO or
one of its subsidiaries is alleged to be responsible for
environmental clean-up costs, in some cases at the state level
(approximately 45 sites), in other cases at the federal level
(approximately 38 sites), and in some cases both (approximately
10 joint federal/state sites).  ASARCO is a party to numerous
consent decrees and lawsuits brought by federal and state
governments and private parties as a result of the company's
lead, zinc, cadmium, arsenic, and copper mining, smelting, and
refining operations.  A three-year standstill agreement with the
federal government ends in early 2006, and the company is
feeling rising pressure from federal and state governments to
meet increased remediation demands.

=======================
Asbestos-Related Claims
=======================
ASARCO's alleged asbestos liabilities relate primarily to
historical operations of its CAPCO and LAQ subsidiaries.
Although LAQ has not milled asbestos since the late 1980s and
CAPCO has not produced asbestos-containing products for over a
decade, by the late 1990s, both CAPCO and LAQ had been named in
thousands of asbestos lawsuits around the country.  As a result
of the massive asbestos litigation, five of ASARCO's non-
operating subsidiaries filed the Subsidiary Cases currently
pending in the U.S. Bankruptcy Court for the Southern District
of Texas.

Having never mined, milled, manufactured or sold asbestos or
asbestos-containing products, ASARCO has no direct liability for
any materials or products mined, milled, manufactured or sold by
CAPCO or LAQ.  Nonetheless, ASARCO has been named as defendant
in a large number of the asbestos actions against either CAPCO
or LAQ.  Although a limited number of the claims are based on
direct theories of liability, the majority are derivative of
claims against CAPCO or LAQ.  To address the derivative actions
in a consolidated manner, on June 15, 2005, ASARCO filed an
Adversary Proceeding in the Bankruptcy Court seeking a
declaration that it is not liable under any alter ego theory for
asbestos claims asserted against LAQ or CAPCO.  That proceeding
is captioned ASARCO LLC v. Lac d'Amiante du Quebec Ltee, et al.,
Adv. Pro. No. 05-02048, and names the future claimants'
representative appointed in the Subsidiaries' chapter 11 cases
as a defendant. A copy of that 15-page Complaint, is available
at no charge at http://bankrupt.com/misc/05-02048-001.pdf The  
parties to that lawsuit have agreed to extend the deadline for
answering or otherwise defending the complaint to Sept. 13,
2005.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,  
melting
and refining company.   Grupo Mexico S.A. de C.V. is ASARCO's
ultimate parent.  The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).  James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby
A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its
restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $600 million in total assets and
$1 billion in total debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-
20521 thru 05-20525).  They are Lac d'Amiante Du Quebec Ltee,
CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos Of Quebec, Ltd., and LAQ Canada, Ltd.  Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.  ASARCO has asked
that the five subsidiary cases be jointly administered with its
chapter 11 case. ASARCO Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., 215/945-7000).


GRUPO MEXICO: Workers Delay Potential Strike Plans
--------------------------------------------------
Workers at all the mining operations of Grupo Mexico in Sonora
state, including Mexico's two biggest copper mines of La Caridad
and La Cananea, balked at a plan to go on strike Friday, reports
Dow Jones Newswires.

Some 4,000 workers at five mining and refinery facilities of
Grupo Mexico had planned to carry out a strike to support
workers at Asarco Inc., which have been on strike since early
July over a labor dispute.

"Everything is normal here, all operations are continuing, there
is no strike," Dow Jones Newswires quoted a worker at La Caridad
as saying.

According to union officials, the strikes have been put off
until Monday where work stoppages now are planned in units
across the country in sympathy of both the Grupo Mexico workers
at Asarco, as well as steel workers at the Sicartsa facilities
in Mexico's central Michoacan state who have been on strike
since Aug. 1.

"The Grupo Mexico strike have been called off until Monday,
where they will be part of nationwide sympathy strikes," Dow
Jones Newswires quoted an official from the Mexican Mining and
Metallurgical Workers Union as saying.

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


VITRO: Alejandro Sanchez Joins as Executive Vice President
----------------------------------------------------------
Vitro, S.A. de C.V. (NYSE: VTO; BMV: VITROA) announced Friday
that Alejandro Sanchez joined the Company as Executive Vice
President and General Counsel in substitution of Francisco
Romero, who has decided to retire from Vitro to embrace personal
projects.

Mr. Sanchez served as partner of Thompson & Knight, a well-known
Legal firm and throughout his career has worked with leading
Monterrey-based companies.

Vitro, S.A. de C.V. (BMV:VITROA; NYSE: VTO) through its
subsidiary companies, is one of the world's leading glass
producers. Vitro is a major participant in three principal
businesses: flat glass, glass containers and glassware. Vitro
serves multiple product markets, including construction and
automotive glass; food and beverage, wine, liquor, cosmetics and
pharmaceutical glass containers; glassware for commercial,
industrial and retail uses. Founded in 1909 in Monterrey,
Mexico-based Vitro has joint ventures with major world-class
partners and industry leaders that provide its subsidiaries with
access to international markets, distribution channels and
state-of-the-art technology. Vitro's subsidiaries have
facilities and distribution centers in eight countries, located
in North, Central and South America, and Europe, and export to
more than 70 countries worldwide.

CONTACT: Vitro, S. A. de C.V.
         Media Monterrey
         Albert Chico Smith
         Phone: 52 (81) 8863-1335
         E-mail: achico@vitro.com

         Investor Relations
         Leticia Vargas/Adrian Meouchi
         Phone: 52 (81) 8863-1219/1350
         E-mail: lvargasv@vitro.com
                 ameouchi@vitro.com

         U.S. Contacts
         Susan Borinelli/Michael Fehle
         Breakstone Group
         Phone: 646-452-2336
         E-mail: sborinelli@breakstone-group.com
                 mfehle@breakstone-group.com

         URL: www.vitro.com


VITRO: S&P Assigns CCC+ Rating to Servicios y Operaciones
---------------------------------------------------------
Rationale

The 'CCC+' rating on Servicios y Operaciones Financieras Vitro
S.A. de C.V.'s notes due 2007 (which are guaranteed by Vitro
S.A. de C.V.) reflects the structural subordination of the issue
relative to Vitro's priority liabilities, particularly operating
company debt. Under Standard & Poor's Ratings Services'
corporate ratings criteria, when priority debt and other
liabilities amount to 30% of the assets, lower-priority debt is
substantially disadvantaged and is therefore differentiated by
two notches.

The ratings on Vitro reflect the company's high financial
leverage, its weak free operating cash flow (FOCF) generation,
and the challenging operating environment faced by its operating
units across the board. The ratings also reflect the company's
leading position in flat glass, glass containers, and glassware
business in Mexico, and its export activities and international
operations (particularly in the U.S.), which contribute about
50% of total revenues.

Monterrey, Mexico-based Vitro, through its subsidiary companies,
is Mexico's leading glass producer. Vitro is a major participant
in three principal businesses: flat glass, glass containers, and
glassware. Vitro also produces raw materials and equipment and
capital goods for industrial use.

Vitro's high leverage is reflected in its key financial
indicators, which we determine using a convenience translation
to the U.S. dollar based on the exchange rate at the end of the
quarter. For the 12 months ended June 30, 2005, Vitro posted
EBITDA interest coverage, total debt-to-EBITDA, and funds from
operations-to-total debt ratios of 1.6x, 4.4x, and 7.6%,
respectively. Furthermore, the company's FOCF generation is
considered weak, as evidenced by a FOCF-to-sales ratio of 2% and
FOCF-to-total debt ratio of 3% posted in 2004. The operating
environment for Vitro's operations is challenging across the
board, and it reflects increased competition in the domestic
market and higher natural gas prices. In 2005, the spotlight
will be on the glass containers business, as it is expected to
drive the company's revenue and EBITDA generation. During the
second quarter, the glass containers unit posted a 21% increase
in EBITDA and a modest increase in its EBITDA margin.
Nevertheless, consolidated performance has been disappointing in
recent years and 2005 could see another decline in the issuer's
EBITDA margin. Results for the first half of 2005 reflect the
aforementioned concern, as Vitro's EBITDA margin was weaker than
that of the year-ago period by a couple of percentage points.

We view positively the recent statements made by Vitro regarding
its need to reduce consolidated debt. The group has indicated
that it will announce a plan in three to six months, following a
strategic review by its financial advisors. The group also
announced that it is in talks to sell its 51% stake in
Vitrocrisa (Crisa) to its JV partner, Libbey Inc. In our
opinion, the sale of Crisa would not have a significant impact
on Vitro's credit profile. The operation's EBITDA contribution
is about 10% of consolidated EBITDA, and its performance during
the past couple years has been weak as a result of a very
challenging operating environment. Nevertheless, funds from the
aforementioned transaction could provide the company with
liquidity to meet upcoming maturities.

Liquidity

The company's prefinancing cash-flow generation is weak (less
than $50 million is expected in 2005) and compares unfavorably
to short-term debt maturities (including trade facilities) that
totaled $395 million as of June 30, 2005. Covenant headroom is
tight and the company remains in noncompliance with certain
covenants that limit its ability to raise incremental debt. We
believe that Vitro's cash in hand and access to financing should
be sufficient to meet its 2005 maturities ($250 million). As of
June 30, 2005, the issuer held about $147 million in
unrestricted cash, which should be sufficient to meet holding
company obligations of about $70 million that are due in the
second half. We believe that Vitro should be able to continue to
roll over some senior unsecured and revolving facilities, and
secure financing at the operating company level. The successful
amortization and/or refinancing of obligations at the flat glass
business unit is an important event in regards to the
aforementioned.

Outlook

The stable outlook reflects our opinion that Vitro's liquidity
is adequate to meet its debt maturities due in 2005. The ratings
could be lowered if the company's key financial indicators fail
to improve during the year, as it is expected that excess cash
balances will be directed toward debt reduction as maturities
come due. Vitro's EBITDA interest coverage and its total debt-
to-EBITDA ratio should move toward 2.0x and 4.0x, respectively
during the year to remain in the current rating category. A
positive rating action would demand a substantial improvement in
Vitro's operating and financial performance relative to our
expectations.

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

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


VITRO: S&P Releases Credit Analysis on VENA
-------------------------------------------

Rationale

The ratings on Vitro Envases Norteamerica S.A. de C.V. (Vena)
are equalized with those of its parent company, Vitro S.A. de
C.V. (Vitro), reflecting the latter's ability and incentive to
take assets and/or burden the company with liabilities thanks to
its 100% equity interest in Vena, which contributes
approximately 50% of Vitro's consolidated EBITDA. Cross-
acceleration clauses between Vena and Vitro's Yankee bonds
provide an additional incentive to the whole economic entity to
honor Vena's debt.

Vena is the largest glass container producer in Mexico and
Central America. Through its six facilities in Mexico, the
company serves 89% of the noncaptive market, a share that is
expected to remain due to the company's strong market presence
and diversified client base. Other facilities are located in
Costa Rica, Guatemala, and Bolivia.

The ratings on Vitro reflect the company's high financial
leverage, its weak free operating cash flow (FOCF) generation,
and the challenging operating environment faced by its operating
units across the board. The ratings also reflect the company's
leading position in flat glass, glass containers, and glassware
business in Mexico and its export activities and international
operations (particularly in the U.S.), which contribute about
50% of total revenues.

Monterrey, Mexico-based Vitro, through its subsidiary companies,
is Mexico's leading glass producer. Vitro is a major participant
in three principal businesses: flat glass, glass containers, and
glassware. Vitro also produces raw materials and equipment and
capital goods for industrial use.

Vitro's high leverage is reflected in its key financial
indicators, which Standard & Poor's Ratings Services determines
using a convenience translation to the U.S. dollar based on the
exchange rate at the end of the quarter. For the 12 months ended
June 30, 2005, Vitro posted EBITDA interest coverage, total
debt-to-EBITDA, and funds from operations-to-total debt ratios
of 1.6x, 4.4x, and 7.6%, respectively. Furthermore, the
company's FOCF generation is considered weak, as evidenced by a
FOCF-to-sales ratio of 2% and FOCF-to-total debt ratio of 3%
posted in 2004. The operating environment for Vitro's operations
is challenging across the board, and it reflects increased
competition in the domestic market and higher natural gas
prices. In 2005, the spotlight will be on the glass containers
business, as it is expected to drive the company's revenue and
EBITDA generation. During the second quarter, the glass
containers unit posted a 21% increase in EBITDA and a modest
increase in its EBITDA margin. Nevertheless, consolidated
performance has been disappointing in recent years, and 2005
could see another decline in the issuer's EBITDA margin. Results
for the first half of 2005 reflect the aforementioned concern,
as Vitro's EBITDA margin was weaker relative to that of the
year-ago period by a couple of percentage points.

We view positively the recent statements made by Vitro regarding
its need to reduce consolidated debt. The group has indicated
that it will announce a plan in three to six months, following a
strategic review by its financial advisors. The group also
announced that it is in talks to sell its 51% stake in
Vitrocrisa (Crisa) to its JV partner, Libbey Inc. In our
opinion, the sale of Crisa would not have a significant impact
on Vitro's credit profile. The operation contributes about 10%
of consolidated EBITDA, and its performance during the past
couple of years has been weak as a result of a very challenging
operating environment. Nevertheless, funds from the
aforementioned transaction could provide the company with
liquidity to meet upcoming maturities.

Liquidity

The company's prefinancing cash-flow generation is weak (less
than $50 million is expected in 2005) and compares unfavorably
to short-term debt maturities (including trade facilities) that
totaled $395 million as of June 30, 2005. Covenant headroom is
tight and the company remains in noncompliance with certain
covenants that limit its ability to raise incremental debt. We
believe that Vitro's cash in hand and access to financing should
be sufficient to meet its 2005 maturities ($250 million). As of
June 30, 2005, the issuer held about $147 million in
unrestricted cash, which should be sufficient to meet holding
company obligations of about $70 million that are due in the
second half. We believe that Vitro should be able to continue to
roll over some senior unsecured and revolving facilities, and
secure financing at the operating company level. The successful
amortization and/or refinancing of obligations at the flat glass
business unit is an important event in regards to the
aforementioned.

Outlook

The stable outlook reflects our opinion that Vitro's liquidity
is adequate to meet its debt maturities due in 2005. The ratings
could be lowered if the company's key financial indicators fail
to improve during the year, as it is expected that excess cash
balances will be directed toward debt reduction as maturities
come due. Vitro's EBITDA interest coverage and its total debt-
to-EBITDA ratio should move toward 2.0x and 4.0x, respectively,
during the year to remain in the current rating category. A
positive rating action would demand a substantial improvement in
Vitro's operating and financial performance relative to our
expectations.

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

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


VITRO: Ratings Reflect Company's High Financial Leverage
--------------------------------------------------------
Rationale

The ratings on Vitro S.A. de C.V. (Vitro) reflect the company's
high financial leverage, its weak free operating cash flow
generation, and the challenging operating environment faced by
its operating units across the board. The ratings also reflect
the company's leading position in flat glass, glass containers,
and glassware business in Mexico and its export activities and
international operations (particularly in the U.S.), which
contribute about 50% of total revenues.

Monterrey, Mexico-based Vitro, through its subsidiary companies,
is Mexico's leading glass producer. Vitro is a major participant
in three principal businesses: flat glass, glass containers, and
glassware. Vitro also produces raw materials and equipment and
capital goods for industrial use.

Vitro's high leverage is reflected in its key financial
indicators, which we determine using a convenience translation
to the U.S. dollar based on the exchange rate at the end of the
quarter. For the 12 months ended June 30, 2005, Vitro posted
EBITDA interest coverage, total debt/EBITDA, and FFO/total debt
ratios of 1.6x, 4.4x, and 7.6%, respectively. Furthermore, the
company's free operating cash flow generation is considered
weak, as evidenced by a FOCF/sales ratio of 2% and FOCF/total
debt ratio of 3% posted in 2004. The operating environment for
Vitro's operations is challenging across the board, and it
reflects increased competition in the domestic market and higher
natural gas prices. In 2005, the spotlight will be on the glass
containers business, as it is expected to drive the company's
revenue and EBITDA generation. During the second quarter, the
glass containers unit posted a 21% increase in EBITDA and a
modest increase in its EBITDA margin. Nevertheless, consolidated
performance has been disappointing in recent years and 2005
could see another decline in the issuer's EBITDA margin. Results
for the first half of 2005 reflect the aforementioned concern,
as Vitro's EBITDA margin was weaker relative to that of the
year-ago period by a couple of percentage points.

We view positively the recent statements made by Vitro regarding
its need to reduce consolidated debt. The group has indicated
that it will announce a plan in three to six months, following a
strategic review by its financial advisors. The group also
announced that it is in talks to sell its 51% stake in
Vitrocrisa (Crisa) to its JV partner, Libbey Inc. In our
opinion, the sale of Crisa would not have a significant impact
on Vitro's credit profile. The operation's EBITDA contribution
is about 10% of consolidated EBTIDA, and its performance over
the past couple years has been weak as a result of a very
challenging operating environment. Nevertheless, funds from the
aforementioned transaction could provide the company with
liquidity to meet upcoming maturities.

Liquidity

The company's pre-financing cash flow generation is weak (less
than $50 million is expected in 2005) and compares unfavorably
to short-term debt maturities (including trade facilities) that
totaled $395 million as of June 30, 2005. Covenant headroom is
tight and the company remains in noncompliance with certain
covenants that limit its ability to raise incremental debt.
Standard & Poor's believes that Vitro's cash in hand and access
to financing should be sufficient to meet its 2005 maturities
($250 million.) As of June 30, 2005, the issuer held about $147
million in unrestricted cash, which should be sufficient to meet
holding company obligations of about $70 million that are due in
the second half. We believe that Vitro should be able to
continue to roll over some senior unsecured and revolving
facilities, and secure financing at the operating company level.
The successful amortization and/or refinancing of obligations at
the flat glass business unit is an important event in regards to
the aforementioned

Outlook

The stable outlook reflects Standard & Poor's opinion that
Vitro's liquidity is adequate to meet its debt maturities due in
2005. The ratings could be lowered if the company's key
financial indicators fail to improve during the year, as it is
expected that excess cash balances will be directed toward debt
reduction as maturities come due. Vitro's EBITDA interest
coverage and its total debt/EBITDA ratio should move toward 2.0x
and 4.0x during the year in order to remain in the current
rating category. A positive rating action would demand a
substantial improvement in Vitro's operating and financial
performance relative to Standard & Poor's expectations.

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

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



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

CANTV: Supreme Court Awaits Pension Appeal
------------------------------------------
Compania Anonima Nacional Telefonos de Venezuela (CANTV) is yet
to appeal a July 26 Supreme Court ruling that ordered it to
increase pension payments and other benefits to retired
employees, reports Dow Jones Newswires.

A CANTV spokeswoman said Thursday: "The revision request is
still in the hands of the lawyers."

A source at the high court said CANTV has submitted a
"clarification" request to the high court, but this will only
help explain certain parts of the ruling and not result in
"substantial" changes.

However, even if the Company appeals the decision now, the high
court will not review the appeal until after the court resumes
after summer break on Sept. 15, the source said.

The Supreme Court will also begin its own calculations on the
amount of the pension debt after the vacations, the source
added.

The pension group claims CANTV owes a total of US$326 million to
pensioners, but the Company says the cost will be much higher -
at least US$700 million.

CONTACT: Cantv Investor Relations
         Phone: +011 58 212 500-1831 (Master)
                +011 58 212 500-1828 (Fax)
         E-mail: invest@Cantv.com.ve


PDVSA: To Announce Strategic Plans, Financial Results
-----------------------------------------------------
Venezuela's state oil firm Petroleos de Venezuela (PDVSA) will
disclose its strategic plans, financial results and
international expansion strategy on August 17-19 at the Caracas
Hilton hotel, Business News Americas reports.

PDVSA will explain its strategic plans in exploration and
production, refining, gas, Orinoco oil belt development and the
international hydrocarbons trade.

In addition, the regional oil ventures Petrocaribe, Petrosur and
Petroandina will be presented.


PDVSA: Reaches $200M Fuel Sale Pact with Argentina
--------------------------------------------------
PDVSA will sell for US$200 million four million barrels (Mb) of
fuel oil to Argentina through March 2006 under a recently signed
contract, Business News Americas reports. The contract was
signed by PDVSA president and energy and oil minister Rafael
Ramirez and Argentina's federal planning minister Julio de Vido.

PDVSA will supply fuel to Argentina on a monthly basis during
the remainder of 2005 and the first quarter of 2006.

According to PDVSA, part of Argentina's bill will be paid in
goods and services required by PDVSA in line with an energy
cooperation agreement signed by the two countries in 2004.

CONTACT: Petroleos de Venezuela S.A.
         Edificio Petroleos de Venezuela
         Avenida Libertador, La Campina, Apartado 169
         Caracas, 1010-A, Venezuela
         Phone: +58-212-708-4111
         Fax: +58-212-708-4661
         Web site: http://www.pdvsa.com.ve


* VENEZUELA: S&P Raises Ratings to 'B+'; Outlook Stable
-------------------------------------------------------
Standard & Poor's Ratings Services raised its long-term foreign
and local sovereign credit ratings on the Bolivarian Republic of
Venezuela to 'B+' from 'B'. The outlook is stable.

"The upgrade reflects the continued sharp improvements in
Venezuela's external indicators," said Standard & Poor's credit
analyst Richard Francis.

"These improvements are attributable to a large current account
surplus, a high level of international reserves, and lower
external debt."

"Given the improvements in external indicators and the rapid
build up of international reserves, Venezuela now finds itself
in a relatively good position to weather adverse external
shocks," Mr. Francis noted.

"Furthermore, the public sector external debt amortization is
low over the next two years at just US$261 million in 2006 and
US$528 million in 2007, which should be easily managed."

The country's external liquidity indicators have improved
substantially over the last two years. International reserves
increased to more than US$31 billion as of Aug. 12, 2005, and
are expected to remain at more than US$25 billion over the near
term despite the transfer of nearly US$6 billion in
international reserves to a new special fund called the FONDEN,
which is to be used for public spending. This reserve increase
is the result of capital controls put in place in early 2003 and
higher foreign exchange earnings from oil exports. Furthermore,
the public sector is expected to move from a net debtor to a net
creditor position by year-end 2005.

"Failure to improve policy by implementing prudent measures will
likely continue to constrain the ratings," Mr. Francis added.
"In addition, future growth prospects will depend on foreign
direct investment, diversification of the economy, and
investment in the country's oil and gas sectors to increase
output."

The stable outlook reflects the balance between increased
financial flexibility because of high oil revenue on the one
hand and a weak fiscal position, political polarization and
diminished economic prospects that continue to constrain
Venezuela's creditworthiness on the other. The ratings could
come under renewed pressure if oil revenue plummets, capital
controls are dismantled and capital flight accelerates, or
increased social unrest leads to further economic and/or
political turmoil. Conversely, greater fiscal discipline coupled
with stronger economic policy management along with improved
prospects for the oil sector through higher levels of investment
could lead to better creditworthiness.

Primary Credit Analyst: Richard Francis, New York (1) 212-438-
7348; richard_francis@standardandpoors.com




                            ***********


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.


* * * End of Transmission * * *