TCRLA_Public/050818.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

            Thursday, August 18, 2005, Vol. 6, Issue 163

                            Headlines


A R G E N T I N A

AGUAS ARGENTINAS: Suez Seeks Closure on Government Agreeement
CONSORCIO OLIVARERO: Deadline for General Report Approaches
EDELAP: Increasing CapEx Spending by 35% Over 2004
FACHADAS INTEGRALES: Claims Review, Report Filing Expected
GASEOSA DEL ESTE: To Present Settlement Plan to Creditors

IMPSAT FIBER: Net Revenues Continue to Rise
NEBA S.A.: Trustee to Submit General Report on August 19
TENPLUS S.A.: Required Reports Set to be Filed
YPF: S&P Releases Ratings Analysis


B O L I V I A

AGUAS DEL ILLIMANI: Future Uncertain, Negotiations Continue


B R A Z I L

COPEL: Reports 13.8% Net Income Improvement in 1H05
LIGHT SERVICOS: Reverses Last Year's Second Quarter Net Loss
NII HOLDINGS: Closes $350M New Note Issue


C O L O M B I A

TELECOM: Telmex Confirms Reports on Partnership Talks


E C U A D O R

PETROECUADOR: Protests Cut Daily Production 23%


M E X I C O

ASARCO: Gets Interim OK to Employ Baker Botts as Counsel
ASARCO: Required Bankruptcy Schedules Expected October 10
GRUPO MEXICO: Operations Return Following Stoppages


U R U G U A Y

NBC: Bidders Offer $250M Each for Bank


V E N E Z U E L A

PDVSA FINANCE: S&P Raises Notes to 'BB-'
ROYAL SHELL: Plans Seniat's Tax Claim Challenge


     - - - - - - - - - -


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

AGUAS ARGENTINAS: Suez Seeks Closure on Government Agreeement
-------------------------------------------------------------
The government and French utility Suez are making progress in
their negotiations regarding the latter's operation of Buenos
Aires water utility Aguas Argentinas. According to Business News
Americas, Aguas has withdrawn its demands for compensation for
water tariffs frozen this year and has reached a compromise with
the government over the distribution of investments between the
concessionaire and the state.

The government has also not ruled out helping to restructure the
firm's US$600 million debt with the participation of public
banks.

Suez is seeking to reach an agreement with the government soon.
"There is an urgent situation, not only for Suez over the
financial situation of its Argentine subsidiary, but also
regarding the quality of services offered to customers of Aguas
Argentinas," a company spokesperson was quoted as saying.


CONSORCIO OLIVARERO: Deadline for General Report Approaches
-----------------------------------------------------------
Mr. Norberto Jorge Volpe, the trustee designated by the Buenos
Aires court for the bankruptcy of local company Consorcio
Olivarero Argentino S.A., will be submitting the general report
tomorrow, Aug. 19, 2005.

Mr. Volpe verified creditors' claims until May 10, 2005. Out of
the forwarded claims, the trustee prepared the individual
reports and submitted them in court on June 23, 2005.

The city's civil and commercial Court No. 24 handles the
Company's case.

CONTACT: Mr. Norberto Jorge Volpe, Trustee
         Maipu 859
         Buenos Aires


EDELAP: Increasing CapEx Spending by 35% Over 2004
--------------------------------------------------
Power distributor EDELAP announced a plan to invest ARS17
million in infrastructure expansion this year, 35% higher
compared to last year's spending, reports Dow Jones Newswires.

The announcement comes a month after Argentina published a new
contract for EDELAP, giving the Company an average rate hike,
retroactive from May 1, of 15% for industrial and commercial
users. The new deal continues to shield residential users from
higher prices.

EDELAP signed a letter of agreement for the new deal with
government negotiators in November, and Congress approved the
new contract three months ago after it went before a public
hearing.

EDELAP has already invested ARS8 million this year and plans to
spend the remainder by year's end, the Company said.

Among planned improvements, the Company will install 500
kilometers of new power lines, renovate a substation, and
modernize its operations control center.

EDELAP, controlled by U.S.-based AES Corp. (AES), serves
some 280,000 users in and around the city of La Plata just south
of the capital, Buenos Aires.


FACHADAS INTEGRALES: Claims Review, Report Filing Expected
----------------------------------------------------------
The general report on the Fachadas Integrales S.R.L. liquidation
case will be presented to court for approval tomorrow, Aug. 19,
2005, after the submission of the creditors' individual claims
on June 23, 2005.

Court-appointed trustee Alfredo Donatti had verified these
claims until May 10, 2005. Creditors who failed to submit proof
of claims will not qualify for any post-liquidation
distributions.

An informative assembly is set for Feb. 24 next year, during
which, the creditors will vote on the settlement plan proposed
by the Company. This is the last phase of the liquidation case.

Court No. 19 of Buenos Aires' civil and commercial tribunal
declared Fachadas Integrales S.R.L. "Quiebra" after the Company
defaulted on its debt payments.

The city's Clerk No. 38 assists the court on this case.

CONTACT: Fachadas Integrales S.R.L.
         Aguilar 2547
         Buenos Aires

         Mr. Alfredo Donatti, Trustee
         Montevideo 31
         Buenos Aires


GASEOSA DEL ESTE: To Present Settlement Plan to Creditors
---------------------------------------------------------
Trelew-based Gaseosa del Este del Chubut S.R.L. will present its
completed settlement plan in an informative assembly tomorrow,
Aug. 19, 2005. The creditors of the Company will vote to ratify
the said plan.

Court No. 2 of Trelew's civil and commercial tribunal handles
the Company's reorganization case. The city's Clerk No. 4
assists the court with the proceedings.

CONTACT: Gaseosa del Este del Chubut S.R.L.
         Santa Fe y 28 de Julio
         Trelew (Chubut)

         Mr. Carlos Alberto Maza, Trustee
         Pasaje La Rioja 287
         Trelew (Chubut)


IMPSAT FIBER: Net Revenues Continue to Rise
-------------------------------------------
IMPSAT Fiber Networks, Inc. ("Impsat" or the "Company"), a
leading provider of integrated broadband data, Internet and
voice telecommunications services in Latin America, announced
Tuesday its results for the second quarter of 2005. All figures
are in U.S. dollars.

SECOND QUARTER 2005 HIGHLIGHTS

-- Net Revenues increased for the sixth consecutive quarter. For
the second quarter of 2005, net revenues totaled $61.5 million,
an increase of $5.9 million or 10.6% compared to the second
quarter of 2004. Net revenues for the first six months of 2005
increased 9.7% from the corresponding period in 2004.

-- EBITDA totaled $11.7 million, or 19% of net revenues, for the
second quarter of 2005 and $22.3 million for the six months
ended June 30, 2005.

-- Capital Expenditures for the second quarter of 2005 totaled
$8.1 million.

-- Impsat Brazil's revenues increased by $3.5 million for the
second quarter of 2005 as compared to the second quarter of
2004, an increase of 45.5%.

SECOND QUARTER 2005 RESULTS

Commenting on the results of the second quarter, Impsat CEO
Ricardo Verdaguer stated: "We are glad to announce Impsat's
sixth consecutive quarter of revenue gains. We remain optimistic
about the growth in revenues for the rest of the year,
particularly in Brazil. The increase in revenues should help
improve our margins compared to 2004. In addition, we believe we
will benefit from our new capital structure as a result of the
modifications to our senior secured subsidiary indebtedness that
was completed at the end of July 2005."

Revenues

Net revenues during the second quarter of 2005 totaled $61.5
million, an increase of $5.9 million, or 10.6%, compared to the
second quarter of 2004. All Product lines increased revenues
year-over-year.

-- Broadband and Satellite revenues increased $2.1 million
period over period driven by DirectIP and International Access
services.

-- Value Added Services revenues increased by 48% as compared to
the second quarter of 2004. Growth was led by hosting and
telehouse services in Data Centers.

-- Internet revenues increased 10% period over period. Brazil
and Ecuador were the subsidiaries with the highest growth.

-- Telephony revenues achieved a 27% growth compared to the
second quarter of 2005 led by increases in wholesale and calling
card services.

For the six months ended June 30, 2005, Net Revenues totaled
$121.3 million, an increase of $10.7 million or 9.7% as compared
to the same period in 2004.

The Company's growth in revenues over the prior quarters is a
combination of several factors including: (a) increased customer
base, which expanded from 2,993 customers at the end of the
second quarter of 2004 to 3,912 on June 30, 2005; (b) cross-
selling to existing and new customers; (c) service bundling of
existing and new services; and (d) stable or improved
macroeconomic conditions throughout the Latin American region.

Operating Expenses

Operating Expenses for the three months ended June 30, 2005
totaled $64.1 million, an increase of $9.0 million, or 16.3%,
compared to the second quarter of 2004. This increase is
principally related to a $4.8 million increase in direct costs
and higher depreciation and amortization charges of $3.8
million.

Direct Costs for the second quarter of 2005 totaled $31.6
million, an increase of $4.8 million (or 17.7%) compared to the
second quarter of 2004. The components of direct costs were as
follows:

Contracted Services increased $1.0 million compared to the
second quarter of 2004. Contracted services include installation
and maintenance services. The increase is related to the
expansion of Impsat's proprietary network and customer base.

Other Direct Costs principally include provision for doubtful
accounts, licenses and other fees, sales commissions paid to the
salaried work force and to third-party sales representatives,
and node expenses. Other direct costs for the second quarter of
2005 increased by $0.7 million compared to the second quarter of
2004. The increase is driven by higher node expenses due to the
expansion of the Company's network; an increase in energy costs
particularly in Brazil, Colombia and Argentina; and an increase
in taxes and rates expenses related to adjustments from previous
periods.

Leased Capacity Costs increased by $3.0 million during the
second quarter of 2005 as compared to the second quarter of
2004. The increase is a consequence of higher interconnection
and telephony termination costs, related to increased telephony
services; and higher terrestrial and international capacity
costs related to increased broadband and Internet services.

Fixed Expenses, which are composed of salaries and wages, and
selling, general and administrative expenses, increased $0.4
million during the second quarter of 2005 as compared to the
second quarter of 2004. During the first half of the 2005, fixed
expenses totaled $36.4 million or 30% of net revenues, compared
to $35.4 million, or 32% of net revenues during the first half
of 2004.

Salaries and Wages for the second quarter and the first half of
2005 totaled $12.3 million and $25.2 million respectively. The
appreciation of local currencies in Argentina, Brazil, and
Colombia against the U.S. dollar since the first half of 2004
negatively affected the salaries and wages expense. The
aggregate number of employees decreased from 1,259 on June 30,
2004 to 1,253 on June 30, 2005.

Selling, General and Administrative expenses totaled $5.9
million for the second quarter of 2005, a decrease of 1.4%
compared to the second quarter of 2004 ($6.0 million). This
decrease is related to lower consulting fees and lower travel
expenses.

EBITDA

EBITDA for the three months ended June 30, 2005 totaled $11.7
million, compared to $11.0 million in the second quarter of
2004. The increase in EBITDA is directly related to higher
revenues. EBITDA represented 19% of Net Revenues during the
second quarter of 2005.

For the first half of 2005 EBITDA totaled $22.3 million,
compared to $24.3 million during the first half of 2004. The
decrease in EBITDA is related to a non-recurring net reversal of
provisions for doubtful accounts ($2.1 million) and the effect
of positive inflation adjustments on telephony revenues and
costs ($0.7 million) during the first half of 2004.

Interest Expense and Indebtedness

Net interest expense for the three months ended June 30, 2005
totaled $8.9 million, compared to net interest expense of $5.0
million for the second quarter of 2004. Commencing in the second
quarter of 2005, Impsat is required to pay cash interest on its
senior notes and certain other indebtedness of the Company's
subsidiaries. The increase in our net interest expense is due in
part to the increase in the rate of interest on subsidiary
indebtedness totaling $132.4 million in outstanding principal
amount as of June 30, 2005, and to increased withholding taxes
on such subsidiary indebtedness commencing March 26, 2005. The
effective interest rate on such indebtedness increased from 6%
per annum (based on the US GAAP treatment of contractual
accretion of the principal amount of such indebtedness between
the effective date of our restructuring in 2003 and March 25,
2005), to 10% per annum. As described in further detail below
under "Liquidity and Capital Resources," we entered into
agreements on July 29, 2005 amending $125.6 million in
outstanding principal amount of such indebtedness to extend the
scheduled amortization dates of such indebtedness and in
connection therewith we have agreed to pay interest on the
outstanding amounts at 12% per annum.

Total indebtedness as of June 30, 2005 was $265.0 million.
Compared to December 31, 2004, Impsat decreased net outstanding
indebtedness by $16.1 million as a consequence of a payment of
$16.5 million corresponding to the first installment of the
senior secured subsidiary indebtedness issued in connection with
the Company's restructuring in 2003.

Effect of Foreign Exchange Losses and Gains

Impsat recorded a net gain on foreign exchange for the second
quarter of 2005 of $11.9 million, principally due to the impact
of an appreciation of the Brazilian Real on the book value of
monetary assets and liabilities in Brazil. This compares to a
net loss on foreign exchange of $5.5 million for the same period
of 2004.

Net Loss

For the three months ended June 30, 2005 the Company recorded a
net loss of $7.0 million, compared to a net loss of $10.0
million during the second quarter of 2004.

Liquidity and Capital Resources

Cash and cash equivalents as of June 30, 2005 were $41.8
million. This compares to cash and cash equivalents of $41.4
million as of March 31, 2005 and $63.6 million at the end of the
second quarter of 2004. Total indebtedness as of March 31, 2005
and June 30, 2005 was $265.0 million.

Of the total indebtedness as of June 30, 2005, $44.5 million
represented the short-term debt and current portion of long-term
debt, while $220.5 million represented long-term debt. In
addition to the Company's requirements for debt service
payments, Impsat believes that it will need approximately $16
million to cover capital expenditures budgeted for the rest of
2005. The Company does not have any significant amounts of new
financing committed by any of its vendors or banks at this time.
As a result of the amendments in July 2005 to certain of our
indebtedness described in greater detail in the following
paragraph, the Company's total short-term debt and current
portion of long-term debt as of June 30, 2005, have been reduced
to $18.6 million.

As previously announced, on July 29, 2005, the Company entered
into a series of amendments relating to $125.6 million of our
vendor indebtedness which was held by affiliates of certain
members of our board of directors. Prior to the amendments, the
indebtedness was required to be paid in eight remaining semi-
annual principal installments aggregating $15.7 million each
between September 2005 and March 2009. Pursuant to the
amendments, the Company made an initial principal repayment of
$18.3 million and modified the terms of the agreements such that
the remaining outstanding principal amounts ($38.9 million owed
by Impsat Argentina and $68.4 million owed by Impsat Brazil)
will be repaid in the aggregate amounts of $5 million in 2006,
$20 million in 2007, $25 million in 2008 and $57.3 million in
March 2009. The amended indebtedness will bear interest at a
rate of 12% per annum, payable semi-annually in arrears, as
compared to 10% per annum for the period prior to the
effectiveness of the amendments. The parties also agreed to
amendments to the financial covenants in the agreements to
reflect current financial and operating conditions. The amended
indebtedness will be subject to optional prepayment by Impsat at
a cost of 101% until July 29, 2006 and at par thereafter, and in
addition may be refinanced at par until September 27, 2005 if
the Company is able to obtain financing at better terms. Impsat
and the lenders of the amended indebtedness each have an option
to further amend the agreements governing such indebtedness to
provide that the Company shall be the primary borrower, and
Impsat Argentina and Impsat Brazil the respective guarantors of
the portions of the indebtedness currently owed by them, subject
to certain terms and conditions. The terms and conditions of the
amendments were negotiated by a special committee of the
Company's board of directors that was formed to explore
recapitalization alternatives.

Non-GAAP Financial Measures

The Company presents EBITDA as a supplemental measure of
performance because it believes that EBITDA provides a more
complete understanding of our operating performance before the
impact of investing and financing transactions. EBITDA and
EBITDA margins are among the more significant factors in
management's evaluation of Company-wide performance. EBITDA can
be computed by adding depreciation and amortization to operating
income (loss), excluding gains on extinguishment of debt. The
reconciliation of EBITDA to Operating Income (Loss) is presented
in Appendix I Supplemental Financial Information in this Press
Release. EBITDA (earnings before interest, taxes, depreciation,
amortization, and non-recurring items) should not be considered
as an alternative to any measure of operating results as
promulgated under accounting principles generally accepted in
the United States such as operating income or net income, nor
should it be considered as an indicator of our overall financial
performance. EBITDA does not fully consider the impact of
investing or financing transactions as it specifically excludes
depreciation and interest charges, which should also be
considered in the overall evaluation of results. Moreover, our
method for calculating EBITDA may differ from the method
utilized by other companies and therefore comparability may be
limited.

IMPSAT Fiber Networks, Inc. is a leading provider of private
telecommunications network and Internet services in Latin
America. We offer integrated data, voice, data center and
Internet solutions, with an emphasis on broadband transmission,
including IP/ATM switching, DWDM, and non-zero dispersion fiber
optics. We provide telecommunications, data center and Internet
services through our networks, which consist of owned fiber
optic and wireless links, teleports, earth stations and leased
satellite links. We own and operate 15 metropolitan area
networks in some of the largest cities in Latin America,
including Buenos Aires, Bogota, Caracas, Quito, Guayaquil, Rio
de Janeiro and Sao Paulo. The Company has also deployed fourteen
facilities to provide hosting services. Impsat currently
provides services to more than 3,500 national and multinational
companies, financial institutions, governmental agencies,
carriers, ISPs and other service providers throughout the
region. We have operations in Argentina, Colombia, Brazil,
Venezuela, Ecuador, Chile, Peru and the United States and also
provide our services in other countries in Latin America. Visit
us at www.impsat.com

To see financial statements: http://bankrupt.com/misc/Impsat.txt

CONTACT: IMPSAT Fiber Networks, Inc.
         Hector Alonso / Facundo Castro
         Tel: 54-11-5170-6000
         URL: www.impsat.com

         The Global Consulting Group
         Kevin Kirkeby / Lauren Puffer
         Tel: 646-284-9400


NEBA S.A.: Trustee to Submit General Report on August 19
--------------------------------------------------------
Court-appointed trustee Adriana del Carmen Gallo will submit
tomorrow, Aug. 19, 2005, the general report on the Neba S.A.
bankruptcy. The report will contain a summary of the Company's
financial status as well as relevant events pertaining to the
bankruptcy.

Buenos Aires-based Neba S.A. began liquidating its assets
after Court No. 24 of the city's civil and commercial tribunal
declared the Company bankrupt.

The ruling placed the Company under the supervision of the
court-appointed trustee who verified the creditors' proofs of
claims until May 24. The validated claims were presented in
court as individual reports on July 5, 2005.

The bankruptcy process will end with the disposal of the
Company's assets.

CONTACT: Ms. Adriana del Carmen Gallo, Trustee
         Roque Saenz Pena 651
         Buenos Aires


TENPLUS S.A.: Required Reports Set to be Filed
----------------------------------------------
The individual reports of the Tenplus S.A. (formerly Crear
Sistemas S.A.) bankruptcy case will be submitted tomorrow, Aug.
19, 2005. These reports are based on the claims forwarded by the
creditors to the court-appointed trustee. The verification of
the claims ended on June 23, 2005. The presentation of the
general report will follow on September 30, 2005. Tenplus was
declared bankrupt by Buenos Aires' civil and commercial Court
No. 5 after it defaulted on its debt payments. Clerk No. 9
assists the court on this case.

CONTACT: Mr. Carlos Guido Martino, Trustee
         Presidente Roque Saenz Pena 651
         Buenos Aires


YPF: S&P Releases Ratings Analysis
----------------------------------
Rationale

The ratings on YPF S.A. (YPF) reflect its strategic importance
to its parent, Repsol (BBB+/Stable/A-2); Repsol's economic
incentive to strongly support its Argentine operation; a
conservative financial profile (despite significant dividend
payments in the past four years); and YPF's strong business
position. The ratings also reflect the challenges of operating
in the highly uncertain and rapidly changing Argentine economic
environment, vulnerability to highly volatile international
prices, a geographically concentrated reserve base, and low
reserve replacement ratios.

The strong performance of YPF's operations coupled with the
existence of cross-default clauses (although decreasing) in some
of Repsol's bonds are significant incentives for Repsol's
support. This is because, as YPF has been reducing its leverage
to a more conservative level and exhibiting a very smooth
maturity profile, any eventual required assistance should not be
significant compared with the value of the company. The cross-
default clauses specify that Repsol would default on its bonds
if any principal subsidiary, including YPF, defaulted on more
than $20 million of debt obligations. Standard & Poor's Ratings
Services considers the economic incentives for Repsol to support
its Argentine subsidiary to be very strong, except in the case
of total nationalization.

Standard & Poor's considers the regulatory and institutional
environment in Argentina to be a major risk for YPF's business
position. Nevertheless, Standard & Poor's considers that the
strong financial profile, the previously mentioned economic
incentives from its parent, a very competitive cost structure,
sound management, and a very important reserve base that the
company has been bringing into production despite the
challenging conditions of the past few years compensate those
weaknesses at the current rating category.

The hydrocarbon sector in Argentina is conditioned by political
decisions that might affect the sustainability of the industry's
profitability in the medium to long term. In 2004, the Kirchner
Administration:

   - Modified many regulations jeopardizing the credit quality
     of the companies;
   - Curtailed natural gas exports to Chile;
   - Proposed the creation of a new state-owned energy
     company (Enarsa) that will operate in the hydrocarbon
     industry and increases uncertainties about the
     government's willingness to interfere in the sector;
   - Pressured producers to invest in infrastructure projects
     (mostly pipelines); and
   - Pressured producers and refiners not to increase the
     price of retail refined products.

With consolidated sales of Argentina peso (ArP) 30 billion
(approximately $10 billion) as of Dec. 31, 2004, YPF is
Argentina's largest company and Latin America's fourth-largest
integrated energy company. As of December 2004, YPF had 2,322
million barrels of oil equivalent (boe) proven consolidated
reserves, almost all of which are concentrated in Argentina
(47.7% oil, 78% developed reserves).

YPF's revenue base, profitability, and cash-flow generation
ability are volatile, influenced by the strong weight of the
exploration and production division, which has contributed
between 74% and 99% of operating income in the past four years.
Despite government intervention that prevented YPF from fully
benefiting from international crude oil prices, funds from
operations (FFO) covered 290% of total debt in 2004, while
EBITDA interest coverage reached a very strong 49.5x for the
same period. The company continued to show very strong financial
performance during the first six months of 2005, when EBITDA
interest coverage reached 30.3x. Future performance will be
conditioned by the effect of international events on prices and
by the evolution of devaluation and inflation and new economic
measures in Argentina. Despite the volatile environment in
Argentina, YPF's financial performance, profitability measures,
and cash-flow generation ability should remain strong due to its
good operating performance and conservative financial profile in
spite of an aggressive dividend policy in the past four years.

YPF has a conservative capital structure, with total debt
representing 7.1% of total capitalization as of June 2005.

Liquidity

Standard & Poor's considers YPF's liquidity position to be
strong due to its important cash holdings and healthy cash-flow
generation. As of June 2005, YPF's cash reserves amounted to
$181 million, with total debt at $560 million, including $115
million in the short term. Intercompany credits granted to the
Repsol YPF group (approximately $365 million as of June 2005)
constitute an additional liquidity source.

Given that no acquisition is expected and considering the
company's strong cash-flow generation ability, Standard & Poor's
expects YPF's capital expenditure needs to be covered by
internally generated funds and free operating cash flows to
remain positive in the medium term. YPF showed an aggressive
dividend policy in the past four years, resulting in an average
payout ratio close to 100%. However, this cash outflow has not
affected YPF's credit quality, although these dividend payments
might become politically sensitive in the future. Standard &
Poor's expects YPF's dividend policy to reflect the Repsol
Group's cash management policy but not to increase the company's
cash needs or jeopardize its ability to fund capital expenditure
requirements.

Standard & Poor's expects YPF's liquidity situation to remain
strong. However, should foreign-exchange transfer controls be
reinstated (as in the December 2001-May 2003 period), debt
payment capacity could be pressured.

Outlook

The stable outlook on the foreign currency ratings reflects
Standard & Poor's expectations that Repsol has sufficient
economic incentives to support YPF, thereby mitigating direct
sovereign risk (particularly an increase in current transfer and
convertibility restrictions). The positive outlook on the local
currency ratings reflects Standard & Poor's expectations that
YPF will continue strengthening its solid business position and
maintaining sound cash-flow protection measures despite some
additional intervention of the Argentine government (for
example, in the form of new or additional taxes).

Primary Credit Analyst: Pablo Lutereau, Buenos Aires (54) 114-
891-2125; pablo_lutereau@standardandpoors.com

Secondary Credit Analyst: Emmanuel Dubois-Pelerin, Paris (33) 1-
4420-6673; emmanuel_dubois-pelerin@standardandpoors.com



=============
B O L I V I A
=============

AGUAS DEL ILLIMANI: Future Uncertain, Negotiations Continue
-----------------------------------------------------------
The fate of La Paz water concessionaire Aguas del Illimani
(AISA) remains uncertain as the Bolivian government and AISA's
French parent, energy group Suez, have yet to complete their
negotiations regarding the Company's contract. Business News
Americas says negotiations were expected to wrap up August 15,
as announced by the public works and services ministry
previously. However, a solution over the terms of an audit of
AISA's books has proved to be elusive.

Regulator Sisab, which is responsible for supervising the
operation of the concession, wants the audit to cover the whole
period of the concession because it is important to establish
the source of funds used in infrastructure investment to ensure
they did not come from water charges revenues.

But AISA has been resisting the probe claiming that the period
1997-2001 has already been covered by a previous audit.

The government has been in direct negotiations with AISA for
several months now after prolonged street protests by local
residents.

Local residents' organization Fejuve in La Paz satellite El Alto
launched earlier this year a series of protests against what it
called high charges and poor service, forcing the government to
rescind AISA's contract.

Fejuve has threatened to re-launch street protests if AISA is
allowed to continue managing the service, which it won in
concession in 1997.

But the government is still left with the problem of how to
replace the concessionaire after it became clear that the state
or local authorities do not have the funds to carry out the
capital investments needed to expand services.



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

COPEL: Reports 13.8% Net Income Improvement in 1H05
---------------------------------------------------
Companhia Paranaense de Energia - COPEL (NYSE: ELP / LATIBEX:
XCOP / BOVESPA: CPLE3, CPLE5, CPLE6), company that generates,
transmits, and distributes electric power to the State of
Parana, announced Monday its operating results for the first
half of 2005.

Highlights

- Net Operating Revenue: R$2,356.3 million - a 30.5% increase
compared to the first half of 2004.

- Operating Income: R$321.7 million - 10.4% higher than the
amount recorded in the same period of 2004.

- Net Income: R$196.7 million (R$ 0.72 per thousand shares).
13.8% higher than the amount recorded during the first half 2004
(R$172.8 million).

- Increase in total electric power consumption at COPEL's
concession area during the first half of 2005: 3.9%.
       
- EBITDA (earnings before interest, taxes, depreciation and
amortization): R$488.1 million.

- Return on Equity: 7.7% per year.

- Debt / Shareholders' Equity: 32.6%.

From June 1, 2005, COPEL has no longer been recording provisions
for payments under the gas supply contract between Petrobras and
Compagas, due to its termination.

COPEL's consolidated balance sheet presents, in addition to the
wholly owned subsidiaries figures (COPEL Geracao, COPEL
Transmissao, COPEL Distribuicao, COPEL Telecomunicacoes and
COPEL Participacoes) Compagas' figures. In order to maintain the
comparison base, first half 2004 financial statements were
reclassified.

First Half of 2005 Main Events

- Net Income: In the first half of 2005, COPEL recorded net
income of R$196.7 million, corresponding to R$0.72 per 1,000
shares.

- Gas supply contract: As of June 1, 2005, COPEL has no longer
been recording provisions for payments under the gas supply
contract between Compagas and Petrobras, which has been
terminated.

- Tariff Readjustment: Under ANEEL Resolution no. 130, COPEL
Distribuicao electric power tariffs were readjusted by 7.80% on
average, as from June 24, 2005. Out of this total, -1.25%
corresponds to the annual tariff readjustment (IRT), and 9.05%
to financial components outside the range of the annual tariff
readjustment. As of August 1, 2005, the average discount granted
to consumers who pay their electricity bills when due was set at
6.8% off the tariff under ANEEL Resolution 130/2005, thus
resulting in an average increase of 4.4%.

- Market expansion: Total power consumption throughout COPEL's
concession area - which includes sales both to captive consumers
and to free consumers in the State of Parana - grew by 3.9% from
January through June 2005 compared to the same period in 2004.

The residential, commercial, and rural segments grew by 4.4%,
8.0%, and 6.3%, respectively. The expansion in the residential
segment was due to a 3.0% increase in the number of consumers
supplied and to an increase in average consumption (1.3% over
the first half of 2004). The good performance of the commercial
segment resulted from the modernization of the sector and the
opening of new businesses. The growth in the rural segment was
due mainly to the increase in exports of agricultural,
livestock, and agro-industrial products, which resulted in
higher income for the producers, enabling them to invest in
electric machinery. Total industrial consumption within COPEL's
concession area increased by 1.6% (taking into account the free
consumers supplied by COPEL Geracao in Parana).

- Audit Committee: In order to comply with the requirements set
forth by the Sarbanes-Oxley Act, in June 2005 COPEL's Bylaws was
amended to establish an Audit Committee composed of three
members, who are elected for two-year terms and with reelection
possibility. According to the Internal Rules and Regulations of
the Audit Committee, members are elected and may be removed by
the Board of Directors. All of members of the Audit Committee
are also members of the Board of Directors.

The Audit Committee is responsible for the Financial Statements
and for ensuring compliance with all legal requirements
regarding disclosure/reporting obligations. Its duties include
monitoring the work of the independent auditors and of the
Company's internal audit staff and reviewing the effectiveness
of internal controls and risk management procedures.

- Start of operation of the Santa Clara Power Plant: On July 31,
2005, the Santa Clara Power Plant was authorized by the National
Electric Energy Agency (ANEEL) to start the commercial operation
of the first of its two 60-megawatt generating units.

- Elejor Debentures (BNDESPAR): Centrais Eletricas do Rio
Jordao-ELEJOR, company in which COPEL holds 70% of common
shares, issued R$255.6 million in debentures. The first issuance
took place in May 2005, in the amount of R$175.2 million, of
which R$123.7 million were used to amortize a mutual loan
contracted by ELEJOR from COPEL.

- UEG Araucaria: In early 2005, a committee was assembled with
representatives from COPEL, Petrobras, and El Paso in order to
negotiate a settlement regarding the issues related to UEG
Araucaria. In July 2005, COPEL hired an external consulting
company to appraise its stake in UEG Araucaria.

- Electricity Auction: COPEL participated in the 2nd auction of
existing electricity, which took place on April 2, 2005. At this
event, COPEL Geracao sold 80 MW/year for the period between
2008-2015 at R$82.32/MWh, while COPEL Distribuicao bought 53.7
MW/year for the period between 2008-2015 at R$83.13/MWh.

- Debentures: On April 25, 2005, CVM (Brazilian Securities and
Exchange Commission) approved the filing of COPEL's 3rd Issuance
of Debentures, comprising a R$ 1 billion Debenture Program. On
the same date CVM also authorized the first issue under the
scope of this Program in the amount of R$ 400 million. Out of
this total, R$360 million corresponded to public distribution
under the firm commitment scheme by Banco do Brasil, Bradesco,
HSBC, Itau BBA, Santander, and Unibanco, and R$ 40 million to
distribution under the best efforts scheme. This issue matures
in four years and was rated A+ by Fitch and A1 by Moody's. The
totality of the resources from this series was used to pay off
the Eurobonds issued by the Company in 1997 in the amount of
US$150 million.

Financial and Operating Performance

Market Expansion

In the first half of 2005, total power consumption at COPEL's
concession area (supply market plus free consumers in the State
of Parana) reached 9,197 GWh, up by 3.9% versus the volume
recorded in the same period of 2004. This consumption growth
reflects, mainly, the increase in the commercial, rural and
residential segments, with variations of 8.0%, 6.3% and 4.4%
respectively. Taking into consideration free consumers outside
the State of Parana, total consumption was 9,399 GWh.

Residential consumption recorded a recovery, reaching the growth
levels presented before the 2001 rationing, which can be
verified through the consumption per residential consumer ratio
that, in 1H05 returned to its growth trend (1.3% higher than the
volume recorded in the same period of 2004). This increase in
the segment is due to the acquisition of electric equipment, as
a result of the consumer credit increase since 2004. The number
of residential consumer increased 3.0% in the first half,
reaching the highest number in the last three years.

The commercial segment growth in the first six months of the
year maintained 1H04 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.

The good performance of the rural segment is mainly due to the
increase in exports of agricultural and agribusiness products,
that resulted in higher income for rural producers and,
consequently, in purchase of additional electric products.
Industrial segment consumption, including only Copel
Distribuicao market, dropped 5.2% due to the transfer, in April
2005, of some free consumers to Copel Geracao. However, the
total industrial consumption at Copel's concession area recorded
a 1.6% growth, when including free consumers served by Copel
Geracao in the State of Parana.

The lower consumption of free consumers outside the State of
Parana is due to the termination of contracts of COPEL
Distribuicao with Carbocloro and Volkswagen by the end of 2004.
In June 2005, COPEL's total number of consumers amounted to
3,222,813, up by 2.8% compared to June 2004, corresponding to
88,472 new consumers.

Consumption per Segment

Copel Distribuicao's grid market (TUSD), composed by Copel's
captive market and the totality of free consumers in the
company's concession area, increased by 4.3% in the first half
of 2005 (9,968 GWh).

Revenues

Net operating revenues in the first half of 2005 reached R$
2,356.3 million up by 30.5% the R$1,805.8 million recorded in
the first half of 2004. This increase mainly reflects: (i) the
lower discount granted to consumers who pay their electricity
bill when due, resulting in a 9% average adjustment as from June
24, 2004 and in a 5% average adjustment as from February 1,
2005; (ii) higher supply revenue reflecting the energy sold from
COPEL Geracao due to the first old energy auction (980 MW in
average for the period between 2005-2012 at R$57.50/MWh); and
(iii) the increase in revenue from the availability of the grid
due to transmission tariff readjustment confirmed by ANEEL
Resolution 71/2004, in addition to the incorporation of new
transmission assets at the basic grid and to the tariff for the
use of transmission grid - TUSD revaluation, after COPEL's
tariff revision.

The "Piped Gas Distribution" relates to revenues from Compagas'
gas distribution.

Operating Expenses

In the first half of 2005, total-operating expenses reached
R$2,029.8 million, versus the R$1,467.7 million recorded in the
same period of 2004. The main variations were: The 61.2%
increase in the "energy purchased for resale" line, because of
the amount of energy hired by Copel Distribuicao in the 1st old
energy auction (992 MW in average for the period between 2005-
2012 at R$57.51/MWh). The main amounts booked are: R$255.7
million from ITAIPU, R$156.3 million from CIEN, R$38.9 million
from Itiquira and R$220.7 million from energy auction. R$52.4
million was booked as passive CVA - energy purchased for resale.

       
The increase in the "Use of transmission grid" line is due to:

1) Tariff readjustment confirmed by ANEEL Resolution 71, of June
30, 2004, and

i) The amortization of R$38.6 million from CVA recovery.

Other important factor was the lower deferral from CVA occurred
in 1H05 (R$1.2 million) while in 1H04 it was R$78.1 million.
The 24.7% increase in the "personnel" line was chiefly due to
wage raises in July 2004 (1.26% - remaining amount from the 2003
collective labor agreement) and in October 2004 (6.5%), to the
increase in the number of employees (270 new employees) and to
the additional risk agreement (R$22.2 million) in March and May
2005. Disregarding this last expense, which is non-recurring,
personnel expenses would have increased by 13.8%.

As a result of the consolidation of Compagas, the "raw material
and supply for electric power production" line reflects only the
amount regarding the purchase of natural gas and other supply
payable to third parties. This rise is due to a larger use of
coal in the Figueira power plant in April/2005.

The "natural gas and purchased for resale and supplies for the
gas business" line refers to the total natural gas acquired by
Compagas from Petrobras. The provisioned amount regarding the
purchase of natural gas from Compagas by COPEL in the first half
2005, was R$117.5 million, totaling R$664.9 million. As from
June 1, 2005, COPEL has no longer been recording provisions for
payments under the gas supply contract with Compagas, which has
been due to their termination.

    The 48.7% increase in "regulatory charges", under which were
booked R$114.6 million as Fuel Consumption Account - CCC (a
49.4% increase), R$27.9 million as financial compensation for
the utilization of water resources (a 2.5% increase), R$70.1
million as Energy Development Account - CDE (a 79.9% variation)
and R$5.5 million as ANEEL's electric power services oversight
fee and other services (a 43.9% growth).

The increase in "other operating expenses" mainly due to the
booking of provision for doubtful accounts. This provision was
calculated in accordance with the ANEEL's Electric Power Public
Providers Booking Manual and, this first six months of the year,
amounted to R$43.3 million.

EBITDA

Earnings before interest, taxes, depreciation and amortization -
EBITDA reached R$488.1 million in the first half of 2005, 0.7%
below the number recorded in the same period of the previous
year (R$491.6 million).

Financial Result

The financial income by the first half of 2005 recorded a 1.5%
increase in comparison to the same period of 2004. The main
variations were: (i) higher interest from financial position due
to a higher cash position in the period; (ii) increase of
interest and fees due to the appropriation of interest from the
mutual contract with Elejor; (iii) monetary variation drop due
to the decrease in IGP-DI, index used for readjusting CRC
transferred to the State government; and (iv) increase in the
interest on arrears over electricity bills.

Financial expenses went down by 15.8% as a result, mainly, of
the "Real" appreciation relative to U.S. dollar in the period
(12.9%).

Operating Result

COPEL's operating result recorded in the first half of 2005
totaled R$321.7 million, 10.4% above the first half of the
previous year.

Non-Operating Result

The non-operating result recorded in the period reflects mainly
the net effect of the write-offs of assets and rights registered
under permanent assets.

Net Income

Between January and June 2005, COPEL recorded net income of
R$196.7 million, 13.8% above the same period of the previous
year (R$172.8 million). In the second quarter of 2005, the
Company's net income was R$118.3 million, 50.8% higher than the
first quarter of 2005 (R$78.4 million).

Balance Sheet and Capex (Assets)

On June 30, 2005, COPEL's total assets amounted to R$10,080.8
million.

COPEL's capex in the first half of 2005 was R$203.9 million, of
which R$9.9 million were allocated to power generation projects,
R$61.1 million to transmission projects, R$119.2 million to
distribution improvement works, R$8.8 million to
telecommunications and R$ 4.9 million to gas plumbing
(Compagas).

Balance Sheet (Liabilities)

As of June 30, 2005, COPEL's total debt amounted to R$1,740.2
million, representing a debt/shareholders' equity ratio of
32.6%.

On April 25, 2005, CVM authorized the registration for the
Company's 3rd debenture issuance. At this date, it was also
authorized registration for the first issuance, in the amount of
R$400 million. These resources were used for the settlement of
the Eurobond issued in 1997, in the amount of US$150 million.
COPEL's shareholders' equity was R$5,333.0 million, representing
a 6.0% increase over June 2004, and equivalent to R$19.49 per
thousand shares.

CONTACT: Companhia Paranaense de Energia - COPEL
         Investor Relations
         E-mail: ri@copel.com

         Ricardo Portugal Alves
         Phone: (55 41) 3331-4311

         Solange Maueler Gomide
         Phone: (55 41) 3331-4359

         URL: www.copel.com


LIGHT SERVICOS: Reverses Last Year's Second Quarter Net Loss
------------------------------------------------------------
Electric power utility Light Servicos de Eletricidade SA managed
to overturn a BRL16.9-million net loss in the second quarter of
2004 into a BRL10.1-million net profit in the second quarter of
2005. The Company's 2Q05 bottom line was helped by an increase
in net revenue, prompted mainly by an increase in sales volumes
of energy.

Net Revenue in the second quarter of 2005 was BRL1.168 billion,
12.6% higher from BRL1.037 billion in the same year-ago quarter.

Meanwhile, EBITDA during the recent quarter was BRL64.2 million,
down 75.9% from BRL266.1 million in the comparable period of
2004.

Light, which serves the country's second biggest city of Rio de
Janeiro, said it invested BRL140.1 million in the first half of
2005. It did not offer a quarterly breakdown of investments.

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

Brazil's National Development Bank (BNDES) recently fulfilled a
commitment to Light by purchasing BRL727 million (US$308
million) worth of 10-year debentures issued by the power
distributor. The purchase came after light completed a US$1.5-
billion debt restructuring.

The BNDES loan will help Light pay down BRL320 million in debts
with federal power holding company Eletrobras and bolster its
cash flow. In three years, BNDES will decide whether to convert
the debentures into Light voting shares.

CONTACT:  LIGHT SERVICOS DE ELETRICIDADE S.A.
          Avenida Marechal Floriano, 168
          20080-002 Rio de Janeiro, Brazil
          Phone: +55-21-2211-2794
          Fax:   +55-21-2211-2993
          Home Page: http://www.lightrio.com.br
          Contact:
          Bo Gosta Kallstrand, Chairman
          Michel Gaillard, President and CEO
          Joel Nicolas, Executive Director, Operation
          Paulo Roberto Ribeiro Pinto, Executive Director,
                                 Investor Relations and CFO


NII HOLDINGS: Closes $350M New Note Issue
-----------------------------------------
NII Holdings, Inc. (the "Company") closed Monday the sale of the
$350.0 million aggregate principal amount of the Notes. The
Notes and the shares of the Company's common stock issuable in
certain circumstances upon conversion of the Notes have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"). The Company offered and sold the Notes to the
Initial Purchaser in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act.

The Company relied in part on representations made by the
Initial Purchaser in the Purchase Agreement that the Initial
Purchaser then sold the Notes to qualified institutional buyers
pursuant to the exemption from registration provided by Rule
144A under the Securities Act.

The Notes are governed by an Indenture, dated August 15, 2005,
between the Company and Wilmington Trust Company, as Trustee.

The Notes will be convertible into shares of the Company's
common stock based on an initial conversion rate, subject to
adjustment, of 9.9835 shares per $1,000 principal amount of the
Notes (which represents an initial conversion price of
approximately $100.17 per share), only under the following
circumstances: (1) during any fiscal quarter after the fiscal
quarter ending September 30, 2005, if the closing sale price of
the Company's common stock exceeds 120% of the conversion price
for at least 20 trading days in the 30 consecutive trading days
ending on the last trading day of the preceding fiscal quarter;
(2) prior to July 15, 2010, during the 5 business day period
after any 5 consecutive trading day period in which the average
trading price per Note for each day of that period was less than
98% of the product of the closing sale price of the Company's
common stock and the number of the shares issuable upon
conversion of $1,000 principal amount of Notes, subject to
limitations described in the Indenture; (3) at any time on or
after July 15, 2010; or (4) upon the occurrence of specified
corporate events. Upon conversion, the Company will have the
right to deliver, in lieu of common stock, cash or a combination
of cash and common stock.

The Notes will bear interest at a rate of 2.75% per annum on the
principal amount of the Notes, payable semi-annually in arrears
on February 15 and August 15 of each year, beginning on February
15, 2006.

Upon the occurrence of certain "fundamental changes," as
described in the Indenture, the Company will have the option to
adjust the conversion rate so that the consideration otherwise
payable on conversion of the Notes in shares of the Company's
common stock will be payable instead in shares of the surviving
or acquiring company. If the Company does not exercise this
option upon a fundamental change, or if it does not apply, the
holders of the Notes will have the option, in certain cases, to
require the Company to repurchase any Notes held at a price
equal to 100% of the principal amount of the Notes plus accrued
interest to the date of repurchase or, in certain cases, to
convert the Notes at an increased conversion rate based on the
price paid per share of the Company's common stock in the
fundamental change transaction.

On or after August 20, 2010, the Company has the option to
redeem all or a portion of the Notes that have not been
previously converted at the redemption price equal to 100% of
the principal amount of the Notes to be redeemed plus accrued
and unpaid interest to the date of redemption. Holders of the
Notes have the option to require the Company to repurchase any
Notes held by them for cash on August 15, 2010, August 15, 2012,
August 15, 2015 or August 15, 2020 at a price equal to 100% of
the principal amount of the Notes plus accrued interest to the
date of repurchase.

The Notes will rank equal in right of payment with all of the
Company's existing and future senior unsecured debt and prior to
all of the Company's existing and future subordinated debt. The
Notes will effectively rank junior in right of payment to the
Company's secured debt to the extent of the value of the assets
securing such debt. The Notes will be effectively subordinated
to all indebtedness and all liabilities of the Company's
subsidiaries.

The events of default under the Indenture that may result in the
outstanding Notes becoming immediately due and payable:

- The Company fails to pay principal or premium, if any, when
due upon redemption, repurchase or otherwise on the Notes;

- The Company fails to pay any interest and additional amounts,
if any, on the Notes when due and such failure continues for a
period of 30 days;

- The Company fails to perform or observe any of the covenants
in the Indenture for 60 days after notice; and

- There occurs an event of default with respect to the Company
and certain of the Company's subsidiaries' or affiliates
indebtedness having a principal amount then outstanding,
individually or in the aggregate, of at least $10.0 million,
whether such indebtedness now exists or is hereafter incurred,
which default or defaults:

- shall have resulted in such indebtedness becoming or being
declared due and payable prior to the date on which it would
otherwise have become due and payable; or

- shall constitute the failure to pay such indebtedness at the
final stated maturity thereof (after expiration of any
applicable grace period) and such default shall not have been
rescinded or such indebtedness shall not have been discharged
within 10 days; or

- certain events involving the Company's bankruptcy, insolvency
or reorganization.

In connection with the sale of the Notes, the Company entered
into a Registration Rights Agreement, dated August 15, 2005,
with the Initial Purchaser. Under the Registration Rights
Agreement, the Company has agreed to file within 90 days of the
date on which the Notes are first issued a shelf registration
statement for resales of the Notes and the shares of the
Company's common stock issuable upon conversion of the Notes.
The Company is further obligated to use its best efforts to have
the shelf registration statement become effective under the
Securities Act within 180 days after the date on which the Notes
are first issued. If the Company fails to comply with certain of
its obligations under the Registration Rights Agreement, it will
be required to pay additional interest to holders of the Notes
under specified circumstances.

The Initial Purchaser and its affiliates have, from time to
time, performed, and may in the future perform, various
financial advisory and investment banking services for the
Company, for which they received or will receive customary fees
and expenses.

The Notes and the underlying common stock issuable upon
conversion of the Notes have not been registered under the
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements. This report on Form 8-
K does not constitute an offer to sell, or a solicitation of an
offer to buy, any security and shall not constitute an offer,
solicitation or sale in any jurisdiction in which such offering
would be unlawful.

On August 10, 2005, the Company entered into a Purchase
Agreement under which it agreed to sell $300.0 million aggregate
principal amount of its 2.75% Convertible Notes due 2025 (the
"Notes") to Goldman, Sachs & Co. (the "Initial Purchaser"). The
Company also granted the Initial Purchaser an option to purchase
up to $50.0 million aggregate principal amount of additional
Notes (the "Option"), which the Initial Purchaser exercised in
full. The net proceeds from the offering, including the full
exercise of the Option, after deducting the Initial Purchaser's
discount of 2.5% and the estimated offering expenses payable by
the Company, are expected to be approximately $341.3 million.

CONTACT: NII Holdings, Inc.
         Investor Relations
         Tim Perrott
         Phone: 1-703-390-5113
         E-mail: tim.perrott@nii.com
                  or
         Media Relations
         Claudia E. Restrepo
         Phone: 1-786-251-7020
         E-mail: claudia.restrepo@nii.com

         URL: http://www.nii.com



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

TELECOM: Telmex Confirms Reports on Partnership Talks
-----------------------------------------------------
Telmex spokesperson Arturo Ayub has confirmed reports that the
Mexican telecoms giant is in talks with Colombian state-run
operator Colombia Telecomunicaciones (Telecom) over a possible
partnership.

According to Business News Americas, the companies are looking
at three possible methods under which Telmex could enter a
partnership with Telecom: the acquisition of part of Telecom's
property, controlling operations or an intermediate method.

Telecom is also considering a partnership with Bogota's fixed
line operator ETB and Medellin's municipal telco EPM.

ETB had previously proposed a partnership with Telecom for its
mobile operation Colombia Movil (Ola). Under the terms of this
proposal, Telecom would have acted as a capital partner, using
Ola's infrastructure or reselling mobile services.

But according to Telecom president, Alfonso Gomez, his company
is only looking for a commercial alliance to add mobile services
to its portfolio.

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



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

PETROECUADOR: Protests Cut Daily Production 23%
-----------------------------------------------
State-run oil company Petroecuador saw a 23% reduction in its
daily output after protests in two Amazon provinces halted a
major pipeline operation run by the Company.

Petroecuador's daily output is usually around 201,000 barrels a
day. "Now our output is under 155,000 barrels. We lost around
46,000 barrels and we can forecast that the situation will be
worse in the next hours" a top executive from Petroecuador told
Dow Jones Newswires on Tuesday.

The executive also forecast that recovering the normal output
could take between one or two months, after the strike finishes.

Townspeople in eastern Ecuador on Monday blocked access to
several oil wells operated by Petroecuador calling for more
infrastructure development in the region.

Elio Ortega, of the Orellana provincial advisory council,
revealed that a group of demonstrators had occupied the
installations around an oil well where last week a crude spill
affected the area.



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

ASARCO: Gets Interim OK to Employ Baker Botts as Counsel
--------------------------------------------------------
Baker Botts L.L.P. is the oldest law firm in Texas and it has
assisted ASARCO LLC, from time to time, in a variety of discrete
matters for a number of years.  In 2004, ASARCO engaged Baker
Botts to assist it in resolving the company's and its
subsidiaries' asbestos-related exposure.  More recently, Baker
Botts assisted the company in connection with its decision to
seek reorganization under Chapter 11 of the Bankruptcy Code and
the preparation of the voluntary petition and other pleadings
initiating its bankruptcy case.

ASARCO asks the U.S. Bankruptcy Court for the Southern District
of Texas for permission to employ Baker Botts as its bankruptcy
counsel under a general retainer.

According to Karen C. Paul, Senior Associate General Counsel at
ASARCO, the company's financial affairs are complex and its
business operations are of a nature that frequently requires
highly specialized legal advice.  Baker Botts possesses such
expertise and, as a result of the previous representation, has
developed considerable familiarity with the Debtor's business
and finances.

As legal counsel, Baker Botts will:

   (a) explore restructuring alternatives and develop a
       reorganization strategy;

   (b) develop, negotiate, and promulgate a Chapter 11 plan of
       reorganization;

   (c) advise the Debtor with respect to its rights and
       obligations as debtor-in-possession;

   (d) protect and preserve the Debtor's estate, including the
       prosecution of actions on the Debtor's behalf, the
       defense of any actions commenced against the Debtor,
       negotiations concerning all litigation in which the
       Debtor is involved, and the filing and prosecution of
       objections to claims filed against the Debtor's estate;

   (e) prepare all necessary applications, motions, answers,
       orders, briefs, reports and other papers in connection
       with the administration of the Debtor's estate;

   (f) represent the Debtor at all hearings and proceedings;

   (g) perform all other necessary legal services in connection
       with the Chapter 11 case; and

   (h) continue rendering general, non-bankruptcy legal
       services as the Debtor may request, including
       environmental, corporate, real estate, litigation, tax,
       labor relations, and employee benefits matters.

In accordance with Section 330(a) of the Bankruptcy Code,
compensation will be payable to Baker Botts on an hourly basis,
plus reimbursement of actual, necessary expenses and other
charges incurred.  Baker Botts will employ attorneys and legal
assistants with varying degrees of legal experience, as each
matter may require.

The firm's current standard hourly rates are:

             Professional                  Hourly Rates
             ------------                  ------------
             Partners and Counsel           $350 - $675
             Associates                     $190 - $340
             Legal Assistants               $100 - $170
             Legal Assistant Clerks          $50 - $100

Jack L. Kinzie, a partner at Baker Botts, assures the Court that
the firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b).

                         Court's Ruling

The Court approves ASARCO's application to employ Baker Botts on
an interim basis.  The order will be final if no party files an
objection by Sept. 11, 2005.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining,  
smelting 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. 2;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ASARCO: Required Bankruptcy Schedules Expected October 10
---------------------------------------------------------
Pursuant to Rule 1007(b) and(c) of the Federal Rules of
Bankruptcy Procedure, a Chapter 11 debtor must file its schedule
of assets and liabilities, a schedule of current income and
expenditure, a schedule of executory contracts and unexpired
leases, and a statement of financial affairs within 15 days
after the Petition Date so long as it files a list of its
creditors with the bankruptcy petition.

Karen C. Paul, Senior Assistant General Counsel of ASARCO LLC,
tells the U.S. Bankruptcy Court for the Southern District of
Texas that, due to its large number of creditors, the Debtor
requires additional time to compile and verify the accuracy of
the data needed for the preparation and filing of the Schedules
and Statements.

Under the circumstances, ASARCO anticipates that it will be
unable to complete its Schedules and Statements within 15 days.
The Debtor believes that it needs 60 days to accomplish this
project.

Hence, the Debtor asks the Court to extend the deadline for
filing the Schedules and Statements until Oct. 10, 2005.

Additionally, the Debtor seeks an extension of the deadline to
file a consolidated list of creditors as required by Rule
1007(a)(1).

In lieu of filing a creditor matrix with its petition, the
Debtor had planned to file a complete list of creditors.

However, as a result of the union strike and because of the
large number of its creditors, the Debtor was not able to
provide a complete list of creditors with the Chapter 11
petition.

The Debtor has filed with its petition a list of creditors
holding the 20 largest unsecured claims as well as a partial
list of all creditors.  The Debtor will supplement the list as
new information becomes available and it is able to update the
list.

The Debtor anticipates filing a complete consolidated list by
Aug. 24, 2005.

                         Court's Ruling

Judge Schmidt grants the Debtor's request.  The meeting of
creditors will not be scheduled to occur until shortly after the
Schedules and Statements are filed. (ASARCO Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)


GRUPO MEXICO: Operations Return Following Stoppages
---------------------------------------------------
Copper producer Grupo Mexico worked at normal output at its
mines Tuesday after the previous day's staggered work stoppages,
Dow Jones Newswires reports, citing a union official.

"All the operations are working normally today [Tuesday]. The
staggered work stoppages were only held in one-hour shifts on
Monday and whether more will be launched depends entirely on
whether progress in talks is made," an official at the Mexican
Mining and Metallurgical Workers Union said.

An estimated 250,000 union members participated in Monday's
staggered work stoppages at all the 130 mining and steel
chapters across Mexico in a solidarity move with the Sicartsa
steel plant workers, who have been on strike since Aug. 1 over a
series of labor disputes, and U.S. copper miners at Asarco Inc.
(ASX.XX), who have been on strike since early July.

The union has said that unless workers' complaints at Sicartsa
and Asarco, a unit of Grupo Mexico, are taken into consideration
by the companies, staggered stoppages will be extended to longer
intervals and eventually lead to a full 24-hour nationwide
mining strike.

Grupo Mexico is the world's third-largest copper producer with
operations in Mexico, the U.S. and Peru, where the giant Mexican
mining company holds a majority share in the Southern Peru
copper group.

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



=============
U R U G U A Y
=============

NBC: Bidders Offer $250M Each for Bank
--------------------------------------
The two firms vying for state-owned Uruguayan bank Nuevo Banco
Comercial (NBC) have offered some US$250 million each for the
bank, Business News Americas reports, citing a source close to
the negotiations.

The offers from Chilean financial services group Corp Group and
investment fund Advent International come close to the bank's
book value, the source said.

The Uruguayan government is seeking to privatize NBC by the end
of the year but local press reports have suggested that NBC
would be privatized before the end of the month.

Chilean businessman Alvaro Saieh controls Corp Group, which runs
Corpbanca (NYSE: BCA) in Chile and Venezuela. Advent is a US
private investment fund that manages some US$6 billion in
assets.

NBC was created in March 2003 from the assets of local
banks Banco Comercial, Banco Montevideo and Banco Caja Obrera.
The three banks were intervened and suspended as a result of a
run on deposits during the country's financial crisis in 2002.



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

PDVSA FINANCE: S&P Raises Notes to 'BB-'
----------------------------------------
Standard & Poor's Ratings Services raised Tuesday its rating on
PDVSA Finance Ltd.'s outstanding senior unsecured notes to 'BB-'
from 'B+'.

The rating on the approximately $88.9 million outstanding senior
unsecured notes reflects Petroleos de Venezuela's (PDVSA)
operational strengths and the importance of oil revenues to the
Venezuelan economy that likely will allow production to continue
even in the event of a sovereign and/or PDVSA default. The notes
are backed by current and future receivables generated from the
sale of crude oil from PDVSA Petroleo, a subsidiary of PDVSA, to
designated customers.

The rating action follows the recent elevation of the local and
foreign currency ratings of the Bolivarian Republic of Venezuela
to 'B+' from 'B' and the subsequent upgrade of the corporate
credit rating of PDVSA to 'B+' from 'B'. The outlook on the
ratings of both Venezuela and PDVSA is stable. The ratings on
PDVSA and Venezuela are equalized because of their ties of
ownership and economic interests.

The 'BB-' rating on PDVSA Finance's notes reflects a number of
aspects of the transaction that mitigate the risk of sovereign
interference, including:

   -- The current credit enhancement in the form of very
      strong debt service coverage levels (export revenues
      over debt service) of more than 261x, and a three-month
      reserve account; and

   -- The structural mechanism in place that requires export
      revenues related to receivables purchased by PDVSA
      Finance to be captured in an offshore collection account.

While the structural enhancements for state-owned cross-border
future flow transactions do mitigate sovereign risk because they
make interference more cumbersome compared with unstructured
transactions, Standard & Poor's believes that they will provide
only limited support under a severe stress scenario that could
unfold if political and economic conditions in Venezuela
deteriorate.

PRIMARY CREDIT ANALYST:

   Cesar Fernandez, New York
   Tel: (1) 212-438-2681
   E-mail: cesar_fernandez@standardandpoors.com

   Jose Coballasi, Mexico City
   Tel:  (52)55-5081-4414
   E-mail: jose_coballasi@standardandpoors.com


ROYAL SHELL: Plans Seniat's Tax Claim Challenge
-----------------------------------------------
Venezuela's tax authority Seniat said it has been notified of
Royal Shell's plan to challenge a US$131-million tax claim,
relates Business News Americas.

"They told us that they will introduce a writ and start a
process to contest this that could take up to a year. They said
they have paid all their taxes," the official said.

"The president of Shell Venezuela [Sean Rooney] met with Seniat
director Jose Vielma and said they will use their administrative
resources to contest this," the official added.

Seniat recently asked a court for an injunction on Royal Shell's
assets worth VEB280 billion (US$130 million) to guarantee
payment of US$131 million in unpaid taxes from the Company. The
tax agency sought for the injunction in a tax court in the oil-
producing western state of Zulia.

The agency has said Shell will lose out if the tax case goes to
court, and have to pay additional fines for fighting the claim.




                            ***********


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
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Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
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Copyright 2005.  All rights reserved.  ISSN 1529-2746.

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