TCRLA_Public/050822.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Monday, August 22, 2005, Vol. 6, Issue 165

                            Headlines


A R G E N T I N A

AGUAS PROVINCIALES: Suez-Emgasud Deal Falls Through
ASOCIACION CIVIL: Individual Reports Slated for Filing
BANCO BISEL: Local S&P Maintains Bonds' `raD' Ratings
BANCO SUQUIA: S&P Leaves `raD' Bond Ratings Unchanged
INTERALGARROBOS S.A.: Finalizes Reorganization

KEY ENERGY: Moody's Confirms $425M Sr. Unsec. Notes `B1' Rating
MAVACO S.A.: Trustee to Submit General Report
MERCOVENTA S.A.: General Report Due in Court August 23


B E R M U D A

INTELSAT: Adds IPoS and DW7000 to Approved Satellite List


B R A Z I L

EMBRATEL: Launches "Sim 21" Campaign to Entice Customers
SABESP: Ratings Reflect High Debt Maturities, Refinancing Need
TCP: To Ratify Board of Directors' Election on Sep. 28
TELEMAR: Gets Better Terms on $540M Facility
TELEMAR: More Info on Distribution, Trading of Contax Shares

TELEMAR: Banco do Brasil Changes Stake to Remain Compliant


C O L O M B I A

GRANAHORRAR: IFC May Provide Financial Aid to Potential Buyers
PAZ DEL RIO: Latinvesco to Advise IFI on Stake Sale
WEST CARIBBEAN: Flights Suspended After August 16 Crash


E C U A D O R

PETROECUADOR: Suspends Crude Oil Production Amid Protests


E L   S A L V A D O R

BANCO AGRICOLA: S&P Affirms 'BB/B' Ratings; Outlook Stable
BANCO SALVADORENO: S&P Affirms 'BB/B' Ratings; Outlook Stable


M E X I C O

CINTRA: Sets Mid-November Target Date for Airlines' Sale
CNI CANAL: TV Azteca Files Suit Alleging Fraud in GE Deal


P A N A M A

CABLE & WIRELESS: Moody's Sees Progress Favorable, Ups Outlook


V E N E Z U E L A

EDC: Seeks to Expand Genevapca's Generation Projects
PDVSA: Minister Confirms No Gasoline Price Increase
* VENEZUELA: Rating Reflects Solid External Liquidity


     - - - - - - - - - -


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

AGUAS PROVINCIALES: Suez-Emgasud Deal Falls Through
---------------------------------------------------
French firm Suez will not be selling its stake in water utility
Aguas Provinciales de Santa Fe to gas distributor Emgasud. Suez
and Emgasud have been negotiating the transfer of a 77.5% stake
in Aguas Provinciales. But negotiations were undermined by the
government's decision to exercise a ARS68-million (US$23.5mn)
contract guarantee.

The government's decision "makes impossible the projected sale
of the company's shares," Aguas Provinciales said in a
statement, adding Suez's concession will now be terminated.

"The transfer of Aguas Provinciales de Santa Fe SA's service to
the province should take place no later than Nov. 25, 2005," the
statement concluded.

Meanwhile, Santa Fe's Minister of Works, Public Services and
Housing, Alberto Hammerly, said Thursday the water company
failed to submit required documentation relating to its request
to withdraw from the concession.

"In no way does the provincial government accept the
responsibility that the company seeks to place on it," Mr.
Hammerly said, according to a statement posted on the Santa Fe
government's Web site.

However, in comments made to local daily Clarin, the province's
Minister of Water Affairs said "the province is prepared for a
situation of this kind."


ASOCIACION CIVIL: Individual Reports Slated for Filing
------------------------------------------------------
Mr. Alejandro Eduardo Pintor, the court-appointed trustee for
the Asociacion Civil Villafane, will submit on Sept. 12, 2005
the individual reports on the claims of the Company's creditors,
reports Infobae. These claims underwent verification which
lasted until July 29, 2005. Mr. Pintor will also prepare the
general report on the Company's bankruptcy and submit it on Oct.
25, 2005. A general assembly is set for Feb. 20 next year.

Court No. 1 of San Juan's civil and commercial tribunal declared
Asociacion Civil Villafane bankrupt after the Company failed to
pay its creditors.

CONTACT: Mr. Alejandro Eduardo Pintor, Trustee
         San Luis 630
         Oeste (San Juan)


BANCO BISEL: Local S&P Maintains Bonds' `raD' Ratings
-----------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains its `raD' rating on two Short Term Debt Securities
(NSC Reg. No. 344) issued by Banco Bisel S.A. under Program, the
Comision Nacional de Valores (CNV) reports.

The debt securities are:

- US$54 million worth of "Obligaciones Negociables Subordinadas"
issued under Series and/or Class that matured on July 20, 2000;
and

- US$300 million worth of "Programa de Emisi>n de Titulos de
Deuda a Mediano Plazo" issued under Program that also matured on
July 20, 2000.

The rating action was taken based on Banco Bisel's financial
health as of June 30, 2005.

According to S&P, an obligation is rated `raD' when it is in
payment default, or the obligor has filed for bankruptcy. The
rating is used when interest or principal payment are not made
on the date due even if the applicable grace period has not
expired, unless the ratings agency believes that such payments
will be made during such grace period.


BANCO SUQUIA: S&P Leaves `raD' Bond Ratings Unchanged
-----------------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains a default rating on US$36 million worth of corporate
bonds issued by Banco Suquia S.A., says Argentine securities
regulator, the CNV.

The action, based on the bank's financial status as of June 30,
2005, affected the following bond issues:

- US$23 million worth of "Obligaciones Negociables subordinadas,
autorizadas por AGO de fecha 19.12.97" due on November 7, 2005;
and

- US$13 million worth of "Obligaciones Negociables Subordinadas
convertibles, autorizadas por AGE de fecha 19.9.97" due on May
23,2005.


INTERALGARROBOS S.A.: Finalizes Reorganization
----------------------------------------------
The reorganization of Interalgarrobos S.A. has been concluded.
Data revealed by Infobae on its Web site indicated that the
process was concluded after the Civil and Commercial Court No. 1
of San Juan's civil and commercial tribunal made official the
debt agreement signed between the Company and its creditors.

CONTACT: Interalgarrobos S.A.
         Balaguer 87
         Sur, Santa Lucia (San Juan)


KEY ENERGY: Moody's Confirms $425M Sr. Unsec. Notes `B1' Rating
---------------------------------------------------------------
Moody's Investors Service confirmed Key Energy Services' B1
Corporate Family Rating (formerly the senior implied rating),
the B1 rating on the $275 million of 8.375% senior unsecured
notes, and the B1 rating on the $150 million of 6.375% senior
unsecured notes.  The outlook is changed to developing.  The
ratings confirmation reflects the significantly reduced
refinancing risk to the bondholders following the company recent
announcement that it closed on its new Senior Credit Facilities
arranged by Lehman Brothers with an aggregate availability of
$547.3 million.  The new facilities will allow the company to
refinance all of its existing debt obligations as well as meet
ongoing liquidity needs.

The developing outlook also reflects the ongoing restatement
process that began in March 2004, and in Moody's view could take
at least a few more months to complete.  Though the process is
very far along, there are still important steps that remain to
be completed including final approval from the auditors and
subsequently the SEC.

The ratings confirmation is supported by strong fundamentals
across Key's markets.  Continued upcycle conditions have led to
increased pricing power and the supportive commodity price
outlook provides visibility for continued strength in Key's
markets into 2006.  In particular, the exceptional growth in the
North American pumping services market is far out pacing
capacity and is leading to more rapid price escalation for
regional players like Key.  The confirmation also reflects the
stabilization of the capital structure from the new financing
and removes the redemption uncertainty for bondholders and gives
the company the flexibility to provide audited financial
statements by March 2007.

The ratings could be pressured if the company is unable to
complete the restatement process and file its delayed 2003 and
2004 financial statements by the end of 2005, or if a material
unexpected development occurs during the remainder of the
process. To move the outlook to stable the company must be up to
date on all of its filings and demonstrate that the process is
behind them and the underlying fundamentals of the business
haven't deteriorated.

The Senior Credit Facilities include:

  * a seven-year Delayed Draw $400 million Term Loan B Facility;

  * a five-year $82.25 million Synthetic Letter of Credit
    Facility; and

  * a five-year $65 million Revolving Credit Facility (including
    a $25 million sub-limit for additional letters of credit).

The company now has the ability call the $275 million of 8.375%
notes (callable at 104%) which it could and may do at anytime.
Though the $150 million 6.375% notes are not in the call period,
it is possible that if the 8.375% notes are called by Key, the
6.375% note holders may accelerate their notes given they are
still in default and that funding under the new credit facility
would put these notes in a subordinate position and if left
outstanding, would likely result in a notching down from the
Corporate Family Rating.

Key Energy Services, Inc. is headquartered in Houston, Texas.
(Troubled Company Reporter - Friday, August 19, 2005, Vol. 9,
No. 196)


MAVACO S.A.: Trustee to Submit General Report
---------------------------------------------
Court-appointed trustee Jacobo Beker will submit the general
report on the Mavaco S.A. liquidation to court tomorrow, Aug.
23, 2005.

Mr. Beker reviewed claims forwarded by the Company's creditors
through May 12, 2005. These claims were presented in court as
individual reports on June 27, 2005.

Mavaco S.A. began liquidating its assets after Court No. 23
of Buenos Aires' civil and commercial tribunal declared the
company bankrupt. Clerk No. 46 assists the court on this case.

CONTACT: Mr. Jacobo Beker, Trustee
         Jeronimo Salguero 2244
         Buenos Aires


MERCOVENTA S.A.: General Report Due in Court August 23
------------------------------------------------------
The deadline for the submission of the general report on the
Mercoventa S.A. bankruptcy case is tomorrow, Aug. 23, 2005. The
individual reports on the claims of the Company's creditors were
submitted on June 27, 2005. These claims underwent verification
by the court-appointed trustee. The verification phase ended on
May 12, 2005.

Mercoventa S.A. of Buenos Aires was declared "Quiebra" by the
city's civil and commercial Court No. 24. Clerk No. 48 assists
the court on this case.

CONTACT: Mr. Raul Alberto Rodriguez, Trustee
         Avda Cordoba 652
         Buenos Aires



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

INTELSAT: Adds IPoS and DW7000 to Approved Satellite List
---------------------------------------------------------
- Successful lab testing paves the way for global distribution
through Intelsat customers.

Intelsat, Ltd. announced Thursday that it had successfully
completed laboratory testing and analysis of Hughes Network
Systems' (HNS) DW7000 satellite broadband platform, clearing the
way for the system and the Internet Protocol over Satellite
(IPoS) standard to be added to the portfolio of broadband
technologies Intelsat markets through its worldwide customer
base.

Ramu Potarazu, Intelsat's COO, said "Intelsat is constantly
searching for technologies that provide high value to our
customers and their end users. When HNS introduced us to their
new DW7000 platform, we were immediately intrigued by its
balance of high performance and favorable economics. Rigorous
testing in the Intelsat labs confirmed what we suspected when we
first encountered the product-the DW7000 and the IPoS air
interface are winners."

"DIRECWAY technology has consistently led the satellite
broadband market in terms of performance, reliability and
economy," said HNS Chairman and CEO, Pradman Kaul. "We're
looking forward to extending the reach of IPoS and our DW7000
platform through Intelsat's blue-chip community of global
channels-many of whom are offering high-quality broadband
services to just the types of customers our DIRECWAY platform
targets. The IPoS standard is the only two-way satellite air
interface recognized by the ITU, TIA, ETSI, and now Intelsat."

The DW7000 family of broadband satellite routers consists of two
initial offerings: the DW7700 for high-performance enterprise
and government requirements, and the DW7000 for small business
and consumer customers. The product line is ideally suited for
organizations that require ubiquitous broadband coverage and
always-on Internet connections, and that use bandwidth-intensive
applications ranging from two-way video to large data files
attached to e-mails.

The IPoS standard is used by the DW7000 family of satellite
routers to achieve high bandwidth efficiency, low latency and
high quality of service. In addition, the DW7000 family of
satellite routers integrates a powerful processor and ample
memory, allowing the platform not only to accelerate user data,
but also to provide a full set of IP routing features. The
result is a platform able to support more than 35 simultaneous
accelerated TCP sessions, more than 45 mbps of multicast
traffic, over 10 mbps of UDP throughput and more than two mbps
of accelerated HTTP throughput.

Intelsat is a global communications provider offering flexible
and secure services to customers in over 220 countries and
territories. Intelsat has maintained a leadership position for
over 40 years by distributing video, voice, and data for
television and content providers, government and military
entities, major corporations, telecommunications carriers, and
Internet service providers. Intelsat's reach, power and
expanding solutions portfolio deliver information reliably and
quickly to every corner of the globe.

Hughes Network Systems, LLC (HNS) is the world's leading
provider of broadband satellite network solutions for businesses
and consumers, with more than 800,000 systems ordered or shipped
to customers in 85 countries. HNS pioneered the development of
high-speed satellite Internet access services and IP-based
networks, which it markets globally under the DIRECWAYr brand.
DIRECWAY terminals are based on the IPoS (IP over Satellite)
global standard, approved by TIA, ETSI, and the ITU standards
organizations.

Headquartered outside Washington, D.C., in Germantown, Maryland,
USA, HNS maintains sales and support offices worldwide. SkyTerra
Communications, Inc. (OTCBB:SKYT) and The DIRECTV Group, Inc.
(NYSE:DTV) each own 50% of HNS. SkyTerra is its managing member.

CONTACT: Intelsat
         E-mail: media.relations@intelsat.com
         Phone: 1 202-944-7500



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

EMBRATEL: Launches "Sim 21" Campaign to Entice Customers
--------------------------------------------------------
- Rates to be reduced by 50% at nighttime and on weekends

Proceeding with its advertising campaign, Embratel announced on
August 8, 205 the release of its "Sim 21" discount plan, through
which the DDD rates not only were not raised, but also offer a
50% discount at nighttime (from 6 pm on) and on weekends.

"The Sim 21 plan will make the life of our customers much more
simple, because it has only two types of rates: one for calls
within the State, the other for outbound calls", explains Jorge
Braga, Embratel's Long Distance Executive Director.

He adds that Embratel is strengthening its transparency policy
towards its customers by implementing very economic offers valid
for anywhere in Brazil, in a simple and comprehensive way.

This is a unique initiative in terms of hours as well. Embratel
starts offering discounts from 6 pm on , while its competitors
start their reduced hours from 9 pm on. The rates are very
appealing: just R$ 0,12 each minute for calling within the
State, and only R$ 0,17 to other States (excluding taxes, for
wireline-wireline calls).

During business hours the calls cost only R$ 0,24 (within the
State, excluding taxes) and R$ 0,34 (outbound calls, excluding
taxes). Additionally, the Sim 21 plan offers a special feature,
i.e. in spite of being a discount plan, its users receive one
single bill with all the calls placed through the 21 included in
the same bill of the local telco, thus adding more convenience
and simplicity.

The Sim 21 Plan is valid for all the states of Brazil and has no
installation rate, no monthly charges. All you have to do is
sign up free of charge by ringing 0800-90 21 00.

Its advertising campaign plays with the image of a dog that
"Says no" to rate raising, stressing the economy and the
advantages of calling through the Code 21.

In an unprecedented initiative, Embratel was the first carrier
to announce that it would not raise its long distance rates, in
a clear demonstration of concern with the costs of consumers
making long distance or local calls. The news was announced at
national level through the "Say No. Say Yes to Embratel"
campaign that was widely aired by TV and radio stations.

Embratel offers a range of complete telecommunications solutions
to the market all over Brazil, including local, long distance
domestic and international telephone services, data, video and
Internet transmission, and is present all over the country with
its satellite solutions. Embratel is the market leader in
revenues with Long Distance, Domestic and International calls.

CONTACT: Embratel
         Investor Relations
         Phone: (5521) 2121-6474/2121-9662
         Fax: (5521) 2121-6388/
         Email: invest@embratel.com.br
         URL: www.embratel.com.br


SABESP: Ratings Reflect High Debt Maturities, Refinancing Need
--------------------------------------------------------------
Rationale

The global scale corporate credit rating on water utility
Companhia de Saneamento B sico do Estado de Sao Paulo (SABESP;
BB-/Stable/--) reflects the significant amount of its annual
debt maturities (averaging Brazilian real (BrR) 900 million per
year), combined with the company's significant refinancing needs
and its exposure to currency mismatch (a high volume of debt
expressed in dollars not protected by hedge instruments). The
rating also reflects the lack of a defined regulatory framework
for the water and utility sector in Brazil, and the company's
challenges to reduce overdue accounts receivables of wholesale
clients and water losses.

These risks are partially offset by SABESP's strategic
importance as a regional provider of water and wastewater
service in the state of Sao Paulo. The company covers a large
and broad territory and has a natural monopoly for these
services. SABESP also has the capacity to progress in the
capital expenditure program that expanded wastewater collection
and treatment capability through the system. SABESP is a strong
cash generator and probably is the Brazilian water and
wastewater company with the most access to financial markets,
and it may raise funds through the capital markets and
development banks to deal with its debt maturities and its
investment requirements.

In the first quarter of 2005, the company's net revenues
increased about 7%, reaching BrR1.2 billion, and its EBITDA
increased 7%, to BrR559 million, comparedwith the same period in
2004. Such improvements were mainly caused by the tariff
increase (about 7%) applied on Aug. 28, 2004 and by the almost
4% increase in the water and sewerage volume billed in the
quarter. For the final result of fiscal 2005, SABESP's revenue
is expected to reach about BrR4.7 billion and EBITDA of about
BrR2.1 billion, an improvement of about 7% and 8%, respectively,
compared with 2004 The increases also reflect the higher tariff
and a favorable expectation for demand this year. In 2004,
demand was lower due to the Metropolitan Region of Sao Paulo's
efforts to reduce public consumption at a time of low reservoir
levels.

SABESP is the largest water and sewage company in the Americas
in terms of revenues and number of clients. The company is
responsible for water production and distribution and sewage
collection and treatment in 368 of the 654 municipalities in the
State of Sao Paulo, including the city of Sao Paulo. Sao Paulo
is Brazil's most populous and economically productive state, and
is SABESP's main market, representing 56% of revenues. The
company has formal concession agreements with about 90% of the
municipalities. About 45% of these agreements mature in 2005 and
2006 (17 agreements in 2005 and 128 in 2006). Standard & Poor's
Ratings Services expects most of these contracts to be renewed
because the assets that make up the existing municipal water and
sewage systems are owned by SABESP and because of the service
quality provided by those municipalities. In the worst-case
scenario, if all municipalities decide not to renew their
concessions, SABESP would see decreases in net revenues of about
4% in 2005 and 9% in 2006.

Liquidity

SABESP's main weakness is its highly leveraged financial profile
and its exposure to foreign currency fluctuations because 37% of
its total debt is U.S. dollar-denominated without hedging
instruments. By year-end 2005, the company will face significant
maturities, totaling BrR1.4 billion (19% of total debt), which
includes US$275 million in Eurobonds, BrR225 million debentures,
and BrR460 million in monthly amortizing loans. The company is
expected to have free operating cash flow of about BrR500
million in 2005; therefore, it has already issued about BrR900
million debentures to deal with its 2005 amortization schedule.

Outlook

The stable outlook on the foreign currency rating reflects that
of Brazil's sovereign foreign currency rating, and the stable
outlook on the local currency and national scale ratings reflect
Standard & Poor's expectations that SABESP will continue to
receive approval from the state government to adjust tariffs in
such a way to maintain its capacity to generate free cash flow,
continue to experience good access to capital markets, and fund
much of its capital program through programs with multilateral
banks. A change in outlook would come from a more robust
decrease in leverage (EBITDA to total debt to 38% and total debt
to EBITDA to 2.5x), which is not currently anticipated.

Primary Credit Analyst: Juliana Gallo, Sao Paulo (55) 11-5501-
8948; juliana_gallo@standardandpoors.com

Secondary Credit Analyst: Milena Zaniboni, Sao Paulo (55) 11-
5501-8945; milena_zaniboni@standardandpoors.com


TCP: To Ratify Board of Directors' Election on Sep. 28
-------------------------------------------------------
The Board of Directors of Telesp Celular Participacoes S.A. will
ratify the election of Mr. Luis Paulo Reis Cocco, Mrs. Luiz
Kaufmann, Antonio Goncalves de Oliveira and Henri Philippe
Reichstul to the Board of Directors at the Special Meeting of
Shareholders of the Company 2:00 p.m. of September 28, 2005, at
the head-office on Av. Roque Petroni Junior, 1464 - terreo
(Auditorio), Morumbi, Sao Paulo.

Mr. Cocco was elected to the Board of Directors at a meeting
held on June 18, 2005 while Mrs. Kaufmann, Mr. Goncalves de
Oliveira and Mr. Reichstul were elected at a meeting held on
July 28, 2005.

The Board of Directors will also finalize resolutions on several
other agenda items:

1) Ratifying the wording of article 5 of the Bylaws, as
suggested by the Board of Directors at a meeting held on July
29, 2005, which homologated the increase of the capital stock of
the company, resulting from capitalization of the credit of the
controlling shareholder resulting from use of the tax benefit of
goodwill in past fiscal years;

2) Amending the wording of article 9 of the Bylaws, which shall
hereinafter read as follows: "Art. 9 - The execution of
agreements with related parties the terms and conditions of
which are more burdensome to the Company than those usually
adopted on the market in agreements for the same nature, shall
be submitted to the General Meeting of Shareholders for prior
approval, with due regard, in any case, to the provisions in
article 117 of Law 6404/76"; and

3) Restating the Company's Bylaws.

General Instructions:

A) Powers of attorney for representation at the Meetings,
including of preferred shareholders, exclusively for the
purposes of item (2) above, as provided for in article 12 of the
Bylaws, shall be filed with the head-office, at Av. Roque
Petroni Junior, 1464 - terreo (Auditorio), Morumbi, in the
Capital of the State of Sao Paulo (Legal Department), on
business days, Monday to Friday, from 9:00 a.m. until 6:00 p.m.,
until not later than 2:00 p.m. of September 26, 2005;

B) Shareholders participating in the Fungible Custody of
Registered Shares of the Stock Exchanges and wishing to attend
these Meetings will be required to submit an updated statement
issued by the custodian of the shares, showing their respective
shareholding position; and

C) Documents and proposals shall be available to the
shareholders at the address mentioned in "A" above.

CONTACT: Telesp Celular Participacoes S.A.
         VIVO - Investor Relations
         Phone: 55 11 5105-1172
         Email: ri@vivo.com.br
         URL: www.vivo.com.br/ri


TELEMAR: Gets Better Terms on $540M Facility
--------------------------------------------
Telemar Norte Leste, operating company of Tele Norte Leste
Participacoes S.A. (NYSE:TNE), completed a repricing of its
existing US$ 540 million facility, outstanding since August
2001. This facility has been used to fund investments and
working capital requirements of its mobile operations since its
inception.

The Company renegotiated the interest rates of this credit
facility, reducing the spread over LIBOR, from the previous
range of 2.25% to 4.5%, to a new range of 0.5% to 1.625%. The
decrease in spread represents cost savings with estimated net
present value of US$ 24 million. The renegotiated facility was
arranged by ABN AMRO Bank N.V. and Citigroup Global Markets,
Inc.

The transaction success may be mainly attributed to the
improvement of Telemar's credit profile, the high liquidity of
the global capital markets, and the use of the book building
process, where international banks announce the amount and
spreads they are willing to accept to join the transaction.
Demand by international banks represented almost three times the
actual amount subject to repricing.

CONTACT:  TNE - INVESTOR RELATIONS
          Email: invest@telemar.com.br
          Roberto Terziani - 55 (21) 3131-1208
          Carlos Lacerda - 55 (21) 3131-1314
          Fax: 55 (21) 3131-1155

          GLOBAL CONSULTING GROUP
          Kevin Kirkeby (kkirkeby@hfgcg.com)
          Tel: 1-646-284-9416 Fax: 1-646-284-9494


TELEMAR: More Info on Distribution, Trading of Contax Shares
------------------------------------------------------------
Tele Norte Leste Participacoes S.A. (TNE - Telemar) and Contax
Participacoes S.A. (Contax) released Thursday in Brazil
additional information regarding the distribution and initial
trading of the shares of TNE's former subsidiary, Contax, which
was spun-off (the "Spin-off") to TNE's shareholders pursuant to
a shareholders' resolution approved at a meeting of the
shareholders held on December 29, 2004. The released information
also set forth the record date and ex-date for TNE's shares and
ADRs in connection with the spin-off.

TNE and Contax announced that the required authorizations from
the securities and exchange commissions of Brazil and the United
States (the CVM and SEC, respectively) were obtained to allow
the consummation of the spin-off and the distribution of the
Contax shares and ADRs resulting from this transaction. Contax's
shares will be traded on the BOVESPA in Brazil and its ADRs will
be traded over the counter in the United States via an ADR
Program for its preferred shares sponsored by The Bank of New
York, the depositary bank.

The Contax shares will be transferred to the holders of the
TNE's shares, based on an August 26, 2005 record date, at the
ratio of one Contax common share for each TNE common share and
one Contax preferred share for each TNE preferred share.
Accordingly, the TNE shares will start trading "ex Contax
shares" on the Bovespa as of August 29, 2005.

Holders of record of TNE ADRs on August 31, 2005 will be
entitled to receive ADRs of Contax at the ratio of one Contax
ADR for each TNE ADR. The Contax ADRs will be available for
trading over the counter in United States starting on August 31,
2005 and will be transferred to the holders of TNE's ADRs on
September 6, 2005.

Contax intends to announce shortly the payment date for the
dividends related to the 2004 fiscal year, which were approved
by a shareholders' resolution at a meeting of the shareholders
held on April 29, 2005. The amount approved is equal to R$
0.00533 per share to be exclusively allocated to the Contax
preferred shares and ADRs.

CONTACT: The Bank of New York
         Jason L. Paltrowitz
         Vice President
         E-mail: J.Paltrowitz@bankofny.com
         URL: http://www.adrbny.com
         Phone: 1 212 815 2077

         London
         Joseph Oakenfold
         Assistant Treasurer
         E-mail: Joakenfold@bankofny.com
         Phone: 44 207 964 6419

         TNE - Tele Norte Leste
         Investor Relations
    Roberto Terziani
         Phone: 55 21 3131 1208
         E-mail: invest@telemar.com.br
                    Or
         Carlos Lacerda
         Phone: 55 21 3131 1314
         E-mail: carlosl@telemar.com.br
    Fax: 55 21 3131 1155

         Contax
         Investor Relations
         Michel Sarkis
         Phone: 5521 31310009
         E-mail: ri@contax.com.br

         The Global Consulting Group
         Kevin Kirkeby
         E-mail: kkirkeby@hfgcg.com
         Phone: 1-646-284-9416
         Fax: 1-646-284-9494
         E-mail: www.telemar.com.br/ri


TELEMAR: Banco do Brasil Changes Stake to Remain Compliant
----------------------------------------------------------
Banco do Brasil, a government-owned bank, will give up some of
its shares in fixed-line phone giant Telemar (TNE) in order to
adhere to government telecommunications regulations, suggested
financial daily Valor Economico. Under Brazilian
Telecommunications Authority (Anatel) rules, individuals and
institutions cannot hold controlling stakes in rival phone
companies.

Banco do Brasil violates this rule as it also holds stock in one
of Telemar's main competitors, Brasil Telecom. The bank holds
the shares through its subsidiaries, BrasilCap and
Brasilveiculos.

Banco do Brasil has not yet confirmed these reports but a source
from the bank involved with the telephone stock issue said: "The
supposed exit by the Banco do Brasil from Telemar would involve
only shares held as part of Telemar's controlling block of
shares. The bank could sell those shares but still hold Telemar
stock as an ordinary shareholder."

The source further noted: "A decision (on selling a stake in the
controlling block) could only be taken at a meeting of the
Telemar board of directors."

If, indeed, Banco do Brasil decides to sell its stake in the
controlling block of Telemar shares, it will also relinquish its
right to name members to the Telemar board of directors or to
veto major investment and other plans by the phone operator.



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

GRANAHORRAR: IFC May Provide Financial Aid to Potential Buyers
--------------------------------------------------------------
The International Finance Corp. (IFC), the private-financing arm
of the World Bank, is willing to lend an unspecified amount of
money to any commercial bank interested in acquiring Banco
Granahorrar, Dow Jones Newswires reports, citing IFC Manager
Serge Deviex.

Colombia plans to privatize state-run mortgage lender
Granahorrar. It set a minimum price of COP429.76 billion
($1=COP2,305.80) for the company.

Spanish Banco Bilbao Vizcaya Argentaria SA (BBV), Banco
Santander Central Hispano SA (STD) and Colombian financial group
Sociedades Bolivar (SOCBOLIVA.BO), which owns Banco Davivienda,
have expressed interest in purchasing the mortgage bank.

Deposit insurance fund Fogafin saved Granahorrar from bankruptcy
in the late 1990s, injecting some COP439 billion worth of
capital into the bank, and purchasing COP452 billion worth of
loans from the bank.

Fogafin director Juan Ortega expects the sale of Granahorrar to
bring in as much as COP438 billion pesos (US$189mn). The entity
has some COP130 billion in equity.


PAZ DEL RIO: Latinvesco to Advise IFI on Stake Sale
---------------------------------------------------
Industrial development agency IFI has tapped bank Latinvesco
Banca de Inversion to advise it on the divestment of its 6.9%
stake in iron and steel company Acerias Paz del Rio (APR),
reports Business News Americas.

IFI legal advisor Sandra Castro said the agency and the bank are
about to sign a contract that covers all the accounting,
commercial, financial and legal due diligence at Paz del Rio.

As IFI's advisor, Latinvesco will evaluate IFI's stake in APR so
the agency can move forward with the sale. IFI must sell off APR
to help reduce its debts.

Latinvesco will also be advising the government in the sale of
its 2.2% in the steelmaker. APR is headquartered in Belencito in
the central department of Boyaca. The Company has a 14% domestic
steel market share.

CONTACT: Acerias Paz Del Rio S.A.
         CARRERA 8A, N 13-31, PISOS 7-11
         4260 - Bogota
         Colombia
         Phone: +57 1 3411570
                +57 1 2823480


WEST CARIBBEAN: Flights Suspended After August 16 Crash
-------------------------------------------------------
Colombia's West Caribbean Airways, the owner of the charter
plane that crashed in western Venezuela on Tuesday killing 160
people, was suspended from flying, Bloomberg reports. The
government suspended the airline's operations to facilitate the
investigation conducted by the civil air authority Aerocivil and
French technicians on the cause of the engine failure that made
the plane crash.

Aerocivil reviewed records on the previous inspections carried
out on the McDonnell Douglas MD-82 jet and confirmed that the
crashed aircraft had undergone a full inspection before the
flight with no indications of mechanical problems.

The carrier's safety record was called into question after the
MD-82 aircraft crashed in Sierra de Prija, killing 152 French
vacationers and eight Colombian crew members.

The crash was the second major incident suffered by West
Caribbean in six months. The first occurred on March 26 during
takeoff en route to San Andres island from Providencia island,
killing seven passengers and two crew members while injuring six
others.

In January this year, the aviation authority fined West
Caribbean Airways $45,000 for violations such as pilots and
other crew members flying too many hours, lack of training for
flight crews and failure to log flight data.

On August 16, a spokeswoman of the port and transport regulator
revealed in an interview that West Caribbean was put under
observation by the regulator after its yearend financial
statement showed a loss.

West Caribbean, which only had four planes registered to fly,
grounded its remaining aircraft, two of which are currently
undergoing maintenance. The airline's only remaining operational
aircraft is a LET 410 Turboprop, which operates several smaller
aircraft that are not registered for commercial use.



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

PETROECUADOR: Suspends Crude Oil Production Amid Protests
---------------------------------------------------------
Ecuadorian President Alfredo Palacio revealed that state-owned
oil company Petroecuador has been forced to stop all its crude
oil production due to protests in two Amazon provinces. Earlier
on Thursday, the Company declared force majeure on its exports,
invoking a contractual clause allowing it to suspend shipments
due to events beyond its control.

An executive from Petroecuador's international commerce
department said that companies affected by the force majeure are
being informed of the decision, and that a new export calendar
was being drafted.

Petroecuador usually produces 201,000 barrels per day and
exports 144,000 barrels per day.

Protesters are demanding that foreign oil companies operating in
the region finance infrastructure projects and more job
opportunities. They also want the government to renegotiate
contracts with international oil companies, including Occidental
Petroleum Corp., Petrobras and EnCana Corp., to raise state
participation.



=====================
E L   S A L V A D O R
=====================

BANCO AGRICOLA: S&P Affirms 'BB/B' Ratings; Outlook Stable
----------------------------------------------------------
Standard & Poor's Rating Services affirmed Thursday its 'BB/B'
counterparty credit and CD ratings on Banco Agricola S.A. The
outlook is stable.

"The ratings are constrained by an important amount of
restructured loans and foreclosures, residual problems in the
coffee sector, and the relatively small size and limited
diversification of El Salvador's economy," said Standard &
Poor's credit analyst Leonardo Bravo. "The ratings are supported
by Banco Agricola's leading market position in El Salvador, its
diversified loan portfolio, its good profitability, and its
broad base of retail deposits. The bank is differentiated from
its peers by better efficiency ratios, lower funding costs, and
lower concentrations in its client base."

Banco Agricola remains El Salvador's largest bank, with $2.9
billion in assets and $318 million in equity as of June 2005 and
a market penetration of 28% in deposits and loans. It benefits
from the largest distribution network in the country.

The stable outlook reflects Standard & Poor's opinion that the
bank's strategies and adequate operations should maintain
profitability at adequate levels in a stable economic
environment. The bank's ratings could improve if nonperforming
assets advance toward Latin American standards, if economic
conditions recover, and if the bank is capable of profiting from
them. However, an economic downturn or the continuation of slow-
growing prospects in the Salvadorian economy could affect the
bank's overall performance, putting pressure on the rating.

Primary Credit Analyst: Leonardo Bravo, Mexico City (52)55-5081-
4406; leonardo_bravo@standardandpoors.com

Secondary Credit Analyst: Francisco Suarez, Mexico City (52) 55-
5081-4474; francisco_suarez@standardandpoors.com


BANCO SALVADORENO: S&P Affirms 'BB/B' Ratings; Outlook Stable
-------------------------------------------------------------
Standard & Poor's Rating Services affirmed Thursday its 'BB/B'
counterparty credit and CD ratings on Banco Salvadoreno S.A. The
outlook is stable.

"The ratings on Banco Salvadoreno are constrained by its
vulnerable asset quality and low reserve coverage of
nonperforming assets, which is also the case for other banks in
the country," said Standard & Poor's credit analyst Leonardo
Bravo. "The ratings are also constrained by the relatively small
size and limited diversification of El Salvador's economy and
strong competition. The ratings are supported by the bank's
satisfactory market position, diversified portfolio, adequate
performance, and lower exposure to real state-related loans than
that of its peers."

The outlook reflects our opinion that the bank's strategies and
adequate operations should maintain profitability at adequate
levels in a stable economic environment. An economic downturn or
the continuation of slow growth in the Salvadorian economy,
however, could affect the bank's overall performance, putting
pressure on the ratings. Market share loss or deterioration of
the bank's financial stand should also pressure the ratings.

The ratings could go up if there is a strong development in
economic conditions, along with a sustainable improvement in
asset quality (including restructured loans and repossessed
assets) and profitability, and if capital ratios are higher than
those of its closest peers.

Primary Credit Analyst: Leonardo Bravo, Mexico City (52)55-5081-
4406; leonardo_bravo@standardandpoors.com

Secondary Credit Analyst: Francisco Suarez, Mexico City (52) 55-
5081-4474; francisco_suarez@standardandpoors.com



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

CINTRA: Sets Mid-November Target Date for Airlines' Sale
--------------------------------------------------------
Government holding company Cintra SA de CV plans to complete the
sale of Aeromexico and Mexicana by mid-November, Bloomberg
reports, citing Andres Conesa, chairman of both carriers
yesterday. Conesa said that 30% of the companies that formally
expressed interest in the two carriers are foreign. Under
Mexican legislation, foreigners are limited to a 25% stake in
airlines, so they must team up with Mexican partners, he said.
Credit Suisse First Boston (CSR) is managing the sale.

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


CNI CANAL: TV Azteca Files Suit Alleging Fraud in GE Deal
---------------------------------------------------------
Embattled Mexican television station CNI Canal 40 has found
itself in another dispute with local broadcaster TV Azteca SA.
According to Dow Jones Newswires, TV Azteca has filed a lawsuit
against the independent television station, alleging fraud in
the latter's loan agreement with GE Mexico, a unit of General
Electric Co. (GE).

The suit, filed with Mexico City's district attorney, alleges
that the loan agreement, which Canal 40 intends to use to pay
back wages owed to workers who went on strike in May, is an
attempt to get around Mexican laws barring foreigners from
running local media companies.

The suit also alleges the station of attempting to defraud its
creditors by accepting the loan. TV Azteca is one of Canal 40's
creditors.

GE Mexico authorized a loan of up to about MXN53 million
($1=MXN10.6785), of which MXN3.5 million has been given.
Televisora del Valle de Mexico, which holds the license for
Canal 40, said the loan agreement came with no other
obligations.

But the Communications and Transport Ministry said GE Mexico
admitted that in addition to authorizing the loan, it would also
consider taking a minority stake in the station.

Local authorities have asked the U.S. Federal Communications
Commission to help determine what General Electric's intentions
are with Canal 40.

Meanwhile, a court has blocked the use of the funds following a
lawsuit filed by another Canal 40 creditor.

The dispute between TV Azteca and Canal 40 dates back to 1998
when TV Azteca signed contracts with Canal 40 President Javier
Moreno Valle. Under the contracts, which included an option to
acquire 51% of the station's licensee - Televisora del Valle de
Mexico - TV Azteca loaned the Company US$10 million and advanced
an additional US$15 million against future earnings.

But the deal fell into dispute in 2000, when Moreno Valle pulled
out and argued that the call option wasn't valid. TV Azteca sued
Moreno Valle for breach of contract.

After the Paris-based International Court of Arbitration ruled
in December 2002 that the option was valid, TV Azteca took over
Canal 40's broadcasting facilities by force.

However, Mexico's Communications and Transport Ministry ordered
the station returned to Televisora del Valle de Mexico in
January 2003.



===========
P A N A M A
===========

CABLE & WIRELESS: Moody's Sees Progress Favorable, Ups Outlook
--------------------------------------------------------------
Moody's Investors Service changed Thursday the outlook of Cable
& Wireless plc ("C&W") to stable from negative. The change in
outlook follows the company's announcement that it has reached
agreement to acquire Chelys Limited ("Energis") and reflects the
progress the company has made since 2003 in restructuring and
rationalising its operations (including successfully exiting its
US domestic business within initial cost guidance) combined with
clarification of its UK business strategy provided by the
announced acquisition of Energis. Whilst C&W's acquisition of
Energis remains subject to regulatory approval, the outlook
change reflects Moody's expectation that all necessary
regulatory approvals will be obtained.

Whilst the UK telecoms competitive landscape remains fragmented,
Moody's believes that the increased scale of the combined C&W UK
and Energis operations should better position the company to
make the required investment in technology and new services and
to better withstand the margin pressure prevalent in the sector
(particularly in switched voice). Moreover, going forward, the
company's operating margins should benefit from Energis' strong
customer relationships and its focus on providing business
customers with valued added services.

Given C&W's current financial flexibility, Moody's views the
company as strongly positioned in the Ba3 category. This
incorporates Moody's expectation that the company will continue
to operate a prudent financial policy and, in this light,
Moody's views positively the recent announcement that the
company's share buy-back scheme is to be suspended. Nonetheless,
it is Moody's understanding that the company may pursue small to
medium sized acquisitions of regional integrated telcos and that
the company's current dividend policy will be maintained.

Downward pressure on the rating would likely result from a
substantial reduction in liquidity (e.g. as a result of medium
sized acquisitions and/or an increase in distributions to
shareholders) combined with a deterioration in the cash flow
performance of C&W's national telcos.

Conversely, upward pressure on the rating would likely be driven
by a sustained improvement in the operating margins of the UK
business which is likely to be a result of a change in sales mix
from switched voice to broadband and IP services combined with
continued cost cutting and leveraging of synergies associated
with the Energis acquisition.

The rating remains constrained by the overall prospects for
C&W's UK operations given the highly competitive nature of the
UK business telecommunications market, which is characterised by
overcapacity and pricing pressure (especially in the switched
voice market). The rating also reflects risks associated with
increased expenditure and the absorption of losses relating to
the expansion of Bulldog as well as Moody's view that C&W may
participate in future consolidation of the broadband retail
market.

Moody's continues to positively recognise, however, that C&W's
large cash balance (pro-forma for the acquisition, the company
will have c. GBP 1.2 million of cash balances at the group
level) combined with the solid cash flow generation of its
national telco businesses and limited short term debt maturities
provides the company with an ample liquidity cushion. The rating
also positively considers management's strong focus on cost
containment and increasing cash flow as well as the substantial
improvement in on-going profitability.

Affected ratings include the following:

Cable & Wireless Plc:
- Corporate family rating of Ba3
- GBP200 million 8.75 % Eurobonds due 2012 rated Ba3
- GBP258 million 4.0% Convertible Eurobonds due 2010 rated Ba3

Cable & Wireless International Finance B.V.:
- GBP200 million 8.625% gtd Eurobonds due 2019 rated Ba3

The outlook for all ratings is stable.

The not-prime short term rating for Cable & Wireless
International N.A. Inc. has been withdrawn.

Domiciled in London UK, Cable & Wireless plc is a world leading
group of international communications companies. The group
provides voice, data and IP services to business and residential
customers, as well as services to other telecoms carriers,
mobile operators and providers of content, applications and
internet services. Cable & Wireless' principal operations are
the UK, Asia, the Caribbean, Panama and the Middle East. For the
year ended 31 March, 2005, Cable & Wireless plc reported group
revenues of GBP 3.2



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

EDC: Seeks to Expand Genevapca's Generation Projects
----------------------------------------------------
Power company L.A. Electricidad de Caracas (EDC), the local unit
of US company AES Corp (NYSE: AES) is seeking new generation
projects for its Genevapca subsidiary, reports Business News
Americas. EDC, according to company president Julian Nebreda, is
looking to boost Genevapca's role in contributing to the bottom
line due in part to the fact that power rates have been
unchanged for almost two years.

Genevapca currently supplies power to state oil firm Petroleos
de Venezuela's (PDVSA) CRP refinery in Punto Fijo with almost 1
million barrels a day of processing capacity. Nebreda is
confident that Genevapca can do for other clients what it has
been doing for PDVSA for almost 10 years.

He downplayed the possible implications of PDVSA's plans to
install a 450MW thermoelectric project near the CRP in
partnership with state-owned power company Cadafe. According to
him, their plans will not interfere with Genevapca's business.

"Genevapca has a contract for 10 more years. I understand what
PDVSA and Cadafe are doing is to serve the national
interconnected system (SIN). What we do is for the refinery,
even though this year we sold 400GWh to the SIN," he said.

AES acquired control of EDC in 2000 when it bought more than 80%
of the Company's capital. EDC generates, transmits, and
distributes power to about a million clients in the greater
Caracas area.

CONTACT: C.A. La Electricidad de Caracas
         Avenida Vollmer
         Caracas, Venezuela

         Scarlett Alvarez
         Directora: Relaciones con Inversionistas
         Tel: 0212 502-2950
         E-mail: edcinversionistas@aes.com


PDVSA: Minister Confirms No Gasoline Price Increase
---------------------------------------------------
The Minister of Energy and Petroleum, Rafael Ramirez, confirmed
that the fact that only unleaded gasoline will be sold from now
on in the country will not impact the price of this fuel in any
manner.

"We are not changing the price of gasoline, there will be no
price adjustment, that is not contemplated," said the minister.

Mr. Ramirez explained that some sectors which were reluctant to
use unleaded gasoline have been speculating about an alleged
price increase for this fuel that is being distributed
throughout the country and that should be available everywhere
at the end of this month. Both, the 91-octane (unleaded)
gasoline and the 95-octane (unleaded) gasoline will be sold at
the same price as they have been sold to this date.

"Unleaded gasoline received negative comments from some people
who said it was an excuse to increase gasoline price. This is
not the case. Fuel prices will remain as they are now," stated
the Minister of Energy and Petroleum.

Additionally, Mr. Ramírez explained that this process of selling
only unleaded gasoline in the country is part of a set of
reforms undertaken by the Executive branch of government to
settle an old social debt the Republic has with Venezuelan
people.

The process is scheduled to be completed by the end of August.
This fuel can be used by any car, regardless of the year it was
sold, and contributes to improve air quality in the cities.

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: Rating Reflects Solid External Liquidity
-----------------------------------------------------
Rationale

The ratings (B+/Stable/B) on the Bolivarian Republic of
Venezuela are based on its solid external liquidity and debt
position and relatively low debt and interest burden. Offsetting
these positive factors are the sovereign's high levels of
political polarization and weak institutions as well as a
deterioration of the system of checks and balances. In addition,
Venezuela's successive economic teams have failed to improve
income distribution and deal effectively with poverty and social
issues, and the sovereign depends excessively on oil revenues.

Outlook

The outlook reflects the balance between increased financial
flexibility because of high oil revenue on the one hand and 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, or increased social unrest leads to further economic
and/or political turmoil. Conversely, greater fiscal discipline-
coupled with improved economic policy management along with
improved prospects for the oil sector through higher levels of
investment-could lead to an improvement in 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

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

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