TCRLA_Public/050901.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, September 1, 2005, Vol. 6, Issue 173

                            Headlines


A R G E N T I N A

AGUAS PROVINCIALES: Investors Team Up to Bid for Control
CLINICA LOS CEDROS: Reorganization Intiated by Court Ruling
COMPANIA INTERAMERICANA: Required Reports Due September 2
CONSTRUCCIONES RIAZOR: Court Approves Concurso Motion
IMPRESIONES ARCO IRIS: Deadline for General Report Approaches

LEFA S.A.: Judge Approves Bankruptcy
SAN ALFONSO: Gets Court Protection to Reorganize
TEDAR S.A.: Trustee to Submit General Report
TGS: Controlling Company Reaches Restructuring Agreement Terms
VINTAGE PETROLEUM: Production Lowered Due to Hurricane Katrina

WINES S.R.L.: Creditors to Vote on Company's Settlement Proposal
* SANTIAGO DEL ESTERO: Fitch Downgrades Ser 04 Notes to 'D'


B E R M U D A

INTELSAT: Fitch Places Rating on Rating Watch Negative
LORAL SPACE: Reaches Settlement For NY Securities Fraud Lawsuit


B R A Z I L

BRASKEM: Shareholders Invited to September 26 Meeting
COPEL: Changes Financial, Investor Relations Officers
VARIG: Court's Decision May Curtail Sale Plans


C O L O M B I A

EDT: Liquidator Sets $88.7M as Minimum Value for Assets
PAZ DEL RIO: Brazilian Angling for Company Control
ROYAL SHELL: Still Analyzing Offers for 38 Service Stations
TELECOM: Chief Auditor Advises Against Telmex Deal


E C U A D O R

PETROECUADOR: Crude Supply MOU with PDVSA Expected This Week


H O N D U R A S

* HONDURAS: US to Pardon $125M Debt


J A M A I C A

KAISER ALUMINUM: Exclusive Periods Extended Until September 30


M E X I C O

ASARCO: Seeks Bracewell as Special Litigation Counsel
ASARCO: Taps Quarles as Special Counsel to Tackle Labor Issues
GRUPO DESC: Restricted Financial Options Hamper Ratings
SICARTSA: Strike Induced Losses Reach $87M


P A R A G U A Y

ACEPAR: Seam Orders Plant Shutdown


V E N E Z U E L A

EDC: Seeks Ministry's OK to Up Tariff for New Electricity System
IBH: Venprecar-Orinoco Iron Merger Ratified


     - - - - - - - - - -


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A R G E N T I N A
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AGUAS PROVINCIALES: Investors Team Up to Bid for Control
--------------------------------------------------------
Private investors from the province of Santa Fe are joining
forces in making a bid for control of water utility Aguas
Provinciales de Santa Fe, reports Business News Americas.

Following the collapse of the deal between gas distributor
Emgasud and French firm Suez, the group, which consist of Mr.
Sergio Tasselli and some businesspeople in the local port
business, agriculture and the Manzano-Vila-Vignatti group,
informed the Santa Fe provincial government of their interest in
taking control of the provincial water utility.

The Tasselli group proposes to buy a controlling stake in Aguas
Provinciales and to have the business run by Latinaguas, - which
already runs water services in La Rioja, Salta and Corrientes -
and 5 de Septiembre - established by former employees of the
Obras Sanitarias water utility.

Meanwhile, Emgasud has not given up its hopes of buying the
controlling share of Aguas de Santa Fe.

Although the previous deal to buy 77.5% of the concessionaire
from Suez fell through after the government executed the
concession contract guarantees, Emgasud may look to Aguas
shareholder Banco Galicia to help negotiate with the French
owners.

The firm has also told the Santa Fe government that it is
willing to intercede in the problems between the provincial
governor Jorge Obeid and Suez.

Suez has already declared that it will be moving out of the
province on November 25, whether control of Aguas goes to the
local government or to a private group.


CLINICA LOS CEDROS: Reorganization Intiated by Court Ruling
-----------------------------------------------------------
Court No. 15 of Buenos Aires' civil and commercial tribunal
approved the "Concurso Preventivo" petition filed by Clinica Los
Cedros de Tapiales S.A., reports local news source La Nacion.
The Company, which defaulted on its debt payments as long ago as
October 2001, will undergo a reorganization process.

A court-appointed receiver will verify creditors' proofs of
claim to ascertain the nature and amount of the Company's debts.
The receiver will also prepare the individual and general
reports on the case.

Clerk No. 30 assists the court on the case.

CONTACT: Clinica Los Cedros de Tapiales S.A.
         Av. Las Heras 1965
         Buenos Aires


COMPANIA INTERAMERICANA: Required Reports Due September 2
---------------------------------------------------------
The general report on the Compania Interamericana de Transportes
S.R.L. bankruptcy case will be submitted tomorrow, Sep. 2, 2005.
Court No. 23 of Buenos Aires' civil and commercial tribunal
declared Compania Interamericana de Transportes S.R.L. bankrupt
after the Company failed to pay its creditors. The court
selected Mr. Roberto Leibovicius as trustee.

Mr. Leibovicius reviewed creditors' proofs of claim until May
23, 2005. The verified claims served as basis for the individual
reports, which were presented for court approval on July 6.

Clerk No. 45 assists the court on this case that will end with
the sale of the Company's assets. Proceeds from the sale will be
used to repay the Company's debts.

CONTACT: Compania Interamericana de Transportes S.R.L.
         Ventana 3665
         Buenos Aires

         Mr. Roberto Leibovicius, Trustee
         Tucuman 1585
         Buenos Aires


CONSTRUCCIONES RIAZOR: Court Approves Concurso Motion
-----------------------------------------------------
Court No. 24 of Buenos Aires' civil and commercial tribunal
approved a petition for reorganization filed by Construcciones
Riazor S.A., according to a La Nacion report. The Company has
been in default on its debt payments since November 23, 2004.

A court-appointed trustee will verify claims and submit the
individual and general reports to court. Dates for submission of
these reports as well as the deadline for verification are yet
to be disclosed.

Clerk No. 48 assists the court on the case.

CONTACT: Construcciones Riazor S.A.
         Av. de Mayo 1365
         Buenos Aires


IMPRESIONES ARCO IRIS: Deadline for General Report Approaches
-------------------------------------------------------------
The deadline for the submission of the general report on the
liquidation of Buenos Aires-based Impresiones Arco Iris Cordoba
S.A. (antes Arco Iris Impresiones S.A.) will be tomorrow, Sep.
2, 2005. The Company was declared bankrupt by Court No. 22 of
the city's civil and commercial tribunal.

Mr. Carlos Daniel Brezinski, the court-appointed trustee,
verified creditors' proofs of claim until May 23, 2005. The
validated claims were presented in court as individual reports
on July 6, 2005.

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

CONTACT: Mr. Carlos Daniel Brezinski, Trustee
         Lambare 1140
         Buenos Aires


LEFA S.A.: Judge Approves Bankruptcy
------------------------------------
Lefa S.A. was declared bankrupt after Court No. 2 of Buenos
Aires' civil and commercial tribunal endorsed the petition of
Ms. Angela de Pecci for the Company's liquidation. Argentine
daily La Nacion reports that Ms. de Pecci has claims totaling
$104,582.81 against Lefa S.A.

The court assigned Alfonso Badaracco to supervise the
liquidation process as trustee. Mr. Badaracco will validate
creditors' proofs of claim until Oct. 31, 2005.

The city's Clerk No. 3 assists the court in resolving this case.

CONTACT: Lefa S.A.
         Manuel Artigas 5270
         Buenos Aires

         Mr. Alfonso Badaracco, Trustee
         Esmeralda 980
         Buenos Aires


SAN ALFONSO: Gets Court Protection to Reorganize
------------------------------------------------
San Alfonso S.R.L. will begin reorganization following the
approval of its petition by Court No. 8 of Cordoba's civil and
commercial tribunal. The opening of the reorganization will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

Raul Omar Sarmiento, Ester Lazzarone and Susana Virginia Alamo
will oversee the reorganization proceedings as the court-
appointed trustees. He will verify creditors' claims until Sep.
28, 2005. The validated claims will be presented in court as
individual reports on Nov. 15, 2005.

The trustees are also required by the court to submit a general
report essentially auditing the Company's accounting and
business records as well as summarizing important events
pertaining to the reorganization. The report will be presented
in court on February 14, 2005.

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

CONTACT: San Alfonso S.R.L.
         Avda. Donato Alvarez 8388
         Ciudad de Cordoba (Cordoba)

         Mr. Raul Omar Sarmiento
         Ms. Ester Lazzarone
         Ms. Susana Virginia Alamo, Trustees
         Corro 472
         Ciudad de Cordoba (Cordoba)


TEDAR S.A.: Trustee to Submit General Report
--------------------------------------------
Ms. Graciela Silvia Turco, who was overseeing the reorganization
proceedings of Tedar S.A., will submit tomorrow, Sep. 2, 2005, a
report on the Company's accounting and business records as well
as summary of important events pertaining to the reorganization.

The trustee verified creditors' claims until May 26, 2005. The
validated claims were presented in court as individual reports
on July 8, 2005.

An informative assembly, the final stage of a reorganization
where the settlement proposal is presented to the Company's
creditors for approval, is scheduled for February 6 next year.

Tedar S.A. began reorganization following the approval of its
petition by Court No. 22 of Buenos Aires' civil and commercial
tribunal.

CONTACT: Tedar S.A.
         San Nicolas 410
         Buenos Aires

         Ms. Graciela Silvia Turco, Trustee
         Cochabamba 4272
         Buenos Aires


TGS: Controlling Company Reaches Restructuring Agreement Terms
--------------------------------------------------------------
Transportadora de Gas del Sur S.A. ("TGS" or "the Company")
(NYSE: TGS, MERVAL:TGSU2) announced Monday the closing of the
first stage of the Master Settlement and Mutual Release
Agreement ( the Settlement Agreement), entered into by the
shareholders of Compania de Inversiones de Energia S.A. (CIESA),
the Company's controlling shareholder.  The subscription of the
Settlement Agreement was announced by TGS on April 16, 2004.

TGS was informed Monday that, according to the provisions of the
Settlement Agreement:

1) Petrobras Energia S.A. and its subsidiary Petrobras Hispano
Argentina S.A. have transferred in favor of certain Enron Corp
affiliates (Enron) 58,410,452 of TGS class "B" common shares
and,

2) at the same time Enron has transferred 40% of CIESA's capital
stock to a trust, which trustee is ABN AMRO BANK N.V. Sucursal
Argentina (the trustee), who will administrate and transfer
these shares to whom CIESA designates.

According to the Settlement Agreement, these share transfers are
aimed at enhancing CIESA's financial debt restructuring.

In the second stage of the Settlement Agreement and subject to
the approval of the Argentine regulatory authorities and, in
case that CIESA agrees with its creditors the restructuring of
its financial debt, Enron will transfer its remaining 10%
shareholding in CIESA to the creditors, trustee or alternative
entity, as may be agreed in the CIESA's debt restructuring
agreement, in exchange for the simultaneous transfer of the TGS'
class "B" common shares held by CIESA, which represents 4.3% of
TGS's capital stock.

TGS, with a current firm contracted capacity of approximately
66.4 MMm3/d or 2.3 Bcf/d, is Argentina's leading transporter of
natural gas. The Company is also Argentina's leading processor
of natural gas and one of the largest marketers of natural gas
liquids.  TGS is quoted on both the New York and Buenos Aires
stock exchanges under the ticker symbols TGS and TGSU2,
respectively.  TGS's controlling shareholder is Compania de
Inversiones de Energia S.A. (CIESA), which together certain
Enron Corp. subsidiaries, hold approximately 70% of the
Company's common stock. CIESA is currently owned 50% by
Petrobras Energia S.A. and one of its subsidiary, 40% by a trust
and 10% by a subsidiary of Enron Corp.

CONTACT: Transportadora de Gas del Sur S.A.
         Don Bosco 3672, 5th Floor
         1206 Capital Federal
         Buenos Aires,
         Phone: (212) 688-5144
         Fax: (212) 688-5213
         E-mail: eduardo_pawluszek@tgs.com.ar
         Web Site: http://www.tgs.com.ar/


VINTAGE PETROLEUM: Production Lowered Due to Hurricane Katrina
--------------------------------------------------------------
Vintage Petroleum, Inc. (NYSE:VPI) announced Tuesday that it has
temporarily shut-down net daily production of approximately
4,000 barrels of oil equivalent in the Company's eastern Gulf
Coast operations as a result of Hurricane Katrina. Activity is
currently underway to assess the extent of any damage and the
timing required to restore production. The volume temporarily
shut-in represents approximately five percent of the net daily
volume produced in the second quarter of 2005.

Vintage Petroleum, Inc. is an independent energy company engaged
in the acquisition, exploitation and exploration of oil and gas
properties and the marketing of natural gas and crude oil.
Company headquarters are in Tulsa, Oklahoma, and its common
shares are traded on the New York Stock Exchange under the
symbol VPI.

CONTACT: Vintage Petroleum, Inc., Tulsa
         Robert E. Phaneuf
         Phone: 918-592-0101
         URL: www.vintagepetroleum.com


WINES S.R.L.: Creditors to Vote on Company's Settlement Proposal
----------------------------------------------------------------
The creditors of Wines S.R.L., a company under reorganization,
will vote on the settlement proposal prepared by the Company
during the informative assembly tomorrow, Sep. 2, 2005.

Ms. Elina Marisa Romero, the trustee tasked with examining the
claims pertaining to the Wines S.R.L. reorganization case,
submitted individual reports on March 3, 2005. Ms. Romero also
presented a general report in court on April 18, 2005.

San Juan's civil and commercial Court No. 2 handles the
Company's case.

CONTACT: Wines S.R.L.
         Guemes 183
         Sur (San Juan)

         Ms. Elina Marisa Romero, Trustee
         Mitre 169
         Este (San Juan)


* SANTIAGO DEL ESTERO: Fitch Downgrades Ser 04 Notes to 'D'
-----------------------------------------------------------
Fitch Ratings has downgraded the global scale foreign and local
currency ratings of Santiago del Estero's series 04 under the
co-participation tax revenue collateralized medium-term note
program, to 'D' from 'C', Rating Watch Negative.

The rating action followed the default on the debt service
payment of series 04 notes, of US$1,066,035 due on Aug. 24,
2005. The trustee did not use the funds deposited in the reserve
account to pay the debt service.

This constitutes an event of default and, consequently the
holders of at least 20% of the aggregate principal amount of
series 04 notes outstanding may declare immediately due and
payable the principal amount of all the notes issued under the
medium-term note program (including series 05 notes).

CONTACT:  Fitch Ratings
          Sofia Migueliz, + 11 5325-8100
          Eduardo D'Orazio, + 11 5325-8100
          (Argentina)

          Alfredo Gomez Garza, + 81 8335-7179
          (Mexico)

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



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INTELSAT: Fitch Places Rating on Rating Watch Negative
------------------------------------------------------
Fitch has placed the ratings of Intelsat, Ltd. (Intelsat),
wholly owned subsidiary Intelsat (Bermuda), Ltd. (Intelsat
Bermuda), and operating subsidiary Intelsat Subsidiary Holding
Company Ltd. (HoldCo) on Rating Watch Negative following
Intelsat's announcement that it has signed a definitive
agreement to acquire PanAmSat Holding Corporation (PanAmSat) for
$3.2 billion, or $25 per share of PanAmSat common stock, plus
the assumption of $3.2 billion of PanAmSat debt. The acquisition
would create the largest satellite communications company in the
world, with a total of 53 satellites and combined annual
revenues of approximately $1.9 billion.

Fitch currently rates Intelsat's debt as follows:

Intelsat, Ltd.
  --Issuer default rating 'B-';
  --Senior unsecured notes 'CCC'; recovery rating 'R6'.

Intelsat (Bermuda), Ltd.
  --Senior unsecured discount notes 'B-'; recovery rating 'R4'.

Intelsat Subsidiary Holding Company Ltd.
  --Senior unsecured notes at 'B+'; recovery rating 'R2';
  --Senior secured credit facilities at 'BB-'; recovery rating
    'R1'.

The Rating Watch Negative reflects the fact that a significant
portion of the acquisition price will likely be debt financed
and that the acquisition will trigger the Change of Control
provisions in $1.2 billion of PanAmSat's publicly traded debt,
requiring this debt to be refinanced. In addition, Fitch
believes that Intelsat's financial metrics will be negatively
affected as a result of the acquisition as debt balances could
rise to as much as $11.4 billion on a pro forma basis (from a
combined $8.2 billion currently). A substantial portion of the
financing for the transaction is expected to be raised at
Intelsat Bermuda. Prior to this financing and the closing of the
transaction, Intelsat Bermuda is expected to transfer
substantially all of its assets and liabilities to a newly
formed wholly owned subsidiary. Upon completion of the
transaction, both PanAmSat and HoldCo will be direct or indirect
wholly owned subsidiaries of Intelsat Bermuda, and PanAmSat and
its subsidiaries will continue as separate corporate entities.

The Rating Watch Negative also reflects the fact that PanAmSat
will continue to pay dividends on its publicly traded stock
until the acquisition is consummated (the dividend is currently
$47.5 million per quarter). In addition, the acquisition will
require regulatory approvals from numerous U.S. and foreign
regulatory agencies and is expected to take from 12 to 18 months
to complete if successful. Other concerns include low industry
capacity utilization rates (about 60%) and slow growth in demand
for satellite broadband services. In addition, both companies
self-insure the majority of their satellites, which could result
in significant costs upon failure.

Fitch notes that the contemplated acquisition would create a
satellite powerhouse with a combined 53 satellites serving
customers in some 220 countries and territories. This compares
favorably to SES Global (29 satellites with a minority stake in
10 other satellites), Eutelsat S.A. (20 satellites), and New
Skies Satellites B.V. (five satellites). In addition, the
combination would result in a more balanced revenue stream as
PanAmSat revenues are largely from video services (about two-
thirds) and approximately one-half of revenues are generated in
the U.S. Intelsat's revenue stream comes more from telephony,
data, and broadband, among others (about 20% is video), and the
majority of its revenues are international. Because Intelsat
plans to consolidate the combined entity's headquarters in
Washington, D.C., Fitch believes that certain cost savings could
be realized.

Fitch plans to review the proposed transaction in more detail
when additional information is made available. Specifically,
Fitch will be focusing on the proposed capital structure and its
suitability for a company in this industry. Fitch will also be
focusing on the new entity's ability to generate free cash flow,
its plans to reduce debt, and proposed capital expenditure
levels to maintain the competitiveness of the combined satellite
fleet.

Fitch's rating action affects about $5.4 billion of existing
debt including undrawn bank lines.

CONTACT:  Eric K. Tutterow +1-312-368-3218, Chicago
          Amol Joshi +1-212-908-0543, New York

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


LORAL SPACE: Reaches Settlement For NY Securities Fraud Lawsuit
---------------------------------------------------------------
Loral Space & Communications Ltd. reached a settlement for the
consolidated securities class action filed against it in the
United States District Court for the Southern District of New
York. The suit also names as defendants Globalstar
Telecommunications Limited (GTL), Bernard L. Schwartz, the
Company's chief executive officer and chairman of the board of
directors and other defendants and is styled "In re Globalstar
Securities Litigation."

On September 26, 2001, the nineteen separate purported class
action lawsuits filed in the United States District Court for
the Southern District of New York by various holders of
securities of GTL and Globalstar L.P. (Globalstar) were
consolidated. In November 2001, plaintiffs in the consolidated
action filed a consolidated amended class action complaint,
alleging:

(1) that all defendants (except Loral) violated Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder, by making material misstatements or failing to state
material facts about Globalstar's business and prospects,

(2) that defendants Loral and Mr. Schwartz are secondarily
liable for these alleged misstatements and omissions under
Section 20(a) of the Exchange Act as alleged "controlling
persons" of Globalstar,

(3) that defendants GTL and Mr. Schwartz are liable under
Section 11 of the Securities Act of 1933 (the "Securities Act")
for untrue statements of material facts in or omissions of
material facts from a registration statement relating to the
sale of shares of GTL common stock in January 2000,

(4) that defendant GTL is liable under Section 12(2)(a) of the
Securities Act for untrue statements of material facts in or
omissions of material facts from a prospectus and prospectus
supplement relating to the sale of shares of GTL common stock in
January 2000, and

(5) that defendants Loral and Mr. Schwartz are secondarily
liable under Section 15 of the Securities Act for GTL's primary
violations of Sections 11 and 12(2)(a) of the Securities Act as
alleged "controlling persons" of GTL.

The class of plaintiffs on whose behalf the lawsuit has been
asserted consists of all buyers of securities of Globalstar,
Globalstar Capital and GTL during the period from December 6,
1999 through October 27, 2000, excluding the defendants and
certain persons related to or affiliated with them.

In December 2003, a motion to dismiss the amended complaint in
its entirety was denied by the court insofar as GTL and Mr.
Schwartz are concerned, and discovery has commenced and is
ongoing. In December 2004, plaintiffs' motion for certification
of the class was granted. In June 2004, Globalstar was
dissolved, and in October 2004, GTL was liquidated pursuant to
chapter 7 of the Bankruptcy Code.

This case was preliminarily settled in July 2005, which
settlement might give rise to a general unsecured prepetition
claim by Mr. Schwartz against the company to the extent, if any,
the $20 million settlement amount is not reimbursed by
Globalstar's insurers.

The suit is styled "In re Globalstar Securities Litigation, Case
No. 01-CV-1748 (SHS)," filed in the United States District Court
for the Southern District of New York, under Judge P. Kevin
Castel. Representing the plaintiffs is Eric James Belfi of
Murray, Frank & Sailer, LLP, 275 Madison Avenue, Ste. 801, New
York, NY 10016, Phone: 212-682-1818, Fax: 212-682-1892, E-mail:
ebelfi@murrayfrank.com. Representing the Company and Bernard
Schwartz are Jeanne Marie Luboja, Francis James Menton of
Willkie Farr & Gallagher LLP (NY), 787 Seventh Avenue, New York,
NY 10019, Phone: (212) 728-8000, Fax: (212) 728-8111, E-mail:
maosdny@willkie.com (Class Action Reporter, Wednesday, August
31, 2005, Issue 172)



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BRASKEM: Shareholders Invited to September 26 Meeting
-----------------------------------------------------
The shareholders of petrochemicals company BRASKEM S.A. are
summoned to meet at the Extraordinary General Meeting to be held
on September 26, 2005, at 10:30 PM, at the headquarters of the
Company, at Rua Eteno, n(o) 1.561, Polo Petroquimico,
Municipality of Camacari, State of Bahia, in order to deliberate
on the analysis and approval of the Long Term Incentive Plan.

The draft of the Long Term Incentive Plan will be made available
to shareholders from August 26th 2005 at the headquarters, at
the Company's Web site (www.braskem.com.br), at the Brazilian
Securities Commission - Comissao de Valores Mobiliarios - CVM,
and at the Sao Paulo Stock Exchange - BOVESPA.

Shareholders who may wish to consult and examine the draft of
the aforementioned Plan at the headquarters of the Company shall
schedule date and time to visit through the phones: (55 11)
3443-9529 and (55 11) 3443-9744 with the Investor Relations
Department.

Attention: Pursuant to the Rules of Health, Safety and
Environment (SSMA) in force at the headquarters of the Company,
which establishes the guidelines to the acess control and
circulation of individuals and vehicles the internal and
external areas of the headquarters, all the Shareholders, as
well as their legal representatives are requested to be present
for the aforementioned Meeting al least 30 minutes before hand,
in order to assure the compliance with the basic instructions
training procedures of SSMA in force in the Company, which are
available for consult at the headquarters of the Company.

Braskem is controlled by Brazilian industrial group Mariani and
engineering group Odebrecht and was created in 2002 through the
acquisition of petrochemicals assets following the liquidation
of bankrupt bank Economico. Since its creation, shareholders
have been restructuring the group's assets, resulting in
operational synergies that have so far reduced costs by BRL192
million.

CONTACT: BAK - Braskem S.A.
         Rua Eteno, 1561
         Polo Petroquimico de Camacari
         Camacari
         Bahia CEP 42810-000
         Brazil
         URL: http://www.braskem.com.br
         Phone: (55 11) 3443 9529


COPEL: Changes Financial, Investor Relations Officers
-----------------------------------------------------
The lawyer and chairmen of COPEL'S Fiscal Council, Paulo Roberto
Trompczynski will be COPEL's new Chief Financial and Investor
Relations Officer. Elected by unanimous vote, at the
extraordinary board of directors meeting held on the afternoon
of August 30, to take this position, in replacement of Mr.
Rubens Ghilardi that will remain as the Company's Chief
Executive
Officer.

Trompczynski position at the Fiscal Council will be taken by his
alternate, Serafim Charneski and at the next board meeting,
scheduled for September; the board members will elect a new
chairman.

The new CFO and IRO

Paulo Trompczynski has a wide experience at the public sector
financial area and business law.

In his evaluation, taking the position as Chief Financial
Officer of a company such as Copel "is a challenge", but he
considers his task to be easier from his experience accumulated
during this two and a half years at the Fiscal Council. "I
already know the Company's internal procedures, the controlling
mechanisms and, mainly, the professionals that work in this
area, all of them very capable," says the CFO. "Supported by
this structure, I believe to be able to correspond to this
responsibility and, proudly, I am taking."

Born in Foz do Iguacu, Paulo Trompczynski is 60 years old and
received a degree in law from the Universidade Federal do
Parana. Since the beginning of 2003, was a member and chairman
of Copel's Fiscal Council. During his carrier, he acted as Chief
Officer at the Public Security State Secretariat and State
attorney at the Parana Audit Court, agency were he was also a
legal consultant and technical-legal affairs officer.

He was also chief auditor for the Curitiba City Hall, chief
legal consultant at Fundepar - Fundacao Educacional do Parana
and a member of Banco do Estado do Parana's Fiscal Council.

Before taking this position at Copel, he was a lawyer at Itaipu
Binacional.

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


VARIG: Court's Decision May Curtail Sale Plans
----------------------------------------------
A local court's decision to block Varig from selling its cargo
unit may eventually clip the debt-ridden airline's wings, warned
Varig Chairman David Zylberstajn, reports Dow Jones Newswires.
Last week, Varig announced a deal with Matlin that includes the
sale of its cargo unit, VarigLog. The deal would generate about
US$103 million in cash to cover overdue debts.

However, Judge Giselle Bondim Lopes Ribeiro, of the federal
labor court in Rio de Janeiro, blocked the deal on Monday at the
request of the National Federation of Civil Aviation Workers,
known as Fentac. The judge accepted Fentac's allegations that
the sale was fraudulent and harmful to workers.

According to the court, VarigLog's value is estimated at US$300
million, which is three times higher than the US$100 million
valuation agreed by Varig and Matlin Patterson.

Zylberstajn warned that if the court maintains a suspension of
the VarigLog sale, Varig could halt operations. The sale of
VarigLog is the airline's only alternative to resolve its short-
term cash difficulties.

The cash-flow problems threaten to derail Varig's broader plan
to restructure its balance sheet, which is weighed down by total
liabilities of more than BRL9 billion ($1=BRL2.385).



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EDT: Liquidator Sets $88.7M as Minimum Value for Assets
-------------------------------------------------------
The assets of Barranquilla-based telco EDT, which are to be
publicly auctioned next month, are worth at least COP205 billion
(US$88.7 million), reports Business News Americas. The price was
set by Giszella Arino, in charge of liquidating EDT.

Already, the government has received expressions of interest
from six firms for the assets. Evamaria Uribe Tobon, head of the
public services regulator Superservicios, earlier revealed that
these expressions of interest came from state-run fixed line
operator Colombia Telecomunicaciones (Telecom), Medellin-based
municipal telco EPM and four foreign firms.

By buying EDT's assets, bidders would also be buying stake in
Batelsa, the state-run company that took over operation of the
assets in May 2004. Batelsa is nominally owned by five state
institutions.

The auction will be a simple case of awarding the assets to the
company that bids most Uribe Tobon said, adding, the proceeds
would go towards a fund to help payoff EDT's pension liability,
which was last (mid-2003) calculated at COP250 billion
(US$108mn).

The auction will be managed by local investment bank Corporacion
Financiera del Valle.

Superservicios decided to liquidate EDT in May 2004 due to the
Company's poor financial state and transferred its operations to
Batelsa.


PAZ DEL RIO: Brazilian Angling for Company Control
--------------------------------------------------
Brazilian long steel producer Belgo Mineira wants to take
majority control of Colombian steelmaker Acerias Paz del Rio
(APR) to take advantage of the rising demand for iron and steel
in the Colombian market, reports Business News Americas. But,
according to reports, securing a majority share in APR may prove
to be tough as the government holds 9% of the Company and
workers 43%.

Nevertheless, Hace Alberto Hadad, who recently quit his post as
president of APR, said the Company is entering a new phase
involving a selloff.

"The government has already started working to value the company
and with that information I imagine the process of approaching
possible buyers in Latin America will begin," Business News
Americas quotes Mr. Hadad as saying.

APR, which is based in Boyaca department's Belencito, is
executing an industrial restructuring plan and boasts a 14%
domestic market share for steel.

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


ROYAL SHELL: Still Analyzing Offers for 38 Service Stations
-----------------------------------------------------------
Royal Shell is considering offers from companies interested in
buying its 38 service stations in Colombia, reports Reuters. The
Company did not say with whom it was negotiating but local press
reports have mentioned Brazil's state oil company Petrobras.

After 30 years of absence, Royal Shell returned to Colombia's
service station market in 1999 with a US$6 million investment.
Now it is looking to sell its 38 service stations in the country
as part of a worldwide change in business strategy.


TELECOM: Chief Auditor Advises Against Telmex Deal
--------------------------------------------------
Colombia's Auditor General Antonio Hernandez advised state-run
phone company Colombia Telecomunicaciones (Telecom) to reject an
offer from Telefonos de Mexico (Telmex) to buy 50% plus 1 share
of the Company for US$350 million, reports Reuters.

In a letter to the board of Telecom on Monday, Mr. Hernandez
criticized the offer for lack of transparency and deemed it
unduly generous toward Telmex, owned by Mexican magnate Carlos
Slim.

Hernandez also said the deal does not guarantee continued
pension benefits for Telecom employees and advised against
moving forward "without clarifying points such as these."

But Hernandez's recommendation is nonbonding and analysts
believe the deal will move forward.

"Despite the recommendation of the auditor general, we expect
the transaction to go forward," said Carlos Silva, head of
research at Bogota-based brokerage Ultrabursatiles.

Colombian Communications Minister Martha Pinto said on Tuesday
the country would reject Telmex's offer if the deal broke the
law. But while he criticized the deal, Hernandez never said it
was illegal.

If Telecom agrees to the deal, it could be completed by late
September or early October.

Telmex would put up US$260 million in cash and another US$90
million in stock in its local unit, Telmex Colombia, to merge it
into Telecom.



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

PETROECUADOR: Crude Supply MOU with PDVSA Expected This Week
------------------------------------------------------------
Venezuela's state oil firm PDVSA is likely to sign a memorandum
of understanding (MOU) with its Ecuadorian counterpart
Petroecuador this week or next to supply a total 2.07 million
barrels (Mb) of crude and pier 2 products, reports Business News
Americas.

PDVSA had agreed last week to supply 660,000b of crude in two
shipments in September but that amount has been increased due to
Ecuador's requests for more oil.

The company, however, must first agree on the repayment method,
whether in cash or in crude once Ecuador's normal production
resumes, and whether PDVSA has enough crude available to commit
to a first delivery in September.

Meanwhile, reports have it that Petroecuador no longer needs
Venezuela's assistance as the situation that triggered the
emergency - labor unrest in the Amazon oil-producing areas of
Sucumbios and Orellana - has subsided.



===============
H O N D U R A S
===============

* HONDURAS: US to Pardon $125M Debt
-----------------------------------
Honduras' US$125-million debt to the United States will be
pardoned, Radio America reports, citing Honduras Finance
Minister William Chong Wong.

The signing of the pardon agreement will be "in the next few
weeks", the minister said, adding that the action taken by the
US government is in line with the promise made in June by the
most industrialized countries within the Group of the Eight (G8)
to pardon most of the debt to the highly indebted poor
countries, which included Honduras.

Honduras has been pardoned by the international community 60% of
its foreign debt, which added up to over $5 billion in May this
year.



=============
J A M A I C A
=============

KAISER ALUMINUM: Exclusive Periods Extended Until September 30
--------------------------------------------------------------
The Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for the
District of Delaware extended Kaiser Aluminum Corporation and
its debtor-affiliates, including Alpart Jamaica, Inc., Kaiser
Jamaica Corporation, Kaiser Alumina Australia Corporation, and
Kaiser Finance Corporation -- the Liquidating Debtors' period
within which they have the exclusive right to file a plan or
plans until Sept. 30, 2005.  The Court also extended their
exclusive solicitation period until Nov. 30, 2005.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases.  Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts.  On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 76; Bankruptcy Creditors'
Service, Inc., 215/945-7000)



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

ASARCO: Seeks Bracewell as Special Litigation Counsel
-----------------------------------------------------
Prior to ASARCO LLC's bankruptcy filing, Bracewell & Giuliani
LLP represented the company as environmental counsel, advising
ASARCO on many issues, including environmental litigation.  Eric
Groten, Esq., now a Bracewell partner, has represented ASARCO
for about 20 years, originally when employed by a Phoenix,
Arizona law firm, then by another Texas firm, and since 1998 at
Bracewell. Over the years, Mr. Groten has been the primary air
quality lawyer for various ASARCO assets.

In 1990 to 1992, Mr. Groten represented ASARCO in a contested
permit proceeding at the Texas Air Control Board to authorize
the air emissions from its El Paso smelter.  Since then, he has
advised ASARCO with changes to that permit.  Although the
smelter was idled in 1999, ASARCO applied to renew its air
permit in 2002.  The renewal process also has been highly
contested, and Bracewell has represented ASARCO in all phases of
that permit renewal proceeding.

Two years later, the Texas Commission on Environmental Quality
referred the matter to the State Office of Administrative
Hearings for a contested case hearing, similar to a bench trial
before an administrative law judge.  A two-week evidentiary
hearing concluded in July, and the record is currently in the
process of briefing.

As a result of its prior work on a variety of matters, Bracewell
is uniquely familiar with the Debtor, its business, and its
environmental liabilities.

Accordingly, ASARCO asks the U.S. Bankruptcy Court for the
Southern District of Texas for permission to employ Bracewell as
special litigation counsel pursuant to Section 327(e) of the
Bankruptcy Code, nunc pro tunc to Aug. 9, 2005.  

ASARCO proposes to compensate Bracewell for its legal services
on an hourly basis in accordance with its ordinary and customary
hourly rates:

               Professionals           Hourly Rate
               -------------           -----------
               Attorneys               $400 - $200
               Paraprofessionals           $75

ASARCO will also reimburse the firm for actual and necessary
out-of-pocket expenses.  

Mr. Groten discloses that, within the 90-day period preceding
the commencement of ASARCO's bankruptcy case, Bracewell received
payment from ASARCO of $293,997 for professional services
rendered and expenses incurred before the Petition Date.  In
addition, although Bracewell has a general unsecured claim
against ASARCO for about $163,598 for prepetition services
rendered for which the firm did not receive payment, it does not
have or represent any interest adverse to the Debtor or its
estate on the matters for which it is being retained as special
counsel.

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
rotection 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. 05-0521
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. 3; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


ASARCO: Taps Quarles as Special Counsel to Tackle Labor Issues
--------------------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for
the Southern District of Texas to employ Quarles & Brady Streich
Lang as special litigation counsel for labor and employment
issues, nunc pro tunc to Aug. 9, 2005.

Q&B was employed by ASARCO in early 2004 to represent the
company in collective bargaining and in related labor matters.
Throughout 2004 and 2005, Q&B has provided advice and counsel to
ASARCO on labor relations matters, including representing ASARCO
at the Copper Group and Ray bargaining tables for contracts to
replace those that expired June 30, 2004, and June 30, 2005.  In
addition, Q&B has defended ASARCO in numerous cases before the
National Labor Relations Board filed in 2005 by the labor unions
representing ASARCO's Arizona and Texas employees.  

Because of the types of claims and the entities involved in
these cases, some of these proceedings may fall outside the
scope of the Bankruptcy Code's automatic stay provisions.
Accordingly, ASARCO has asked Q&B to continue its representation
postpetition.

Q&B is a law firm with six offices in four states, employing
approximately 400 to 450 lawyers, including approximately 125 in
Arizona.  About 45 Q&B attorneys work in the L&E Group, which
represents management in labor and employment matters.  As a
result of its prior work on labor and employment matters, Q&B is
uniquely familiar with the Debtor, its business, and the labor-
related legal issues facing ASARCO.

The Debtor proposes to compensate Q&B for its legal services on
an hourly basis in accordance with its ordinary and customary
hourly rates.  The Debtor will also reimburse the firm for
actual and necessary out-of-pocket expenses.

Q&B's hourly rates for L&E lawyers at its Phoenix office range
from $185 to $395.  Q&B's current customary hourly rates for
paraprofessionals range from $130 to $160.

The professionals at Q&B who will primarily represent the Debtor
and their hourly rates are:

          Professional      Position        Hourly Rate
          ------------      --------        -----------
          Dawn Valdivia     Associate           $200
          Jon E. Pettibone  Partner             $365
          Lisa Duran        Partner             $290

The fee arrangement with ASARCO provides for a $45 discount in
Mr. Pettibone's fee.

The fee arrangement also provides for a $30,000 advance to be
replenished monthly.

Mr. Pettibone discloses that within the 90-day period before the
Petition Date, Q&B received payment from ASARCO of $110,852 for
professional services rendered and expenses incurred by Q&B
prior to the Petition Date.  Although Q&B has a general
unsecured claim against ASARCO for $541 for prepetition services
rendered for which Q&B did not receive payment, the firm holds
no interest adverse to the Debtor or its estate on the matters
for which the firm is being retained as special counsel.(ASARCO
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


GRUPO DESC: Restricted Financial Options Hamper Ratings
-------------------------------------------------------
Rationale

The ratings on Desc S.A. de C.V. (Desc) are limited by its tight
financial flexibility due to its debt's terms and conditions,
the continued weakness of its auto parts business, and the
inherent risks of commodity price volatility across its core
business lines. The ratings are supported by the favorable
operating environment for chemical producers in North America
and the success of the company's asset sale program. The rating
also benefits from the positive performance of Desc's food
business, which is expected to build on the improvements made
during the past two years.

Desc is a diversified holding company and one of the largest
companies in Mexico. Its subsidiaries operate in the auto parts,
chemical, food, and real estate sectors. The company is
currently in the midst of an evaluation of its portfolio of
business. Standard & Poor's Ratings Services anticipates that
Desc will continue with its asset sale program, particularly in
the auto parts and real estate business, in order to strengthen
its financial position and financial flexibility. A stronger
balance sheet could set the stage for a new business strategy
aimed at pursuing growth opportunities in Mexico's industrial
sector; nevertheless, in light of Desc's modest free operating
cash flow generation, no major investments are anticipated
during the next two years, as they could compromise the issuer's
efforts to improve its financial flexibility and the conditions
required by its debt structure.

The company's recent announcement that it has closed the
acquisition of the Particle Board segment (Paneles Poderosa) of
Ponderosa Industrial de Mexico S.A. de C.V. is consistent with
our expectations that Desc will strengthen its presence in some
markets but will not pursue major investments during the next
two years, as they could compromise the issuer's efforts to
improve its financial flexibility and the conditions required by
its debt structure. The acquired operation has no debt and the
transaction will be funded with operating cash flow.

Desc's consolidated results reflect the progress of the
company's efforts to improve its operating performance and
strengthen its financial position. Through the successful
completion of a capital increase of 2.7 billion pesos (about
$240 million) and other sources of liquidity, the company has
reduced its total debt by $380 million since year-end 2003. The
aforementioned has had a positive impact on Desc's key financial
ratios. For the past 12 months as of the end of second-quarter
2005, the company posted EBITDA interest coverage, total debt-
to-EBITDA, and FFO-to-total debt ratios of 2.5x, 3.3x, and
21.3%, respectively, which compare favorably to the 2.2x, 5.1x,
and 2.5% posted in the same period a year before. Nevertheless,
weakness in the automotive sector results continues to weigh on
the company's operating and financial performance, and the
outlook, like that of other auto parts producers in North
America, remains challenging. The food sector is expected to
build on the improvement trend in place since 2003, and
expectation for further positive performance also reflects the
continued growth in the packaged and prepared foods business in
Mexico.

The aforementioned, coupled with the positive environment for
the chemical industry in North America, should offset the
continued weakness in the company's auto parts business, which
along with planned asset sales, should allow the company to
continue to reduce its debt and improve its financial
performance. We believe that by year-end 2005, Desc could post
EBITDA interest coverage, total debt-to-EBITDA, and FFO-to-total
debt ratios of about 3.0x, 3.0x, and 35%, respectively.
Nevertheless, weakness in the company's top line and asset sales
program, could prevent the expected improvements in Desc's
financial performance.

Liquidity

Desc's liquidity is tight. The company's liquidity is supported
by a $62 million facility to support its working capital
requirements, $94 million in cash, and a comfortable debt
maturity profile of $28 million for the remainder of 2005 as of
the end of the second quarter. Liquidity is also supported by
the continued success of the company's asset sale program. Debt
maturities of $47 million in 2006, after the recent exchange of
the MTNs for local bonds due 2010, are now more manageable.
Nevertheless, the issuer's ability to tap new sources of
liquidity is limited given the heavy liens on the company's
assets under its syndicated facilities. The company is currently
in compliance with its financial covenants and covenant headroom
should improve as its debt reduction plans move forward.

Outlook

The stable outlook reflects our expectations of a moderate
improvement in Desc's operating performance and debt reduction
through asset sales that should result in improved cash-flow
generation. The aforementioned, if coupled with an improvement
in the company's liquidity, particularly its debt maturity
schedule and a release of liens, could lead to a positive rating
action. Deterioration in the company's key financial ratios
(particularly if its EBITDA interest coverage ratio moves below
2.0x and its total debt-to-EBITDA ratio approaches 4.0x) and/or
further weakness in the company's liquidity would lead to a
negative rating action.

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

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


SICARTSA: Strike Induced Losses Reach $87M
------------------------------------------
Grupo Villacero's Sicartsa steel plant has registered losses of
more than US$87 million and 145,000t of production since the
mining-metalworkers union STMMRM started striking on August 1,
reports Business News Americas. Sicartsa director general Sergio
Villareal warned earlier that mounting losses could result to a
permanent closure of the plant, leaving some 10,000 workers
without jobs.

Already, Grupo Villacero has formally presented to STMMRM a
formal offer to resolve the conflict over alleged contract
violations. Villacero's offer to the Sicartsa workers consisted
of a 4.2% increase in benefits and economic bonuses, a 6% salary
increase, a 9% increase in social benefits and a one-off 2%
salary bonus.

STMMRM director Napoleon Gomez said the union would analyze the
offer. But he said the strike would not be lifted unless there
was a new study to determine if Villacero's plant in Apodaca in
Nuevo Leon state would be subject to a collective contract.



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

ACEPAR: Seam Orders Plant Shutdown
----------------------------------
Steelmaker Acepar has suspended operations following an order
from the environmental authority SEAM, reports Business News
Americas.

SEAM ordered the suspension after an investigation revealed that
Acepar has insufficient dust emission controls, which caused
asthma and allergy problems among residents living in the
vicinity of the plant. The investigation also revealed that
Acepar has improper handling of solid and liquid waste, which is
at risk of contaminating water basins adjacent to the plant.

The environmental authority asked the steelmaker last week to
fix problems that have been causing environmental problems.

Acepar will have to present an environmental contingency plan
within two weeks to start operating again.



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

EDC: Seeks Ministry's OK to Up Tariff for New Electricity System
----------------------------------------------------------------
Electricity firm Electricidad de Caracas (EDC) is requesting
authorization from the energy and oil ministry to increase
tariff for the prepaid electricity service it is testing in a
low-income area of capital Caracas, reports Business News
Americas.

"We have asked the ministry to approve a trial rate for six
months," EDC CEO Ivar Petterson said, adding that the deputy
minister for electricity Nervis Villalobos is sympathetic to the
idea.

EDC is testing the new prepaid service system, known as "Barrio
Electrico," in the La Moran neighborhood of some 300
inhabitants. The system is designed to curtail illegal hookups
by offering a high-tech solution: prepaid service through
special computerized counters called CIUs (Customer Interface
Units) manufactured in South Africa by a firm called Cash Power.

With Barrio Electrico, customers do not need to guess how much
power they have consumed and then wait a month for their bill to
arrive. Instead the CIU emits sound alerts and displays a bar
graphic that indicates exactly how much power is left in the
meter.

When the CIU registers near empty, consumers call a special
number and are issued a 20-digit combination that they then type
into the meter's keypad to renew their account.

The actual meter is in a sealed box, perched high outside on a
combination street light/power pole. If somebody tries to tamper
with the box, an alarm sounds inside the customer's house and at
EDC headquarters.

The new system charges rates higher than the current "social"
rate of VEB1,608 (US$0.74) per kWh for up to 200kWh.

"But that's still a lot cheaper than losing your TV or
refrigerator due to an unlawful connection to the grid," Mr.
Petterson said.

There are some 100,000 illegal connections in the Caracas
metropolitan area, or about one for every 10 of EDC's 1 million
customers.

Reducing unlawful connections is a priority for EDC as it loses
about 10% of the power it commercializes to electricity theft or
"black losses."

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


IBH: Venprecar-Orinoco Iron Merger Ratified
-------------------------------------------
International Briquettes Holding (IBH) announced that in an
Extraordinary Shareholders Meeting of Venprecar held on August
29, the merger between Venprecar and Orinoco Iron, which
recently became effective, was ratified.

Merged Venprecar and its subsidiary Orinoco Iron, S.C.S.
Sociedad en Comandita Simple is owned 67.75% by IBH. The total
installed capacity of merged Venprecar is 3.020.000 Metric Tons
per year, the world's largest hot briquetted iron producer.

Stand Still

The senior lenders of merged Venprecar (formerly Orinoco Iron)
agreed to a Stand Still Agreement on the funds owed subject to
certain covenants. Under this agreement the senior lenders will
continue to retain all rights related to the security of the
financing, but will permit Venprecar to keep resources necessary
for the normal development of operations including capital
expenditures. This stand still agreement will continue until a
financial restructuring agreement is reached, as long as the
conditions on the stand still are met.

Options

As a result of the Merger and the related transactions, certain
rights originally related to Orinoco Iron are now embodied in a
golden share of merged Venprecar. This golden share plus the 30%
of merged Venprecar, which is not owned by IBH, are indirectly
subject to a call option for the benefit of IBH and merged
Venprecar, and a put option for the benefit of the indirect
owners of such equity.

The exercise price of both the call and the put options will be
between US$34 million and US$80 million, depending on the date
of exercise.

Balance Sheet Impact

The balance sheet of IBH as of June 30, 2005 shows the situation
as if all of the above-described facts, including the
resolutions adopted on August 18 and the merger, would have
taken place as of the pro-forma date.

Among the effects on the balance, it is noted that the current
ratio improves from 0.63 to 1.05, and the total debt to equity
and minority interests ratio improves from 10.43 to 1.07.
International Briquettes Holding IBH consolidates the financial
results of Venprecar, Operaciones RDI, IBMS and Brifer. The work
force of these companies, as of June 30, 2005, was of 1,048
workers.

To view Balance Sheet:
http://bankrupt.com/misc/IBH.htm

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




                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
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Copyright 2005.  All rights reserved.  ISSN 1529-2746.

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