TCRLA_Public/050915.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 15, 2005, Vol. 6, Issue 183

                            Headlines


A R G E N T I N A

ACINDAR: Advances Tube Plant Sale Talks With Italy's Techint
AGUAS CORDOBESAS: Suez Likely to Exit Investment in Utility
COMERCIAL TUCUMAN: Deadline for Individual Reports Approaches
MULTIPLAST S.A.: Court Upgrades Bankruptcy to Reorganization
OROFARMA S.A.: General Report Due for Filing September 16

RUNESMAR ALIMENTICIA: Creditors' Claims Set for Filing
SAN JORGE: Report on Company's Reorganization to be Submitted
SANCAYET S.A.: September 16 Deadline for General Report
TELECOM ARGENTINA: Section 304 Petition Summary
TGS: Initiates San Martin Pipeline Expansion Project


B E R M U D A

ALEA GROUP: Considers Sale Options Following S&P Downgrade
GLOBAL CROSSING: Court Clears Microsoft, Softbank in Lawsuit
GOSHAWK INSURANCE: Reviews Bermuda Unit Following Rating Action


B R A Z I L

BEC: Privatization Scheduled for Thursday
CONSTRUTORA NORBERTO: Ratings Show Competitive Business Exposure
TELEMAR: Member of Board Resigns, Alternate Director Takes Post
VARIG: TAP Seeks to Pursue Alliance with Airline


C H I L E

COEUR D'ALENE: Secondary Share Offering Priced


C O L O M B I A

TELECOM: Comptroller to Reveal MOU Analysis This Week


J A M A I C A

KAISER ALUMINUM: Motion to Settle Claims Draws Fire


M E X I C O

ASARCO: Wants to Start Soil Remediation Under Everett Pact
ENRON: Wants To Disburse $13,573,088 from BV1 Escrow Fund
GRUPO TMM: TFM, Govt. Reach Settlement of VAT Lawsuit
GRUPO TMM: VAT Settlement Will Not Affect KCS Ratings


P A R A G U A Y

ACEPAR: Faces Strike from Scrap Producers


     - - - - - - - - - -


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

ACINDAR: Advances Tube Plant Sale Talks With Italy's Techint
------------------------------------------------------------
Negotiations over the sale of Argentine long steelmaker
Acindar's steel tube assets to two local units of Italian
steelmaker Techint are moving forward, according to Business
News Americas. Acindar signed a letter of intent in May to sell
its plant in Villa Constitucion to Siat and its tube and cold-
formed product plants in San Luis to Siderar for US$83.2
million. Siat and Siderar are both Techint units.

The deal awaits decision from the antitrust regulator, according
Acindar spokesperson Gustavo Pittaluga. If the regulator clears
the sale, "which we think will happen, then Siderar's deal will
go through," Pittaluga added.

Acindar, which is controlled by Brazilian mining-metals company
Belgo-Mineira, reported net profit of ARS153 million (US$52.4
million) in 1Q05, up 17% from US$45.1 million in 1Q04. The
Company exports 25% of its production, primarily to Bolivia,
Brazil, Chile, Peru and the US.

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


AGUAS CORDOBESAS: Suez Likely to Exit Investment in Utility
-----------------------------------------------------------
Water sector experts believe that French group Suez's decision
to withdraw from Buenos Aires water utility Aguas Argentinas
will affect the future of Cordoba water utility Aguas
Cordobesas, reports Business News Americas.

Some 39% of Aguas Cordobesas stock is owned by Suez. It would be
"unusual" if the French group decided to maintain its
investments in the Cordoba water utility if it has apparently
decided to abandon its operations in the country, said an
unnamed sector specialist.

Suez has yet to confirm officially its withdrawal from Aguas
Argentinas, but it has already announced that it will no longer
participate in another regional water utility - Aguas
Provinciales de Santa Fe - and Aguas Cordobesas would be the
last one remaining.

Aguas Cordobesas has been one of Suez's more positive
experiences in Argentina. There is no tension between the French
group and provincial authorities and its figures are relatively
good, with revenues of around ARS80 million (US$27.5mn)
annually.

If Suez does want to step back from the Cordoba utility, the
authorities would probably want to avoid a new concessions
process and would be looking for the shares to be sold directly
to another company. However, Cordoba governor Jose Manuel de la
Sota said recently that he would like the company to stay in the
province.


COMERCIAL TUCUMAN: Deadline for Individual Reports Approaches
-------------------------------------------------------------
The deadline for the submission of the general report on the
Comercial Tucuman S.R.L. bankruptcy case will be tomorrow, Sep.
16, 2005. The report shall contain the summary of the Company's
financial status as well as relevant events pertaining to the
bankruptcy.

On June 17, 2005, court-appointed trustee Isaac Jospe stopped
accepting creditors' claims against the Company. Out of the
verified claims, Mr. Jospe prepared individual reports and
submitted them on Aug. 5, 2005.

Comercial Tucuman S.R.L. began liquidating its assets
following the bankruptcy pronouncement issued by Court No. 24 of
Buenos Aires' civil and commercial tribunal.

The bankruptcy process will end with the sale of the Company's
assets. Proceeds from the sale will be used to repay its debts.

CONTACT: Mr. Isaac Jospe, Trustee
         Jose Evaristo Uriburu 1054
         Buenos Aires


MULTIPLAST S.A.: Court Upgrades Bankruptcy to Reorganization
------------------------------------------------------------
Multiplast S.A. will proceed with reorganization after a Buenos
Aires' civil and commercial Court No. 5 converted the Company's
ongoing bankruptcy case into a "concurso preventivo", states
Infobae. Under Insolvency protection, the Company will be able
to draft a proposal designed to settle its debts with creditors.
The reorganization also prevents an outright liquidation.

Ms. Monica Graciela Aquim, the court-appointed trustee, will
verify creditors' proofs of claim until Oct. 19, 2005. Creditors
with unverified claims cannot participate in the Company's
settlement plan.

Out of the verified claims, Ms. Aquim will prepare individual
reports to be presented in court for approval on Dec. 1, 2005.
The trustee will also submit the general report on the Company's
insolvency case on Feb. 14, 2006.

An informative assembly is set for Aug. 3, 2006.

Clerk No. 9 assists the court on the proceedings.

CONTACT: Ms. Monica Graciela Aquim, Trustee
         Uruguay 662
         Buenos Aires

          
OROFARMA S.A.: General Report Due for Filing September 16
---------------------------------------------------------
Court-appointed trustee Ulderico Luis Laudren will submit the
general report on the liquidation of Buenos Aires-based Orofarma
S.A. tomorrow, Sep. 16, 2005. Mr. Laudren will include in the
report the summary of the Company's financial status as well as
relevant events pertaining to the bankruptcy.

Orofarma S.A. began liquidating its assets following the
"Quiebra Decretda" pronouncement issued by Court No. 3 of the
city's civil and commercial tribunal.

The ruling placed the Company under the supervision of the
trustee, who verified creditors' proofs of claim until June 8,
2005. The validated claims were presented in court as individual
reports on Aug. 4, 2005.

The bankruptcy process will end with the sale of the Company's
assets. The proceeds of the sale will be used to repay the
Company's debts.

CONTACT: Orofarma S.A.  
         San Jose de Calasanz 114
         Buenos Aires

         Mr. Ulderico Luis Laudren, Trustee
         Libertad 293
         Buenos Aires


RUNESMAR ALIMENTICIA: Creditors' Claims Set for Filing
------------------------------------------------------
The individual claims of creditors against bankrupt company
Runesmar Alimenticia S.R.L. will be presented as individual
reports in court for approval tomorrow, Sep. 16, 2005. The
reports are based on the forwarded claims verified on Aug. 4,
2005 by Ms. Ana Maria Calzada Percivale, the trustee selected by
the court.

On Oct. 31, 2005, Ms. Percivale will submit the general report
on the Company's liquidation. Court No. 21 of Buenos Aires'
civil and commercial tribunal declared the Runesmar Alimenticia
S.R.L. bankrupt after the Company defaulted on its debt
payments.

The city's Clerk No. 41 assists the court on this case.

CONTACT: Runesmar Alimenticia S.R.L.
         Avda Corrientes 1965
         Capital Federal
  
         Ms. Ana Maria Calzada Percivale, Trustee
         Sarmiento 2437
         Buenos Aires


SAN JORGE: Report on Company's Reorganization to be Submitted
-------------------------------------------------------------
The general report, which contains the summary of events
relevant to the San Jorge S.A. insolvency as well as an audit of
the Company's accounting and business records, will be submitted
tomorrow, Sep. 16, 2005.

Court No. 21 of La Plata's civil and commercial tribunal issued
a resolution opening the reorganization of San Jorge S.A. and
appointed Ms. Cecilia Laura Phillips to serve as trustee during
the course of the reorganization.

Ms. Phillips validated creditors' proofs of claim until May 20,
2005 and presented them as individual reports in court on July
8, 2005.

The Company will present the completed settlement proposal to
its creditors during the informative assembly scheduled on
Oct. 17, 2005.

CONTACT: Ms. Cecilia Laura Phillips, Trustee
         Calle 41 Nro. 578
         La Plata



SANCAYET S.A.: September 16 Deadline for General Report
-------------------------------------------------------
The general report on the bankruptcy of Buenos Aires-based
Sancayet S.A. will be presented in court tomorrow, Sep. 16,
2005. On Aug. 5, 2005, the reports on the individual claims of
the Company's creditors were presented in court. The claims
underwent verification phase, which lasted until June 17, 2005.

Court No. 24 of the city's civil and commercial tribunal
declared Sancayet S.A. bankrupt after the Company defaulted on
its debt payments. The bankruptcy order effectively placed the
Company's affairs as well as its assets under the control of
court-appointed trustee Ernesto Carlos Borzone.

Clerk No. 47 assists the court on this case
that will close with the sale of the Company's assets.

CONTACT: Mr. Ernesto Carlos Borzone, Trustee
         Cuenca 1464
         Buenos Aires


TELECOM ARGENTINA: Section 304 Petition Summary
-----------------------------------------------
Petitioner: Board of Directors of Telecom Argentina S.A.
            Foreign Representative

Debtor: Telecom Argentina S.A.
        Alicia Moreau de Justo 50
        Buenos Aires, Argentina
        c/o Davis Polk & Wardwell
        450 Lexington Avenue
        New York, New York 10017

Case No.: 05-17811

Type of Business: Telecom Argentina S.A. provides public
                  telecommunications services in Argentina, in
                  particular, fixed-line local, national and
                  international long distance services, data
                  transmission and access to Internet service.
                  It also provides mobile telecommunications
                  services in Argentina and Paraguay through its
                  subsidiaries.  

                  Telecom Argentina obtained confirmation from
                  The Argentine Court of an Acuerdo Preventivo
                  Extrajudicial -- an out-of-court agreement
                  between Telecom Argentina and its financial
                  creditors.  The Agreement restructured its
                  outstanding unsecured financial debt composed
                  of loans and medium-term notes.  Under the
                  APE,  Telecom Argentina paid the Old Notes and
                  substantially all of the Old Debt was
                  extinguished on Aug. 31, 2005.
  
                  U.S. Bank N.A. as the Indenture Trustee for
                  the Old Notes refused to cancel those Notes
                  held by creditors, including The Argo Fund
                  Limited that holds US$30 million.  They did
                  not consent to the cancellation of the Old
                  Debt.

                  This ancillary proceeding is filed because
                  Argentina Telecom is concerned that Argo will
                  attempt to exhort a greater recovery on its
                  Old Notes than was recovered by the other
                  creditors.

Section 304 Petition Date: September 13, 2005

U.S. Bankruptcy Court: Southern District of New York (Manhattan)

Argentine Court: The National Commercial Court No. 19,
                 Secretary No. 38

U.S. Judge: Burton R. Lifland

Petitioner's Counsel: Willow D. Crystal, Esq.
                      Karen E. Wagner, Esq.
                      Trisha Lawson, Esq.
                      Davis Polk & Wardwell
                      450 Lexington Avenue
                      New York, New York 10017
                      Tel: (212) 450-4021
                      Fax: (212) 450-3021

(Troubled Company Reporter, Sep. 7, 2005, Vol. 6, Issue 177)


TGS: Initiates San Martin Pipeline Expansion Project
----------------------------------------------------
Argentine gas transporter TGS has started the operations of its
San Martin natural gas pipeline expansion in southern Argentina,
Business News Americas reports. The 2.9 million cubic meter a
day (Mm3/d) pipeline expansion started operations on August 26
following the completition of the last stretch between Bahia
Blanca and the Greater Buenos Aires area.

The 296km, 30-inch diameter San Martin pipeline and the
connecting 160km, 36-inch diameter Neuba II pipeline were
expanded to allow the transport of an additional 2.9Mm3/d of gas
to the province of Buenos Aires.

The expansion cost about US$285 million. TGS, which is
controlled by Brazil's federal energy company Petrobras, loaned
US$142 million from Brazil's national development bank BNDES.

The contract for the expansion was awarded to a consortium
headed by local construction company Techint in March this year.

Techint worked with Swedish engineering firm Skanska, local
company Contreras Hermanos and Brazil's Odebrecht.

It took some 2,500 workers to finish the expansion in just five
months.

"It has been a project realized in a very short time, even
faster than our best predictions and it is already allowing
almost 3Mm3/d more capacity in southern Argentina," energy
secretary Daniel Cameron said.



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

ALEA GROUP: Considers Sale Options Following S&P Downgrade
----------------------------------------------------------
London-listed, Bermuda-registered reinsurer Alea Group Holdings
(Bermuda) Ltd. said it was considering putting itself up for
sale after Standard & Poor's Ratings Services cut its all-
important "A" category rating to "BBB+" and said the outlook on
the rating remained negative.

Alea was planning a US$210-million rights issue to shore up its
capital but the downgrade, sparked by the Company's poor interim
results and the disappointing operating trend, could make
capital increase difficult for the Company.

"Right now, due to the downgrade happening so recently, the
board and the management team are reviewing all strategic
options for the company," Mark Ricciardelli, chief executive of
Alea, said Friday.

"The management and board will continue to communicate with its
employees, customers and shareholders. The management team has
been and will continue to address the issues that the company
may have," Mr. Ricciardelli added.

S&P said Alea's poor operating performance and disappointing
first half results are largely to blame for the downgrade.

Alea posted a US$25.9-million profit for the first half of 2005,
a 47% decrease on the same period last year. The decrease was
partly caused by a US$34.7-million charge to boost its reserves.
This also hit its combined ratio, which jumped to 101.9%
compared with 95.8% the same period last year.

Analysts said S&P's move could spark a spiral of decline at the
Company. Once a reinsurer hits a rating in BBB territory, it
becomes increasingly difficult for it to underwrite business
because primary insurers cannot afford to take on the default
risk.

CONTACT:  Media: Keith Anderson
          +1 860 258 6550

          Analysts & Investors: Peter Brown
          +44 20 7621 3383

          Financial Dynamics: Robert Bailhache
          +44 20 7269 7200

          http://www.aleagroup.com


GLOBAL CROSSING: Court Clears Microsoft, Softbank in Lawsuit
------------------------------------------------------------
Bloomberg News reports that Judge Gerard E. Lynch of the United
States District Court for the Southern District of New York
dismissed claims against Microsoft Corporation and Softbank
Corporation in a class action commenced by investors in Global
Crossing Ltd.

The lawsuit alleged that Microsoft and Softbank, whose
executives sat on the boards of GX and Asia Global Crossing,
Ltd., helped defraud investors and should, therefore, be held
liable.

Microsoft and Softbank each owned 15.8% of AGX's common stock
following AGX's initial public offering in November 2000.
Pursuant to a shareholder agreement, Microsoft and Softbank had
the right to appoint one or more directors to AGX's board.

"Plaintiffs' claims ultimately rest on a few bare facts and a
number of legally unjustified presumptions," Judge Lynch held.

Judge Lynch said Microsoft's and Softbank's representatives
acted on behalf of all AGX shareholders as board members, not
within the scope of their employment with Microsoft and
Softbank.

The investors, however, may receive permission to file a new
complaint against Softbank with "important" new details.

Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
at http://www.globalcrossing.comprovides telecommunications  
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major
cities around the globe. Global Crossing serves many of the
world's largest corporations, providing a full range of managed
data and voice products and services. The Company filed for
chapter 11 protection on January 28, 2002 (Bankr. S.D.N.Y. Case
No. 02-40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on December 9, 2003.

At June 30, 2005, Global Crossing's total liabilities exceed its
total assets by $71 million. (Troubled Company Reporter, Sep.
13, 2005, Vol. 9, No. 217)


GOSHAWK INSURANCE: Reviews Bermuda Unit Following Rating Action
---------------------------------------------------------------
The Board of Goshawk Insurance Holdings plc has noted the
announcement made by rating agency A.M. Best regarding the
financial strength of Rosemont Reinsurance Ltd., its Bermuda-
based operating subsidiary.

The Board continually assesses the capital resources of the
Company against its risk profile and the reinsurance market
cycle.  The Board is engaged in capital raising initiatives with
the aim of taking advantage of the beneficial premium rating
environment that will follow as a result of Hurricane Katrina.
Management will meet with A.M. Best shortly to discuss these
initiatives.

The Company intends to announce its interim results on 15
September 2005.  Rosemont Reinsurance writes property and marine
reinsurance business in the industrialized world.

                            *   *   *

On September 8, A.M. Best Co. placed the financial strength
ratings of A- (Excellent) and the issuer credit ratings (ICR) of
"a-" of Rosemont Reinsurance Ltd. under review with negative
implications.  These rating actions follow the recent
announcements by Rosemont that net losses attributable to
Hurricane Katrina are projected to be in the US$25 million to
US$30 million range and that marine energy losses for Hurricane
Ivan had deteriorated during the second quarter of 2005. A.M
Best is concerned that the combination of these events, in
addition to negatively affecting Rosemont's operating profit
projections for 2005, will also negatively affect Rosemont's
prospective risk-based capital in light of its property
catastrophe business profile.

The ratings will remain under review pending discussions with
Rosemont's management and re-evaluation of the capital
requirements necessary to support the company's current rating.
A.M. Best expects to commence discussions with Rosemont's
management and conclude its analysis in the short term.
(Troubled Company Reporter - Europe, Sep. 14, 2005, Vol. 6,
Issue 182)

CONTACT:  GOSHAWK INSURANCE HOLDINGS PLC
          Phone: 020 7661 9374 (London)
                 +1 441 295 5485 (Bermuda)
          Paul Spencer, Chairman
          Russell Brooke, Chief Executive
          Jonathan Beck, Finance Director

          COLLEGE HILL
          Phone: 020 7457 2020
          Tony Friend
          Roddy Watt



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

BEC: Privatization Scheduled for Thursday
-----------------------------------------
The Brazilian Stock Exchange (Bovespa) will hold today, Sep. 15,
the privatization auction of BEC, the state government bank of
Ceara, reports Dow Jones Newswires. The minimum price is
BRL542.7 million ($1=BRL2.319).

The Brazilian Clearing and Depository Corporation (CBLC) has
already pre-qualified the country's three largest private-sector
banks, Bradesco (BBD), Itau (ITU) and Unibanco (UBB), as well as
GE Capital, to compete in BEC's privatization.

BEC operates 70 branches and has 278,000 customers. The bank has
deposited assets of BRL1.6 billion and posted a profit of
BRL65.8 million in 2004, according to BEC's latest financial
data.


CONSTRUTORA NORBERTO: Ratings Show Competitive Business Exposure
----------------------------------------------------------------
Corporate Credit Rating:  BB-/Stable/--

Major Rating Factors

Strengths:
    - Balanced project mix in high-margin/volatile and low-
      margin/developed countries
    - Diversified private works backlog in terms of geographies
      and projects
    - Competent control and risk management and conservative
      bidding policy, avoiding hard bids
    - Improving financial profile, with strong near-term
      liquidity

Weaknesses:
    - Intrinsic exposure to the volatile and cyclical heavy
      engineering and construction (E&C) business
    - Somewhat short backlog (two years)
    - Exposure to cost overruns with predominant fixed-price
      backlog
    - Some exposure (though declining) to project prefunding
      conditions with Brazilian government entities
    - Relatively leveraged financial profile

Rationale

The ratings on CNO reflect the company's exposure to the
competitive, volatile, and cyclical heavy E&C business, some
backlog concentration in public works in economically and
politically volatile countries (a risk partly offset by the fact
that projects are pre-financed and on an advanced-payment
basis), and a somewhat leveraged financial profile (in the
context of the more volatile economic environment of CNO's home
country, Brazil). These risks are somewhat offset by CNO's long-
standing experience in the E&C business, the quality and sector
and geographic diversification of its backlog (a positive that
has been sustained over time), and consistent profitability and
cash-flow protection measures within the past few years as a
result of significant efforts to focus on more profitable
projects.

CNO is the largest heavy construction company in Brazil, with
net sales and EBITDA of $2.3 billion and $165 million in the 12
months ended June 30, 2005. The company reported a total debt
balance of $499.2 million on the same date.

CNO's business profile is fair and supported by diversification,
both geographically and in terms of clients, industries, and
projects. While somewhat dependent on funding sources provided
by export incentive programs in Brazil, the company has been
making efforts to diversify funding sources, balancing Brazilian
government funds with multilateral agencies, private sources,
and direct exposure to industrial clients or cash-rich, state-
owned companies. Similarly, CNO's direct exposure to
governmental entities in Brazil is relatively small and further
mitigated by predefined project funding from multilateral
agencies or private banks (usually having advanced payments).
Nevertheless, access to Brazilian government funding is still a
competitive factor to bid on more politically or economically
volatile countries in South America and Africa; apart from that,
CNO also directly absorbs part of the risks associated with the
operating environment in these countries.

The company won very relevant projects through the first six
months of 2005 and, as a result, its backlog is split as of June
30, 2005, between 44% in Brazil (the largest individual market,
boosted by new works and the appreciation of the Brazilian
currency) and 56% abroad (with relevant projects in both more
volatile countries such as Venezuela, Angola, and Dominican
Republic, and more stable economies such as the U.S., Mexico,
and Portugal). CNO has been strategically increasing its
position in more stable economies that, although granting lower
margins, reduce the volatility of its revenue base. Portugal,
the U.S., and Mexico account already for approximately 22% of
its backlog as of June 2005 (40% of the international backlog).
Technical expertise, high liquidity, and market intelligence for
competitively bid works have been important factors for CNO to
sustain a quite stable quality backlog. As of June 30, 2005, the
company reports a backlog of $4.0 billion (having floated
between $2.5 billion and $3.5 billion in the past several years,
but improved with awards in second-quarter 2005), equivalent to
slightly less than two years of production at the June 2005
pace. CNO's backlog does not incorporate two important projects
in Peru that may also develop positively in the medium term as
funding sources are found.

With production at lower-margin but more stable economies
growing in relevance, CNO's EBITDA margin reached 7.2% in the 12
months ended June 30, 2005, compared with 7.4% in the same
period of last year. In absolute terms, however, CNO has
reported continuing EBITDA expansion, with $165 million in the
12 months ended June 2005, comparing with $136 million in the
same period of 2004. The company's cash flow is partly improved,
with pro-rata consolidation of its stake in the Catoca diamond
mine in Angola.

Capital structure improvements have been noticeable
(particularly after the repayment of a $100 million bond in
March 2005) and should continue developing positively in second-
half 2005 with the forthcoming issuance of perpetual notes.
Standard & Poor's Ratings Services expects the proceeds of this
issuance to be used to prepay existing, more expensive debt,
contributing to CNO's efforts to extend debt duration and
sustain liquidity. Credit measures continued to strengthen in
first-half 2005, leading total debt-to-EBITDA, funds from
operations (FFO)-to-total debt, and total debt-to-capitalization
ratios to reach 3.0x, 29.0%, and 42.5%, respectively in the 12
months ended June 30, 2005 (from 4.2x, 18.7%, and 50.6% in
December 2004). EBITDA interest coverage has been traditionally
affected by high interest expenses, at 2.8x in June 2005 (2.2x
in December 2004), but is also gradually improving. We believe
that the overall positive financial trend will continue
throughout 2005 and 2006, leading to target ratios of total debt
to EBITDA below 3.0x, FFO to total debt above 30%, and EBITDA
interest coverage above 2.5x in the near future.

Liquidity

CNO's liquidity remained adequate after the repayment of its
$100 million eurobond, and is now reinforced by a $100 million
stand-by committed credit facility abroad that is fully
available and mitigates refinancing risks in 2006, a
presidential election year in Brazil. CNO reports short-term
maturities of $90.7 million during the next 12 months through
June 2006 (including required prepayments of the IFC A/B/C loan
with certain collected receivables in the amount of $25
million), and $17.4 million during the rest of 2006. While we
are cautious when assessing actual liquidity available for E&C
companies given the high level of client advances and high
working capital requirements from projects (which may also
fluctuate widely depending on the production pace), we still
believe that CNO's cash reserves of $439 million in June 2005
provide an additional liquidity cushion to face debt maturities
in the medium term. With client advances and fine-tuned
operations, we do not believe CNO will face substantial working
capital pressures in the medium term due to its rising
production activity and larger backlog. As expected, free
operating cash flow (FOCF) strengthened through June 2005 and is
expected to continue expanding in the seasonal cash flow peak
during the second half of the year.

Outlook

The stable outlook for the local currency rating reflects our
expectations that CNO's financial ratios will continue improving
through 2005 with further debt reduction, allowing for credit
measures to comfortably fall into its current rating category.
Reducing refinancing risks thanks to debt repayment and the
stand-by committed credit facility that goes over 2006 are also
short-term positives. We foresee positive trends for CNO's
operating performance in 2005 and 2006, with the recovery of
Brazilian projects, stable margins at its traditional markets in
South America and Angola, and increasing activity in the U.S.,
Portugal, and Mexico. Nevertheless, a positive revision of the
ratings would depend on significant improvement on credit
measures, essentially with an overall lower debt position
relative to long-term cash flows. A reversal in trends would be
first signaled by a deterioration in backlog; harsher changes in
profitability trends and cash generation would also be reasons
for a negative ratings revision. The stable outlook for the
foreign currency rating reflects that on the foreign currency
sovereign rating on the Federative Republic of Brazil.

Primary Credit Analyst: Reginaldo Takara, Sao Paulo (55) 11-
5501-8932; reginaldo_takara@standardandpoors.com

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


TELEMAR: Member of Board Resigns, Alternate Director Takes Post
---------------------------------------------------------------
Tele Norte Leste Participacoes S.A. (NYSE: TNE), following its
August 31, 2005 Board of Directors meeting, announced that the
Company received on July 21, 2005 a letter of resignation from
Mr. Joao Carlos do Couto Ramos Cavalcanti, member of the Board
of Directors. On July 27, 2005, during its monthly ordinary
meeting, the Board of Directors registered the resignation and
approved the automatic assumption of the post by the alternate
director, Mr. Valter Manfredi Souza. As a consequence, Mr.
Luciano Siani Pires was appointed to serve as the alternate to
Mr. Valter Manfredi Souza on TNL's Board of Directors.

Then, on August 9, 2005, the Company received a letter of
resignation from Mr. Valter Manfredi Souza. On August 31, 2005,
during its monthly ordinary meeting, the Board of Directors
registered the resignation and appointed the alternate director,
Mr. Luciano Siani Pires as director. As a consequence, Mr.
Marcos Barbosa Pinto was appointed to serve as the alternate to
Mr. Luciano Siani Pires on TNL's Board of Directors.

Luciano Siani Pires

He holds a bachelor's degree in mechanical engineering from
Pontificia Universidade Catolica of Rio de Janeiro (1991) and an
MBA from Stern School of Business - New York University (2001).
In 1992, he joined the BNDES, where he was Head of the Export
Operations Department. From 2003 to 2005, he worked for McKinsey
Consulting. Since May 2005, he has held the position of Head of
the Securities Portfolio Management Department with BNDES.

Marcos Barbosa Pinto

He has held a similar position with the Telemar Participacoes'
board of Directors since April 14, 2005. He received a law
degree from Universidade do Sao Paulo and masters in law from
Yale University. Currently, he has been working with BNDES as an
advisor to the BNDES Vice President. He also works as a Private-
Public Partnership Manager - PPP's with BNDES and is member of
the PPP's Technical Commission on Federal Governance.

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


VARIG: TAP Seeks to Pursue Alliance with Airline
------------------------------------------------
TAP Air Portugal reaffirmed its interest in forming a deal with
Brazilian flagship carrier Varig after the latter presented its
restructuring plan, reports Dow Jones Newswires. TAP first
expressed interest months ago in taking a 20% stake in debt-
laden Varig, but backed out after the Brazilian carrier's
controlling shareholder balked at ceding control.

On Monday, however, Varig presented to a Rio de Janeiro court a
reorganization plan, under which the Ruben Berta Foundation will
reduce its 56% controlling stake to a minority position.

TAP spokesman Antonio Monteiro said TAP will now examine Varig's
restructuring plan before deciding how or when the companies
might develop a deal.

The two airlines already have a code-sharing deal on some trans-
Atlantic flights, and analysts have said they could both cut
costs by eliminating overlapping routes.



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

COEUR D'ALENE: Secondary Share Offering Priced
----------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE, TSX: CDM), the
world's largest primary silver producer, announced Tuesday that
it has priced the sale of 9,863,014 shares of its common stock
pursuant to an existing shelf registration as filed with the
U.S. Securities and Exchange Commission, resulting in net
proceeds of $36 million, before offering expenses.

The company intends to use the net proceeds of the offering to
fund its previously announced purchase from Perilya Limited
(ASX: PEM) of the silver contained at the Broken Hill Mine in
Australia.

Deutsche Bank Securities Inc. acted as sole bookrunning manager
for the stock sale.

This communication shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state in which the offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of that state. Copies of the final
prospectus supplement and the accompanying prospectus may be
obtained from the offices of Deutsche Bank Securities, Inc, New
York, NY, 10005, Attention Syndicate Department.

Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile, Bolivia and Australia

CONTACT: Coeur d'Alene Mines Corporation
         Scott Lamb
         VP, Investor Relations
         Phone: 1-208-665-0777



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

TELECOM: Comptroller to Reveal MOU Analysis This Week
-----------------------------------------------------
Colombia's comptroller general Antonio Hernandez expects to
publish within the week revisions in the memorandum of
understanding (MOU) signed last month by Mexico's Telmex (NYSE:
TMX) and state-run operator Colombia Telecomunicaciones
(Telecom). On Aug. 26, Telmex, controlled by billionaire Carlos
Slim, and the Colombian government announced a deal, under which
Telmex would purchase 50% plus one share of Telecom in a deal
worth US$350 million.

Telmex and the Government were scheduled to confirm the MOU on
Sep. 2. But the parties delayed the signing pending analysis on
the deal by the comptroller general, who questioned the legality
of the proposal since the process to find a partner for Telecom
should have followed a public bidding model that allowed other
interested parties to participate.

Local daily Portafolio suggests that Hernandez has already
considered several modifications to the MOU.

The first of these changes is related to the bidding process and
the need to establish a specific procedure for companies to
present their proposals to become Telecom's partner, with a
determined timeline.

The current process establishes that if a third party interested
in becoming Telecom's partner is able to present a proposal
better than Telmex's, Telmex can equal the offer but the third
party is not allowed to increase its offer a second time.

Spain's Telefonica (NYSE: TEF) is reportedly one of the parties
interested in participating in the process. Executives from
Telefonica's Peruvian unit have already held talks with Telecom
and the government considers TEF's proposal "a fact," according
to a Portafolio report.



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

KAISER ALUMINUM: Motion to Settle Claims Draws Fire
---------------------------------------------------
As previously reported in the Troubled Company Reporter on
August 30, 2005, Kaiser Aluminum Corporation and its debtor-
affiliates ask the U.S. Bankruptcy Court for the District of
Delaware to approve the Underwriters Settlement Agreement
pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure.

In September 1988, Kaiser Aluminum & Chemical Corporation
instituted an insurance coverage action against certain of the
underwriters and members at Lloyd's London, styled "Kaiser
Aluminum & Chemical Corp. v. Mended & Mount, et al.," Case No.
897055, in the Superior Court of California for the Country of
San Francisco.

The coverage at issue in the Ships Coverage Action spans from
1945 to 1959 and involved 14 policies.  In the Ships Coverage
Action, KACC sought a declaratory judgment that certain
Underwriters are obliged to cover asbestos-related bodily injury
claims asserted against KACC relating to ships built by, or
shipyards owned and operated by, KACC.

Following extensive discussions, KACC and Underwriters have
reached a settlement resolving all claims against Underwriters
with respect to the subject policies, including coverage for
Channeled Personal Injury Claims pursuant to the Debtors' Plan
of Reorganization, as well as other present and future
liabilities, except for certain potential future claims under
Aviation Products Policies.

The salient terms of the Underwriters Settlement Agreement are:

   (1) Underwriters will pay $137 million into a settlement
       account, which will be established pursuant to a
       Settlement Account Agreement.

   (2) On the trigger date, the Settlement Fund will be
       transferred to the Insurance Escrow Account established
       pursuant to the Court's December 29, 2004, Order.  Upon
       the transfer of the Settlement Fund to the Insurance
       Escrow Account, legal and equitable title to the
       Settlement Fund will pass irrevocably to the Insurance
       Escrow Agent to be distributed pursuant to the Plan.

   (3) KACC will release all of its rights under the Subject
       Policies and to dismiss Underwriters from the
       Products Coverage Action, the Premise Coverage Action,
       and the Ships Coverage Action.

   (4) The Settlement Agreement encompasses all claims that
       might be covered by the Subject Policies and constitutes
       a policy buy-out of Underwriters respective participation
       shares in those policies, except for the Aviation
       Products Policies as to which KACC retains certain
       rights.

   (5) The Settlement Agreement contains certain rights of
       termination, including if Asbestos Legislation were to be
       enacted into law by December 31, 2005.

                           Objections

(1) Certain Insurers

Frederick B. Rosner, Esq., at Jaspan Schlesinger Hoffman LLP, in
Wilmington, Delaware, relates that certain insurers and certain
underwriters and members at Lloyd's, London, issued insurance
policies that cover occurrences based on exposure to asbestos
and other losses, to Kaiser Aluminum & Chemical Corporation.

The insurers include:

   * AIU Insurance Company;

   * Granite State Insurance Company;

   * Insurance Company of the State of Pennsylvania;

   * Landmark Insurance Company;

   * Lexington Insurance Company;

   * National Union Fire Insurance Company of Pittsburgh,
     Pennsylvania; and

   * New Hampshire Insurance Company.

"Because asbestos claims involve delayed manifestation claims,
insurance coverage for a single loss may be triggered under
multiple years of liability policies," Mr. Rosner tells the
Court. "Thus, courts have had to determine how [that] coverage
may be allocated among triggered policies."  

Mr. Rosner explains that different jurisdictions have adopted
different approaches to the allocation issue. Under the "all
sums" approach, each triggered policy may in theory be liable
for the entire loss associated with a claim, with the insurers
relegated to bringing claims among themselves for contribution.

In contrast, under pro rata allocation, each insurer is liable
only for its proportionate share of the total liability, Mr.
Rosner points out.

Mr. Rosner notes that the California Superior Court, in its
Decision on Group IIA Trial Issues in the Coverage Litigation,
adopted an "all sums" methodology with regard to the policies at
issue.  The California Superior Court concluded that "[t]he 'all
sums' and functionally equivalent language in the policies
renders each insurer responsible to cover all liabilities up to
policy limits incurred by the insured once the policy is
triggered, regardless of whether [those] liabilities developed
during the policy period."

However, under "Armstrong World Industries v. Aetna Cas. and
Surety (1998)," if "all sums" is applied, the Insurers will in
certain circumstances have the right to assert contribution and
indemnity claims against the London Underwriters, Mr. Rosner
says.

Pursuant to the Settlement Agreement, a mandatory Channeling
Injunction is to be issued by the Court to prevent the Insurers
from asserting contribution or indemnity claims against the
London Underwriters.

However, Mr. Rosner emphasizes that the Settlement Agreement
also contractually provides that Kaiser and its successors will
in certain instances "voluntarily reduce" recoveries they may
obtain against other insurers to the extent those insurers also
may recover indemnity or contribution from the London
Underwriters.

"These provisions are neither equal nor balanced, however,
because the provision against Certain Insurers is to be a
comprehensive order of [the] Court, while the provision for
voluntary reduction that protects insurers appears to be limited
and only a contractual commitment between parties," Mr. Rosner
says.

Accordingly, the Insurers seek adequate protection of their
rights to recover by judgment reduction the indubitable
equivalent of their contribution and indemnity claims against
the London Underwriters.

Mr. Rosner avers that the right to assert claims is an
"interest" in the London Underwriters policies.  Section 363(e)
of the Bankruptcy Code requires that at any time, on request of
an entity that has an interest in property used, sold, or
leased, or as proposed by the trustee, the court -- with or
without hearing -- will prohibit of condition each use, sale or
lease as in necessary to provide adequate protection of that
interest.

The Insurers ask the Court that the order approving the
Settlement Agreement should include an "adequate protection"
provision to carry out the Section 363(e) requirement.

In addition to the Section 363(e) mandate, the Court may not
otherwise prejudice insurers' rights.

Mr. Rosner contends that the exclusion of an additional
"adequate protection" provision in the Settlement Order will:

   (a) result in an unlawful expansion and creation of greater
       rights in KACC's prepetition insurance contracts; and

   (b) create an unconstitutional taking of the Insurers' claims
       for indemnification and contribution against the London
       Underwriters.

Allstate Insurance Company, solely as successor-in-interest to
Northbrook Excess and Surplus Insurance Company, supports the
Insurers' arguments.

(2) Hartford, et al.

First State Insurance Company, Hartford Accident and Indemnity
Company, New England Reinsurance Corporation, and Nutmeg
Insurance Company object to the proposed Settlement Agreement to
the extent that it seeks relief affecting Hartford's rights or
obligations under insurance policies Hartford issued to certain
Debtors, or its rights and obligations at equity.

Joanne Wills, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, in Wilmington, Delaware, notes that "the right of
one carrier to seek contribution against another carrier for
amounts properly allocable to the latter either by contract or
in equity is well established."

Ms. Wills says the Settlement Agreement acknowledges that
entities like Hartford could in the future assert "contribution,
subrogation, indemnification or similar claims" against the
London Underwriters.

Under the Settlement Agreement, in the event Kaiser Aluminum
Corporation, the Reorganized KAC, or the Funding Vehicle Trust
becomes entitled receive a payment from insurers other than the
London Underwriters, and if those other insurers obtain a final
judgment against the London Underwriters resolving those
insurers' claims for contribution, then the parties will
voluntarily reduce the payment amount from any other insurers by
an amount to the extent necessary to reduce that judgment.

Moreover, Ms. Wills maintains, contribution and similar claims
against London would be deemed "indirect Channeled Personal
Injury Claims" and would be channeled to a trust established by
the Debtors' joint plan of reorganization.

Ms. Wills asserts that, in the event that its contribution or
similar claims against the London Underwriters are channeled
under the Plan, Hartford will have a set-off right against any
amounts Hartford otherwise is obligated to pay under the
Hartford Policies, which is equal to its contribution or similar
claims against London that are channeled to a trust under the
Plan.

While acknowledging the future prospect of contribution or other
similar claims, the contractual commitments in the Settlement
Agreement are not sufficient to protect Hartford's rights, Ms.
Wills argues.  Hence, any order approving the Settlement
Agreement should expressly set forth that the Agreement will not
affect Hartford's rights and obligations under its insurance
policies, including any future allocation disputes between the
London Underwriters and other insurers that would otherwise and
properly be resolved in coverage litigation outside the
bankruptcy proceeding.

Furthermore, consistent with the contractual undertakings in the
Settlement Agreement, any order should expressly provide that
Hartford's liability under the Hartford Policies would be
reduced by any amounts Hartford would have been entitled to
recover from the London Underwriters under contribution or
similar theories.

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. 78; Bankruptcy
Creditors' Service, Inc., 215/945-7000)



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

ASARCO: Wants to Start Soil Remediation Under Everett Pact
----------------------------------------------------------
ASARCO, LLC, seeks authority from the U.S. Bankruptcy Court for
the Southern District of Texas to enter into an Agreement for
Acceptance of Soil with the Everett Housing Authority. James R.
Prince, Esq., at Baker Botts, LLP, in Dallas, Texas, recounts
that ASARCO was scheduled to perform remediation of certain
residential yards and adjoining rights-of-way in Everett,
Washington, in 2005, but is unable to do so as a result of its
bankruptcy filing.

The EHA wants to hire contractors and subcontractors to complete
the remediation work.  Completing the remediation work of the
yards will result in the removal of soil from the yards and
placement of the soil at the site of the former ASARCO smelter
in Tacoma, Washington.  ASARCO owns the Site.

ASARCO is willing to accept the soil at the Site under the terms
set forth in the Agreement.  ASARCO agrees to accept, at no cost
to the EHA except as specifically provided for in the Agreement,
soil at the Site, estimated to total approximately 30,000 cubic
yards, generated by the EHA's contractor in 2005 in the course
of completing the remediation work.

Mr. Prince tells the Court that the Site on which the
contaminated soil will be deposited already contains
contaminated soil, because of ASARCO's prepetition remediation
work.  While the Agreement will increase the amount of soil that
ASARCO needs to address on its own property, the Agreement will
not change the remedy that ASARCO will utilize regarding the
property.  That remedy will be designed to cap and contain the
contaminated soil.

The EHA and its contractors will be solely responsible for:

   (i) changes to an approved plan for transporting soil to the
       Site;

  (ii) paying the cost of transporting soil to the Site;

(iii) providing the equipment necessary for transport; and

  (iv) complying with all laws and regulations applicable to the
       transport.

The EHA will coordinate with the City of Tacoma and the Town of
Ruston to re-initiate transportation of soil to the Site and to
maintain or modify the approved Transportation Plan.

The EHA agrees that any personnel entering the Site to implement
the Agreement will comply with all of ASARCO's environmental,
health and safety policies.  Moreover, the EHA will indemnify
and defend ASARCO against all claims it may sustain, arising
from the EHA's performance under the Agreement.

The Environmental Protection Agency and the State of Washington
have approved the transfer of soil from the residential
properties in Everett to the Site.

A full-text copy of the Agreement for Acceptance of Soil and the
Transportation Plan is available at no charge at:

            http://bankrupt.com/misc/EHAagreement.pdf

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

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-
20521 thru 05-20525).  They are Lac d'Amiante Du Quebec Ltee,
CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake
Asbestos Of Quebec, Ltd., and LAQ Canada, Ltd.  Details about
their asbestos-driven chapter 11 filings have appeared in the
Troubled Company Reporter since Apr. 18, 2005.  ASARCO has asked
that the five subsidiary cases be jointly administered with its
chapter 11 case. (ASARCO Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ENRON: Wants To Disburse $13,573,088 from BV1 Escrow Fund
---------------------------------------------------------
As reported on May 30, 2002, the U.S. Bankruptcy Court for the
Southern District of New York approved the sale of certain
assets of Enron Capital & Trade Resources Mexico Holdings B.V.,
a wholly owned non-Debtor subsidiary of Enron North America
Corp., to Tractebel S.A.  The Court also granted the assumption
and assignment of agreements related to a cogeneration facility
located in Nuevo Leon, Mexico, by BV1 and Operational Energy
Corp.

At the Official Committee of Unsecured Creditors' request, BV1
deposited the proceeds from the transaction -- $13,573,088 -- in
an escrow account held at U.S. Bank, N.A.

The Escrow Agreement, dated August 20, 2002, between US Bank and
BVI provides that the Proceeds may only be disbursed in
accordance with the terms of a "final, non-appealable order of
the Court."

Pursuant to Section 105 of the Bankruptcy Code, Enron Corp. asks
the Court to direct US Bank to disburse the Proceeds to BVI, net
of any costs owed to the Bank under the terms of the Escrow
Agreement.

Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
tells the Court that the Reorganized Debtors are in the process
of dissolving the numerous direct and indirect non-debtor
subsidiaries of Enron and ENA, including BV1.

Ms. Gray asserts that, in furtherance of the dissolution of BV1,
the Proceeds should be released from escrow to BV1 and
ultimately disbursed by BV1 to ENA, BV1's sole shareholder,
making the funds available for distribution to ENA's creditors
under the Plan.

Headquartered in Houston, Texas, Enron Corporation --
http://www.enron.com/-- is in the midst of restructuring  
various businesses for distribution as ongoing companies to its
creditors and liquidating its remaining operations. Before the
company agreed to be acquired, controversy over accounting
procedures had caused Enron's stock price and credit rating to
drop sharply.

Enron filed for chapter 11 protection on December 2, 2001
(Bankr.S.D.N.Y. Case No. 01-16033).  Judge Gonzalez confirmed
the Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed.  The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts. (Enron Bankruptcy News, Issue No.
158; Bankruptcy Creditors' Service, Inc., 15/945-7000)


GRUPO TMM: TFM, Govt. Reach Settlement of VAT Lawsuit
-----------------------------------------------------
Grupo TMM, S.A. (BMV:TMM A)(NYSE:TMM) ("TMM") announced Tuesday
that Grupo TFM, S.A. de C.V. ("Grupo TFM") and the Mexican
government have reached a settlement of Grupo TFM's VAT lawsuit
and the Mexican government's Put option ("the Put").

In accordance with a proposal jointly prepared and proposed by
TMM and Kansas City Southern ("KCS") in early 2005, Grupo TFM
will acquire the 20 percent of shares of TFM subject to the Put
held by the Mexican Government on a basis that effectively
offsets the VAT claim and Put obligation, ending all litigation
on these issues.

In accordance with the Amended Acquisition Agreement between TMM
and KCS dated December 15, 2004, $110 million in a combination
of cash, notes and stock will be paid by KCS to TMM.

Javier Segovia, president of TMM, stated, "We are extremely
pleased that TFM and the Mexican government were able to settle
these issues on terms acceptable to both parties. TMM will
receive a $110 million payment from Kansas City Southern as part
of our sale of TFM to Kansas City Southern. This payment will
improve TMM's balance sheet while opening the door for new
growth opportunities for the Company. This settlement provides
enhanced value for all TMM stakeholders."

Headquartered in Mexico City, Grupo TMM is a Latin American
multimodal transportation company. Through its branch offices
and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.

CONTACT:  Grupo TMM
          Brad Skinner (Investor Relations)
          Tel: 011-525-55-629-8725 or 203-247-2420
          E-mail: brad.skinner@tmm.com.mx

          Proa/StructurA
          Marco Provencio (Media Relations)
          Tel: 011-525-55-629-8708 and 011-525-55-442-4948
          E-mail: mp@proa.structura.com.mx

          Dresner Corporate Services
          Kristine Walczak (general investors, analysts, media)         
          Tel: 312-780-7205
          E-mail: kwalczak@dresnerco.com
          URL: http://www.grupotmm.com


GRUPO TMM: VAT Settlement Will Not Affect KCS Ratings
-----------------------------------------------------
Kansas City Southern (BB-/Negative/--) and its subsidiaries, TFM
S.A. de C.V. (TFM) and Grupo Transportacion Ferroviaria Mexicana
S.A. de C.V., along with Grupo TMM S.A. have entered into a
settlement agreement with the Mexican government resolving
issues related to the payment of a value-added tax (VAT) refund
to TFM and the purchase of the remaining shares of TFM owned by
the Mexican government. There will be no cash payment made by
any party under the agreement. Standard & Poor's Ratings
Services said the settlement does not affect its ratings or
outlook on Kansas City Southern. Current ratings incorporated an
expectation that a VAT-put swap was the most likely scenario for
the resolution of these issues. Kansas City Southern now owns
100% of Mexican railroad TFM. Ratings on Kansas City Southern
continue to reflect an expectation that credit protection
measures will improve at both Kansas City Southern and TFM over
the next two years as a result of benefits from Kansas City
Southern's acquisition of TFM and from continuing healthy market
fundamentals.

Primary Credit Analyst: Lisa Jenkins, New York (1) 212-438-7697;
isa_jenkins@standardandpoors.com



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

ACEPAR: Faces Strike from Scrap Producers
-----------------------------------------
Scrap producers working near Paraguayan steelmaker Acepar
threatened to strike against the Company, Business News Americas
reports. The producers, who collect company scrap to make a
living, believed that the Company intends to do away with their
jobs. They claimed that Acepar is exporting its waste metal to
the Argentine province of Santa Fe where material is reprocessed
instead of just leaving the scrap for them.

President Nicanor Duarte promised to guarantee work for scrap
producers although the Company is still banned by environmental
authority Seam due to operational failures.


                            ***********


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.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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