---

        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

           Wednesday, October 5, 2005, Vol. 6, Issue 197

                            Headlines

A R G E N T I N A

AGUAS ARGENTINAS: Consumers Demand $450M Compensation
AVAL RURAL: Moody's Assigns B2 on Global LC Rating Scale
CORVIN NEUQUEN: Gets Court Approval for Reorganization
FERRERAS HNOS.: Court Grants Reorganization Plea
MARTORELL Y CIA: Trustee to Present General Report in Court

MEDICINA PREPAGA: Court Declares Company "Quiebra"
NIDERRA S.R.L.: Court Appoints Trustee for Reorganization
PETROBRAS ENERGIA: S&P Places 'B' Ratings on CreditWatch Neg.
PIONEER NATURAL: Redeems Senior Notes Due 2010, 2012
PLASTITREBOL: General Report Submission Set for Oct. 6

POLERO Y HENDI: Judge Approves Creditor's Bankruptcy Petition
SID IMPORT: Seeks Court Approval to Reorganize
T.R.A.C.T.U.R.: General Report Due for Submission Oct. 6
TEKNOSAN S.A.: Gears for Reorganization


B E R M U D A

PXRE GROUP: Sets Date for Special Meeting of Shareholders
TRENWICK GROUP: Court Refuses to Reopen Cases


B R A Z I L

AMPLA: Sells 62MW Generation Park as Part of Restructuring
BANCO VOTORANTIM: S&P Assigns 'BB-' Rating to MTNs
BRASKEM: Elects New Board Members
CESP: State Govt. to Sell Control Next Year
CSN: Rating Reflects Exposure to Volatile Demand, Price Cycles

CSN: S&P Assigns 'B+' Ratings to National Steel
CSN: Fitch Assigns 'BB-' Rating to National Steel Bond Issuance
EMBRATEL: Directors Agree on Merge Operations with Two Companies
EMBRATEL: Shareholders to Vote on Acquisition Agreement
GERDAU: Completes $200M Sale of Commercial Paper

HSBC BANK BRASIL: Moody's Affirms B2 FC Bank Deposit Rating
NII HOLDINGS: Announces Convertibility of Notes Due 2033, 2034


C H I L E

MANQUEHUE NET: Grupo GTD Wraps Up $25M Acquisition
RENTA NACIONAL: Supreme Court Denies Request for Injunction


C O L O M B I A

GRANBANCO-BANCAFE: Fitch Assigns LTFC Rating of 'BB'


C O S T A   R I C A

ICE: Comptroller Approves Contracts Signed with Artinsoft


J A M A I C A

DYOLL INSURANCE: Creditors to Get 17% of Outstanding Claim


M E X I C O

TV AZTECA: BoNY Concludes Sale of CPOs Underlying ADRs


T R I N I D A D   &   T O B A G O

BWIA/LIAT: T&T Government Rejects Merger


U R U G U A Y

URAGUA: OSE to Assume Services October 8


V E N E Z U E L A

ROYAL SHELL: Appoints New E&P VP for Local Unit

     -  -  -  -  -  -  -  -

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

AGUAS ARGENTINAS: Consumers Demand $450M Compensation
-----------------------------------------------------
Consumer groups are demanding that French utility Suez must be
made to pay ARS1.3 billion (US$446mn) owed to clients before it
is allowed to pull out of the Buenos Aires water and sewerage
concession Aguas Argentinas, reports Business News Americas.

The groups, led by Pedro Busetti, of the Deuco consumer defense
association, are seeking compensation for Aguas' shortcomings,
including low water pressure and the failure to install water
meters.

Deuco made its claims based on a report from water regulator
Etoss from August 2003, which studied the failings of Aguas
Argentinas.

The report suggested that Aguas was not fulfilling contractual
obligations, as water pressures were far too low. Resolution 29,
issued in 1999, outlines compensation for consumers when this
occurs.

"According to the preliminary estimates, the fulfillment of
Etoss resolution 29/99 could mean a rebate to consumers of a
maximum 408mn pesos," read the study.

Meanwhile, Etoss resolution 66/95 states that non-residential
clients would have to be offered installment of meters.

"After reiterated requests from Etoss, it has been verified that
Aguas Argentinas has not been able to credit fully the offer of
this option," the report also stated. This means that consumers
affected are due to receive a rebate.

"The estimates of the value of the rebate could reach a figure
of 936mn pesos," said Etoss.

In response, Aguas said: "These claims are within the package
that was being discussed in the renegotiation of the contract,
but with the breakdown in talks with the government, nothing has
come of it."

The ARS1.3-billion figure that the consumer group is claiming is
far larger than Aguas's assets, which stood at ARS350 million,


AVAL RURAL: Moody's Assigns B2 on Global LC Rating Scale
--------------------------------------------------------
Moody's Latin America has assigned first-time insurance
financial strength ratings to AVAL RURAL Sociedad de Garantias
Reciprocas (SGR) of A1.ar on Argentina's national rating scale
and B2 on the global local-currency rating scale. Both ratings
have a stable outlook.

Moody's said that the ratings of AVAL RURAL primarily reflect
the guarantor's integration with and implied support from its
sponsor, NIDERA S.A., the Argentine subsidiary of NIDERA
Holdings BV. AVAL RURAL SGR is a medium-sized financial
guarantor that is engaged in the business of providing
guarantees to working capital loans that are granted to
Argentine crop producers and storers. NIDERA S.A. owns 50% of
AVAL RURAL; the remaining 50% ownership is distributed among 120
crop producers and storers, who in turn will be the future
beneficiaries of guarantees provided by AVAL RURAL. NIDERA's
experience and expertise in the Argentine agribusiness sector is
a positive factor in AVAL RURAL's credit profile.

Furthermore, the rating agency said that AVAL RURAL benefits
from its low operating leverage, as compared with its peers. As
of August 31, 2005 the ratio between AVAL RURAL's total
outstanding guarantees and its invested assets stood at 0.49x,
which implies a substantial cushion to absorb potential
delinquencies or claims.

In the rating agency's view, AVAL RURAL's portfolio of financial
guarantees is well diversified, both geographically and by crop
type. The maximum loan guarantee is not expected to exceed 5% of
total invested assets, contributing to the portfolio's strong
diversification.

Moody's added that these fundamental credit strengths are
tempered by the current foreign currency mismatch between AVAL
RURAL's investments (which are denominated in Argentine pesos)
and its outstanding financial guarantees (which are mostly
denominated in US dollars, but are payable in Argentine pesos),
as well as by the lack of issuer diversification of the
insurer's investment portfolio. The investments are currently
concentrated in two asset classes as follows: (1) 40% in
Argentine Peso-denominated Government Bonds that are rated B3;
and (2) 60% in Argentine Peso-denominated term deposits at Banco
Rio de La Plata. The bank has a Ba2 global local currency rating
and a Aaa.ar rating in the national scale for local currency
deposits.

Moody's said that a ratings upgrade of AVAL RURAL could result
from one or more of the following developments: an improvement
in NIDERA's credit profile, improved investment portfolio
diversification, an upgrade of Moody's rating on Argentine
Government bonds, or sustained low level of claims and
delinquencies on AVAL RURAL's outstanding guarantees.
Conversely, a deterioration in the credit quality of AVAL
RURAL's investment portfolio, a significant increase in the
level of delinquencies and claims on the insurer's financial
guarantees (e.g. in excess of 5-7%), or a significant increase
in operating leverage (e.g. above 1.5x) could result in a rating
downgrade.

AVAL RURAL is headquartered in Buenos Aires, Argentina. As of
August 31, 2005, AVAL RURAL reported total assets of Arg.-Peso
$19 million and outstanding financial guarantees of Arg.-Peso
$11.4 million.


CORVIN NEUQUEN: Gets Court Approval for Reorganization
------------------------------------------------------
Corvin Neuquen S.A. will kick off a reorganization process
following the approval of its petition by Court No. 27 of La
Plata'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.

Mr. Alejandro Eugenio Aguirre will oversee the reorganization
proceedings as the court-appointed trustee. He will verify
creditors' claims until Nov. 28, 2005. The validated claims will
be presented in court as individual reports on Feb. 27, 2006.

The submission of general report on the case will follow.

CONTACT: Corvin Neuquen S.A.
         Diagonal 74 Nro. 1312
         La Plata

         Mr. Alejandro Eugenio Aguirre, Trustee
         Calle 11 Nro. 716
         La Plata


FERRERAS HNOS.: Court Grants Reorganization Plea
------------------------------------------------
Ferreras Hnos. S.A. successfully petitioned for reorganization
after Mar del Plata's civil and commercial Court No. 5 issued a
resolution opening the Company's insolvency proceedings.

Under insolvency protection, the Company will continue to manage
its assets subject to certain conditions imposed by Argentine
law and the oversight of a court-appointed trustee.

Infobae relates that Mr. Luis H. Mathieu will serve as trustee
during the course of the reorganization. The trustee will be
accepting creditors' proofs of claim for verification until Nov.
10, 2005.

After verifications, the trustee will prepare the individual
reports and submit it in court on Dec. 12, 2005. He will also
present a general report for court review on Feb. 14, 2006.

CONTACT: Ferreras Hnos. S.A.
         Avda. Independencia 3402
         Mar del Plata

         Mr. Luis H. Mathieu, Trustee
         Rivadavia 2333
         Mar del Plata


MARTORELL Y CIA: Trustee to Present General Report in Court
-----------------------------------------------------------
Mr. Carlos Federico Berger, the trustee assigned to supervise
the liquidation of Martorell y Cia S.A. Sociedad de Bolsa, will
present the general report of the case tomorrow, Oct. 6, 2005.

Mr. Berger submitted the validated individual claims for court
approval on Aug. 25, 2005. These reports explain the basis for
the accepted and rejected claims.

Court No. 3 of Buenos Aires' civil and commercial tribunal has
jurisdiction over this bankruptcy case. The city's Clerk No. 6
assists the court with the proceedings.

CONTACT: Mr. Carlos Federico Berger, Trustee
         Santiago del Estero 112
         Buenos Aires


MEDICINA PREPAGA: Court Declares Company "Quiebra"
--------------------------------------------------
Court No. 6 of Buenos Aires' civil and commercial tribunal
declared Medicina Prepaga S.A., which was formerly called
Medical Life Medicina Privada, bankrupt.

La Nacion relates that the ruling comes in approval of the
petition filed by the Company's creditor, Asociacion Civil de
Estudios Superiores, for nonpayment of $3,853.30 in debt.

Trustee Sergio Novick will examine and authenticate creditors'
claims until Dec. 6, 2005. This is done to determine the nature
and amount of the Company's debts. Creditors must have their
claims authenticated by the trustee by the said date in order to
qualify for the payments that will be made after the Company's
assets are liquidated.

Clerk No. 12 assists the court on the case, which will conclude
with the liquidation of the Company's assets.

CONTACT: Medicina Prepaga S.A.
         San Mart¡n 574
         Buenos Aires

         Mr. Sergio Novick, Trustee
         Libertad 359
         Buenos Aires


NIDERRA S.R.L.: Court Appoints Trustee for Reorganization
---------------------------------------------------------
Niderra S.R.L., a company operating in Buenos Aires, is ready to
start its reorganization after Court No. 26 of the city's civil
and commercial tribunal appointed Mr. Julio Pedro Salaberry to
supervise the proceedings as trustee. Clerk No. 52 assists the
court on this case.

An Infobae report states that Salaberry will verify creditors
claims until Nov. 16, 2005. Afterwards, he will present these
claims as individual reports for final review by the court on
Dec. 29, 2005. Mr. Salaberry will also provide the court with a
general report pertaining to Niderra S.R.L reorganization on
March 13, 2006. The court has scheduled the informative assembly
on July 11, 2006.

CONTACT: Niderra S.R.L.
         Monroe 2630
         Buenos Aires

         Mr. Julio Pedro Salaberry, Trustee
         Uruguay 766
         Buenos Aires


PETROBRAS ENERGIA: S&P Places 'B' Ratings on CreditWatch Neg.
-------------------------------------------------------------
Standard & Poor's Ratings Services has placed its 'B' ratings on
Argentina-based Petrobras Energia S.A. (PESA) on CreditWatch
with negative implications.

"The CreditWatch placement follows increasing government
intervention in Venezuela that might affect the company's
financial profile," said Standard & Poor's credit analyst
Luciano Gremone.

The new legal framework for hydrocarbon production in Venezuela
establishes that all private concessions will now have to be
operated by mixed-owned companies in which the Venezuelan
Government, through its oil and gas company Petroleos de
Venezuela S.A. (PDVSA, FC: B+/Stable/--), will hold a
controlling ownership. The conditions under which this will
happen are still not defined, but PESA's Board of Directors
recently approved the execution of provisional agreements with
PDVSA to start operating under this new regime.

PESA's business exposure in Venezuela includes about 30% of
total consolidated oil and gas production and about 20%-25% of
total consolidated EBITDA. At this point, there are still
significant uncertainties about the final outcome and commercial
conditions for the new operation agreements for private oil and
gas companies in Venezuela. As a result, and considering the
importance of Venezuela for PESA, the ratings will remain on
CreditWatch until new operational conditions are defined. PESA's
foreign currency rating could be downgraded by one notch if we
conclude that the current cash-generation coming form Venezuela
will become severely affected. Likewise, the ratings could be
affirmed if the final conditions do not have a significant
negative impact on cash generation.

The rating on Petrobras Energia S.A, (PESA) reflects its
relatively aggressive financial profile, significant need for
capital expenditures (to develop its large reserve base and
increase production levels), high exposure to uncertain and
rapidly changing economic and regulatory rules mainly in
Argentina and Venezuela, and the uncertainties surrounding the
utility business in which the company participates. The rating
also incorporates Standard & Poor's perception of increasing
economic incentives for Brazilian-based Petroleos Brasileiros
S.A. (Petrobras) to support its subsidiary. In light of the
cross-default clauses between Petrobras and PESA, the recent
merger of most of Petrobras' Argentine operations under PESA and
the intercompany US$200 million loan granted in February 2005
show a higher commitment from Petrobras to PESA and enhance
PESA's financial flexibility.

PESA, an Argentine-based subsidiary of Petrobras, is the third-
largest oil and gas production company in the country and is
involved in several energy-related businesses in Argentina,
Ecuador, Venezuela, and Bolivia, among other countries. PESA has
US$2 billion in total debt outstanding.

Primary Credit Analyst: Luciano Gremone, Buenos Aires
(54) 11-4891-2143; luciano_gremone@standardandpoors.com

Secondary Credit Analyst: Marta Castelli, Buenos Aires
(54) 114-891-2128; marta_castelli@standardandpoors.com


PIONEER NATURAL: Redeems Senior Notes Due 2010, 2012
----------------------------------------------------
Pioneer Natural Resources Company (NYSE:PXD) announced that
Monday it has redeemed for cash all of its outstanding 9-5/8%
Senior Notes due 2010 and 7.50% Senior Notes due 2012 (the
"Notes"). The cash payment to redeem the Notes included the
make-whole premium, which was determined on September 28, 2005,
plus accrued and unpaid interest to, but not including, October
3, 2005. In total, Pioneer paid $34.6 million in connection with
the redemption of the Notes.

Associated with the redemption of the Notes and the recently
completed debt tender offer for the Company's 5.875% Senior
Notes due 2012, the Company will recognize a pre-tax charge of
approximately $14 million in its reported third quarter of 2005
results.

Pioneer is a large independent oil and gas exploration and
production company with operations in the United States,
Argentina, Canada and Africa. Pioneer's headquarters are in
Dallas, Texas.


PLASTITREBOL: General Report Submission Set for Oct. 6
------------------------------------------------------
The submission for the general report on the Plastitrebol S.R.L.
liquidation will be tomorrow, Oct. 6, 2005.

On Aug. 25, 2006, the individual reports were presented in court
for approval. The reports contained the claims forwarded by the
creditors against the Company. These claims underwent
verification phase that lasted until June 29, 2005.

Court No. 23 of Buenos Aires' civil and commercial tribunal
ordered the liquidation of Plastitrebol S.R.L. after the company
defaulted on its obligations and appointed Mr. Manuel Omar
Mansanta as trustee.

Clerk No. 46 assists the court on this case, which will end with
the disposal of the Company's assets in favor of its creditors.

CONTACT: Plastitrebol S.R.L.
         Estomba 3932
         Buenos Aires

         Mr. Manuel Omar Mansanta, Trustee
         Avda Cordoba 1351
         Buenos Aires


POLERO Y HENDI: Judge Approves Creditor's Bankruptcy Petition
-------------------------------------------------------------
Polero y Hendi S.R.L. was declared bankrupt after Court No. 14
of Buenos Aires' civil and commercial tribunal endorsed the
petition of Mr. Elias Hendi for the Company's liquidation.
Argentine daily La Nacion reports that Mr. Hendi has claims
totaling US$8,700 against Polero y Hendi S.R.L.

The court assigned Ms. Patricia Ferrari to supervise the
liquidation process as trustee. Ms. Ferrari will validate
creditors' proofs of claims until Nov. 25, 2005.

The city's Clerk No. 28 assists the court in resolving this
case.

CONTACT: Polero y Hendi S.R.L.
         Av. Montes de Oca 764
         Buenos Aires

         Ms. Patricia Ferrari, Trustee
         Viamonte 1653
         Buenos Aires


SID IMPORT: Seeks Court Approval to Reorganize
----------------------------------------------
Sid Import S.R.L., a company operating in Buenos Aires, has
requested for reorganization after failing to pay its
liabilities since Oct. 31, 2002.

The reorganization petition, once approved by the court, will
allow the Company to negotiate a settlement with its creditors
in order to avoid a straight liquidation.

The case is pending before Court No. 5 of the city's civil and
commercial tribunal. Clerk No. 10, assists on this case.

CONTACT: Sid Import S.R.L.
         Av. Corrientes 2589
         Buenos Aires


T.R.A.C.T.U.R.: General Report Due for Submission Oct. 6
--------------------------------------------------------
The deadline for the submission of the general report on the
T.r.a.c.t.u.r. Viajes y Turismo S.R.L. bankruptcy will be
tomorrow, Oct. 6, 2005.

The Company began liquidating its assets after Court No. 22 of
Buenos Aires' civil and commercial tribunal declared the Company
bankrupt and appointed Alejandra E. Giacomini as trustee.

The trustee reviewed claims forwarded by the Company's
creditors until June 27, 2005. After claims verification, Ms.
Giacomini submitted the individual reports for court approval
on Aug. 24, 2005.

Clerk No. 43 assists the court on this case.

CONTACT: Ms. Alejandra E Giacomini
         Avda Carabobo 250
         Buenos Aires


TEKNOSAN S.A.: Gears for Reorganization
---------------------------------------
Buenos Aires Judge No. 1, with assistance from Clerk No. 1,
issued a resolution opening the reorganization of Teknosan S.A.
This pronouncement authorizes the Company to begin drafting a
settlement proposal with its creditors in order to avoid
liquidation. The reorganization allows Teknosan S.A. to retain
control of its assets subject to certain conditions imposed by
Argentine law and the oversight of the court appointed trustee.

Mr. Mauricio Leon Brawer will serve as trustee during the course
of the reorganization. He will be validating creditors' proofs
of claim until Nov. 9, 2005. The results of the verification
will be presented in court as individual reports on Dec. 22,
2005. The trustee is also obligated to give the court a general
report of the case on March 6, 2006. The general report
summarizes events relevant to the reorganization and provides an
audit of the Company's accounting and business records.

Mr. Brawer will present the completed settlement proposal to its
creditors during the informative assembly scheduled on Aug. 17,
2006.

CONTACT: Mr. Mauricio Leon Brawer, Trustee
         Sarmiento 2593
         Buenos Aires



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

PXRE GROUP: Sets Date for Special Meeting of Shareholders
---------------------------------------------------------
PXRE Group Ltd. (NYSE: PXT) announced Monday that it will hold a
special meeting of shareholders on November 18, 2005 to consider
the authorization of an additional 300 million common shares and
the exchange of 375,000 of the Company's series D perpetual
preferred shares into approximately 34.1 million PXRE common
shares. On September 30, the Company announced that it had
agreed to sell 375,000 of its series D perpetual preferred
shares in a private placement pursuant to Section 4(2) of the
Securities Act of 1933.

The meeting will begin at 9:00 a.m. Atlantic Time and will be
held at PXRE House, 110 Pitts Bay Road, Pembroke HM 08, Bermuda.
Shareholders of record as of October 14, 2005 will be entitled
to vote at the meeting. Proxy materials are expected to be
mailed to the Company's shareholders beginning on or about
October 18, 2005.

The offering of the series D perpetual preferred shares has not
been, and will not be, registered with the Securities and
Exchange Commission under the Securities Act. Such shares may
not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements
under the Securities Act.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any of PXRE's common shares, nor
shall there be any sale of the common shares in any state in
which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of
any such state.

PXRE, with operations in Bermuda, Europe and the United States,
provides reinsurance products and services to a worldwide
marketplace. The Company's primary focus is providing property
catastrophe reinsurance and retrocessional coverage. The Company
also provides marine, aviation and aerospace products and
services. The Company's common shares trade on the New York
Stock Exchange under the symbol "PXT."

CONTACT: PXRE Group Ltd.
         John Modin, Chief Financial Officer
         Tel: +1-441-296-5858
         E-mail: john.modin@pxre.com

         Investors:
         Jamie Tully of Citigate Sard Verbinnen
         Tel: +1-212-687-8080
         E-mail: jtully@sardverb.com


TRENWICK GROUP: Court Refuses to Reopen Cases
---------------------------------------------
The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware denied LaSalle Cover Company, LLC, and
Costa Brava Partnership III, L.P.'s request to:

    a) set aside dismissal orders for Trenwick Group, Ltd., and
       LaSalle Re Holdings Limited;

    b) reopen the Debtors' bankruptcy cases; and

    c) appoint Chapter 11 Trustees.

LaSalle Cover and Costa Brava are creditors and equity holders
of the Debtors.  They are registered owners of:

   -- 1,350,830 shares of Series A Preferred Stock of LaSalle Re
      Holdings, and

   -- 220,000 shares of Common Stock of Trenwick Group.

LaSalle Cover also holds a liquidated, non-contingent, non-
disputed $7.6 million unsecured claim against LaSalle Re
Holdings.

The Creditors asked for the reopening of the Debtors' chapter 11
cases because they alleged that the Bankruptcy Court rendered
its decisions regarding the Confirmation of Trenwick America's
Plan and Motion to Dismiss based on inaccurate information.

                     Credit Agreement

As reported in the Troubled Company Reporter, Trenwick America
Corporation and Trenwick Holdings Limited (UK), Trenwick Group's
subsidiaries, entered into a $490 million credit agreement with
various Banks in September 2000.  LaSalle Re Holdings and
LaSalle Re Limited guaranteed the credit agreement.

The credit agreement consisted of:

   -- a $260 million revolving credit facility, and
   -- a $230 million letter of credit facility.

The Revolving Credit Facility was converted into a four-year
term loan and repaid in full by a loan from LaSalle Re Limited
to Trenwick Group.  Trenwick Group paid $195 million to the
Banks on Trenwick America's behalf on June 17, 2002.

On Dec. 24, 2002, the Credit Agreement was further amended to:

   -- reduce the Letter of Credit to $182.5 million; and

   -- grant the Banks security interest in the assets and debts
      of Trenwick Group's subsidiaries.

The Creditors told the Bankruptcy Court that that it is not
clear whether the transferred money constituted a loan or a
capital contribution in Trenwick America.  Neither Trenwick
Group nor Trenwick America included the transfer as a debt or
receivable in their Schedules of Assets and Liabilities.

The Creditors claimed that the Debtors did not disclose during
the Plan confirmation hearing on Oct. 27, 2004, that:

   (a) they had entered into the Second Amended Credit Agreement
       the previous day;

   (b) the terms of the Second Amended Credit Agreement
       substantially prejudiced the rights of the Debtors'
       creditors -- other than the Banks -- and shareholders by
       purporting to encumber their assets;

   (c) if Trenwick America owes Trenwick Group $195 million,
       the debt would constitute a significant unadministered
       asset in Trenwick Group's estate; and

   (d) if Trenwick Group holds a $195 million claim against
       Trenwick America, that claim would likely render Trenwick
       America's Plan not feasible and therefore not
       confirmable.

Headquartered in Hamilton, Bermuda, Trenwick Group, Ltd. --
http://www.trenwick.com/-- and LaSalle Re Holdings Limited
filed for Section 304 proceeding on April 26, 2005 (Bankr. D.
Del. Case Nos. 05-11193 & 05-11194).  The Debtors are affiliates
of Trenwick America Corporation.  The Debtors, together with
Trenwick America, filed for chapter 11 protection on August 20,
2003 (Bankr. D. Del. Case No. 03-12637).  On Nov. 2, 2004, the
Honorable Judge Walrath dismissed Trenwick Group and LaSalle Re
Holdings' chapter 11 cases and the cases were closed on Dec. 29,
2004.  Mark E. Felger, Esq., at Cozen O'Connor represents the
Debtors.  When the Debtors filed for ancillary proceeding, they
estimated assets between $10 million and $50 million and debts
between $50 million to $100 million. (Troubled Company Reporter,
Oct. 4, 2005, Vol. 9, Issue 235)



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

AMPLA: Sells 62MW Generation Park as Part of Restructuring
----------------------------------------------------------
Power distribution company Ampla has sold its 62MW generation
park to local industrial group Arbeit for BRL180 million
(US$80mn), reports Business News Americas.

The sale is part of a deep restructuring of Ampla's operations
in Brazil and a move to comply with local legislation that
requires separation between distribution and generation
operations.

According to information from power regulator Aneel, Ampla's
generation park is made up of eight hydroelectric plants.


BANCO VOTORANTIM: S&P Assigns 'BB-' Rating to MTNs
--------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' foreign-
currency senior unsecured debt rating to Banco Votorantim S.A.'s
(LC: BB/Stable/B; FC: BB-/Stable/B) $200 million medium-term
senior unsecured, fixed-rate notes, to be issued in October 2005
and maturing in 10 years.

"The ratings on Banco Votorantim S.A. incorporate the potential
risks associated with the bank's treasury business; its exposure
to sovereign risk through its government securities portfolio, a
common issue for Brazilian banks; and the risks associated with
the volatile economic environment in Brazil that might cause
asset quality deterioration," said Standard & Poor's credit
analyst Daniel Araujo. The rating benefits from the implicit
support of the Votorantim Group (LC: BBB-/Stable/--; FC: BB-
/Stable/--); the group's strong brand name; and the bank's good
profitability. The ratings also factor in the bank's experienced
management team and efficient decision-making processes.

Banco Votorantim carries relatively high exposure to Brazil's
sovereign risk through its government securities portfolio and
open-market operations, one of the reasons being the rendering
of hedge instruments to its clients. Government securities were
equivalent to approximately 3.3x its equity (based on
consolidated figures) in June 2005.

The bank has recently entered the payroll-discount loans
segment, which also has above-average growth opportunities in
the market. Asset quality indicators remain at manageable levels
and are much better than the average of the Brazilian banking
industry. In addition, Banco Votorantim has maintained a
conservative positioning in its provisioning for potential loan
losses. Loan-loss provisions represented 128% of NPLs in June
2005 (from 114% in December 2004). Nonetheless, because of the
expected further growth in the loan portfolio, the bank is
exposed to a potential worsening in asset quality if domestic
economic conditions deteriorate. We expect asset quality ratios
to be maintained under control, helped by the bank's good risk
management, based on disciplined systems and controls.

The Votorantim Group is one of the largest and most influential
industrial conglomerates in Brazil. Its brand-name recognition
has helped the bank to leverage on its business, and the images
of both organizations are closely linked. The ratings
incorporate implicit support from Votorantim Group, although
this is not expected in the event of system risk. The Votorantim
Group supervises the bank's activities and operations, and its
conservatism permeates the bank's activities. Banco Votorantim's
management is made up of professionals with vast experience in
the financial markets and the Group's companies.

The stable outlook on the local-currency rating reflects a
balance between negative ratings factors, namely the economic
risks of the Brazilian banking industry and the potential risks
related to asset quality, especially its car-financing segment
and its holdings of government securities; and its positives,
including its implicit support from the Votorantim Group, its
good business profile, and its consistently high profitability.
In the event of a downgrade or negative change for the local-
currency sovereign credit rating and/or outlook on Brazil, the
local currency credit rating and/or outlook on Banco Votorantim
would move in tandem. If, on the other hand, the sovereign local
currency rating has positive changes, the bank would not be
automatically affected; we would make an assessment based on its
own merits, on a case-by-case basis. The main negative item that
could generate downward pressure on the bank's ratings is asset
quality and worsening in profitability. On the upward side, the
rating would benefit from maintaining asset quality under
control and qualitative improvements in profitability and
capitalization.

The stable outlook on the foreign-currency credit rating on
Banco Votorantim reflects the outlook on the sovereign credit
rating on the Federative Republic of Brazil. At current levels,
a change in the foreign currency sovereign credit rating would
lead to a similar action on the foreign currency rating on Banco
Votorantim.

Primary Credit Analyst: Daniel Araujo, Sao Paulo
(55) 11-5501-8939; daniel_araujo@standardandpoors.com

Secondary Credit Analyst: Tamara Berenholc, Sao Paulo
(55) 11-5501-8950; tamara_berenholc@standardandpoors.com


BRASKEM: Elects New Board Members
---------------------------------
The shareholders of Braskem S.A. elected during the
Extraordinary General Shareholders' Meeting held on October 3,
2005 Mrs. Maria Das Gracas Silva Foster and Mr. Claudio Melo
Filho to replace board members Mr. Kuniyuki Terabe and Mr. Jose
Augusto Cardoso Mendes, who presented their resignation.

MINUTES OF THE EXTRAORDINARY GENERAL SHAREHOLDERS' MEETING
HELD ON OCTOBER 3, 2005

1. DATE AND TIME: October 3, 2005, at 10:30 p.m.

2. LOCATION: At the Company's headquarters, located at Rua
Eteno, 1561, Camacari Petrochemical Complex, CEP 42.810 -000,
City of Camacari, Satate of Bahia.

3. NOTICE OF CONVOCATION: Notice of Convocation published
pursuant to Articles 124 and 289 of Law No. 6,404/76, in the
newspaper "Diario Oficial do Estado da Bahia", on September
17/18, 20 and 21, 2005, in the newspaper "A Tarde", on September
17, 19 and 20, 2005, and pursuant to CVM Instruction No.
207/94in the newspapers "Gazeta Mercantil" on September 19, 20
and 21, 2005.

4. ATTENDANCE: Shareholders representing more than 85% of the
voting capital, as evidenced by signatures contained in the
Shareholder Attendance Book.

5. MEETING BOARD: Chairman: Anna Cecilia Dutra, and Secretary:
Ana Patricia Soares Nogueira, chosen in accordance with Article
17 of the Bylaws.

6. ITEM ON THE AGENDA: Election of members of the Board of
Directors, due to the resignations presented.

7. DELIBERATION: The sole item on the agenda was discussed and
put to a vote, and the following decision was unanimously
approved by those present:

7.1.) RESIGNATION AND SUBSTITUTION OF MEMBERS OF THE BOARD OF
DIRECTORS:

a) the shareholders acknowledge the fact that Board Member
Kuniyuki Terabe and the alternate member Jose Augusto Cardoso
Mendes presented their resignations;

b) the shareholders registered votes of gratitude and
recognition to these board members for their dedicated efforts
and contribution to the Company;

c) the shareholders then elected the following new board members
to replace the vacant positions due to the resignations
presented, with a mandate coincident to the other members of the
Board of Directors, being until the Ordinary General Meeting
that will analyze the management accounts related of the fiscal
year ended December 31, 2005, respectively, to substitute the
Board Member Mr. Kuniyuki Terabe, Mrs. MARIA DAS GRACAS SILVA
FOSTER , Brazilian, married, engineer, enrolled with the CPF/MF
Individual Taxpayers' Registry under No. 694.772.727 -87, bearer
of Identity Card RG No. 02.918.764 -8, issued by the
Identification Institute of Rio de Janeiro, resident and
domiciled in Rio de Janeiro, RJ, with professional address at
Av. Republica do Chile, 65, 20th Floor, Centro, Rio de Janeiro,
RJ, CEP: 20139-900; and, to substitute the alternate member Mr.
Jose Augusto Cardoso Mendes, Mr. CLAUDIO MELO FILHO , Brazilian,
married, business administrator, enrolled with the Regional
Council of Business Administrators under No. 7.496 and with the
CPF/MF Individual Taxpayers' Registry under No. 358.882.885 -00,
resident and domiciled in Brasilia, DF, with professional
address at SAS, Quadra 05, Bloco N, Edf. OAB, 9th Floor,
Brasilia, DF, CEP: 70.070 -000. The Board Members elected herein
presented written declarations stating that, in accordance with
Article 37, item II, of Law No. 8,934 of 11/18/1994, with text
given by Article 4 of Law No.10,194 of 2/14/2001, they are in no
way impeded from performing their commercial or administrative
duties as a result of any criminal sentence, as well as they are
in no way impeded by any special law or condemned by bankrupt
crime, violation of duty, bribery, concussion, peculation,
crimes against the economy, full faith and credit, or property,
or any criminal penalty that impedes, even temporarily, the
access to public offices, in accordance with the 1st Paragraph
of Article 147 of Law No. 6,404 of 12/15/1976, as well as having
presented, in fulfillment of CVM Instruction No. 358, of 1/3/02,
and No. 367, of 5/29/02, written declarations according to the
terms of said Instructions, which were placed on file at the
Company's headquarters, which after were drafted their
respective investiture contracts. Therefore, based on the
changes approved above, the Company's Board of Directors shall
now be made up of the following members: TITLE-HOLDERS: PEDRO
AUGUSTO RIBEIRO NOVIS - CHAIRMAN; ALVARO FERNANDES DA CUNHA
FILHO - VICE-CHAIRMAN; JOSE DE FREITAS MASCARENHAS; LUIZ
FERNANDO CIRNE LIMA; NEWTON SERGIO DE SOUZA; ALVARO PEREIRA
NOVIS; FRANCISCO TEIXEIRA DE SA; MARIA DAS GRACAS SILVA FOSTER;
PATRICK HORBACH FAIRON; ANDRE TAPAJOS CUNHA; MARIA ROMA DE
FREITAS. RESPECTIVE ALTERNATES: RUY LEMOS SAMPAIO; MARCOS LUIZ
ABREU DE LIMA; GUILHERME SIMOES DE ABREU; HILBERTO MASCARENHAS
ALVES DA SILVA FILHO; CLAUDIO MELO FILHO; MARCOS WILSON SPYER
REZENDE; LUCIO JOSE SANTOS JUNIOR; EDMUNDO JOSE CORREIA AIRES;
ROGERIO GONCALVES MATTOS; DEUSDEDITE FAGUNDES DE BRITO FILHO;
FERNANDO DE CASTRO SA.

8. CLOSING: Having no further subjects on the agenda, the
Extraordinary General Shareholders' Meeting was adjourned, and
this resolution drafted, read, discussed and signed by all those
present, comprising the quorum necessary for the validity of the
deliberations in this meeting. Then, as decided by the same
shareholders, the Secretary of the meeting was authorized to
take out the necessary certifications. Camacari/BA, October 03,
2005.

CONTACT: Braskem S.A.
         Jose Marcos Treiger
         Investor Relations Oficcer
         Phone: 5511 3443-9529 jm.treiger@braskem.com.br

         Luiz Henrique Valverde
         IR Manager
         Phone: 5511 3443-9744 luiz.valverde@braskem.com.br

         Luciana Paulo Ferreira
         IR Manager
         Phone: 5511 3443-9178 luciana.ferreira@braskem.com.br

         URL: www.braskem.com.br


CESP: State Govt. to Sell Control Next Year
-------------------------------------------
Sao Paulo Water Resources and Energy Secretary Mauro Arce
revealed the government plans to sell control of its power
generation company Companhia Energetica de Sao Paulo (Cesp) next
year, relates Business News Americas.

In the meantime, Arce said the government is seeking a solution
to Cesp's BRL11-billion (US$4.9bn) debt. Solution includes the
sale of Cesp's sister company, power transmission company CTEEP,
in February 2006. Proceeds from this particular operation will
be injected into Cesp to improve its finances.

Cesp is the biggest power generator in the state with installed
capacity of 7,455MW from hydroelectric plants.

CONTACT:    Companhia Energetica De Sao Paulo
            Rua da ConsolaO o, 1.875
            CEP 01301 -100 S o Paulo, Brazil
            Phone: +55-11-234-6322
            Fax: +55-11-287-0871
            Home Page: http://www.CESP.com.br/
            Contact:
            Mauro G. Jardim Arce, Chairman
            Ruy M. Altenfelder Silva, Vice Chairman
            Vicente Kazuhiro Okazaki, Finance Director


CSN: Rating Reflects Exposure to Volatile Demand, Price Cycles
--------------------------------------------------------------
Rationale

The 'BB' local-currency rating on Brazilian flat carbon steel
maker Companhia Sider£rgica Nacional (CSN) reflects the
company's exposure to volatile demand and price cycles,
increasing competition in its home and predominant market of
Brazil, aggressive dividend policy and capital investment plan,
and sizable gross-debt position. These risks are partly offset
by CSN's privileged cost position and sound operating profile,
favorable market position in Brazil, strong export capabilities
to offset occasional domestic demand sluggishness, and
increasing business diversification.

CSN is one of the lowest-cost steel producers in the world,
which is a result of its access to proprietary, high-quality
iron ore (at Casa de Pedra mine); self-sufficiency in energy;
streamlined facilities; and logistics advantages. This is in
addition to the group's strong market position in the fairly
concentrated steel industry in Brazil. The domestic market has
remained under some tension in first-half 2005, with relevant
declines in key sectors in second-quarter 2005; nevertheless,
the domestic auto sector remains strong, with sales boosted by
continuing expansion of automobile exports. Part of the decline
in the domestic market has been exported. CSN's own export
performance has been mixed, with the price weakening in Europe
and the U.S. somewhat offset by the still-strong Asian demand.
Although still relatively high stocks in Europe and the U.S. and
the threat of a reduction in Chinese net imports are relevant
medium-term concerns, CSN is expected to perform substantially
better than its international peers due to its proprietary iron-
ore reserves and resulting favorable cost position. An expansion
of its mine capacity is under way and incremental production is
expected to be sold under long-term contracts. Iron ore is
typically a much more stable but equally profitable industry
than steel and should be cash contributive to CSN as the
production at Casa de Pedra ramps up.

CSN's operating performance in first-half 2005 remained sound.
Rising coal prices were offset by a continuing and significant
decline in the cost of coking coal and the foreign currency rate
appreciation. With an EBITDA margin hovering at about 45%, CSN
should continue performing well-above international peers and
reporting strong credit measures. As calculated by Standard &
Poor's, CSN's EBITDA margin reached a high 48% in the past 12
months ended June 30, 2005, boosted primarily by a better
product mix (with increased galvanized steel). EBITDA interest
coverage and funds from operations (FFO) to adjusted total debt
were at 4.1x and 26.2%, respectively, in the 12 months ended
June 30, 2005, weakened by derivatives losses in second-quarter
2005 due to the local-currency appreciation. We continue to
highlight the risk of rapid deterioration in CSN's financial
ratios if steel prices decline further in the future, in
particular on a gross basis, considering that the company has
been increasing gross leverage substantially since 2004, which
tends to be only marginally reduced in the medium term.

The group's total gross debt, adjusted for debt at CSN's
controlling shareholder (Vicunha Siderurgia S.A., or VicSid) and
pension liabilities, amounted to nearly $4.5 billion at June 30,
2005, (compared with $4.22 billion in December 2004) and has
been going up sequentially in the past several quarters; indeed,
the figure should be added by $750 million in perpetual notes
issued in July 2005. Debt at the parent company level amounted
to BrR1.2 billion in debentures (approximately $520 million)
that are currently being replaced by a perpetual notes issuance
at a higher layer of its corporate structure (National Steel
S.A., or NatSteel). Upon the conclusion of this transaction,
VicSid, as well as other layers in the structure (including
Vicunha A‡os S.A., or VicA‡os) are expected to be virtually free
of any debt obligation. While the change in the debt profile at
the shareholder's level is positive in the short-term to CSN, as
it tends to reduce dividend requirements and allow CSN to hold a
higher proportion of its cash flow to fund capital expenditures,
we will continue to view NatSteel's notes as if they were CSN's
own debt for the purposes of financial ratio calculation.
Additionally, at higher levels in the company's ownership
structure, the controlling Steinbruch family has a private
agreement to take its old partner over, which also suggests that
despite lower cash requirements at NatSteel's level, CSN's
dividend policy will remain aggressive in order to service cash
requirements at higher layers of the corporate structure.

Liquidity

CSN's liquidity has been an important short-term mitigating
factor to the company's increasing gross-debt position and
persistently high short-term debt maturities. Cash reserves
amounted to $1.6 billion at June 30, 2005 and remain
exceptionally high (having averaged about $1.1 billion in 2004),
even after approximately $850 million was distributed in the
form of dividends; those are added by $750 million coming from
the issuance of perpetual notes in July 2005. Cash liquidity is
more than enough to cover short-term debt maturities of $1.1
billion within the next 12 months through June 2006.

We expect some reduction in debt balances through 2005, but at a
very gradual pace. As a result, high gross debt balances should
continue translating into a high interest burden; currency
volatility should also continue having a relevant effect on the
company's overall financial performance. Refinancing risk is
mild. There is some debt concentration in 2008, 2013, and 2015
coming from bullet bond maturities. The company is expected to
reach adequate long-term financing to fund a portion of
programmed investments, while the remainder will likely be
financed with internal cash generation, as we still expect
strong FFO for the next several quarters due to the favorable
fundamentals.

Outlook

The outlook for both the local and foreign currency long-term
corporate credit ratings is stable. The stable outlook on the
local-currency corporate credit rating reflects our expectations
that CSN will manage to preserve strong liquidity in the near
future thanks to its robust cash generation and despite the
already announced capital commitments. The outlook also assumes
that CSN will be able to maintain sound operating results
through the steel cycle thanks to its favorable cost position
and access to steel export markets.

The rating could come under downward pressure if a continuing
increase of gross debt leads financial metrics to deteriorate
permanently. Acquisitions or further capital commitments that
could potentially hurt the company's current liquidity condition
or add financial leverage are not assumed and could equally lead
to a negative revision of the ratings or a negative outlook.

On the other hand, strengthening results to levels not factored
in or a more conservative financial stance (essentially deriving
from lower total gross debt balances and lower exposure to
short-term debt) could lead to a positive revision of the
ratings or outlook in the medium term. However, this scenario is
seen as unlikely considering the company's significant capital
and dividend commitments already scheduled for the near future.

The stable outlook on the foreign-currency corporate credit
rating reflects that of the foreign-currency sovereign rating on
the Federative Republic of Brazil (foreign currency BB-
/Stable/B; local currency BB/Stable/B).

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


CSN: S&P Assigns 'B+' Ratings to National Steel
-----------------------------------------------
Standard & Poor's Ratings Services has assigned its 'B+'
corporate credit rating to National Steel S.A. (NatSteel), a
company incorporated in Luxembourg and one of the indirect
shareholders of Brazilian flat carbon steel maker Companhia
Siderurgica Nacional (CSN, local currency: BB/Stable/--, foreign
currency: BB-/Stable/--). A 'B+' rating was also assigned to
NatSteel's forthcoming $500 million perpetual notes. The outlook
is stable.

NatSteel is a special-purpose vehicle (SPV) whose only purpose
is to hold the perpetual notes and a direct stake in Vicunha
Acos S.A. (VicAcos), an intermediary holding company that
controls Vicunha Siderurgia S.A. (VicSid), which in turn holds a
42.74% voting stake of CSN.

"The rating on the perpetual notes reflects CSN's ultimate
ability to upstream dividends to NatSteel throughout the layers
of its corporate structure," said Standard & Poor's credit
analyst Reginaldo Takara. "The rating is two notches lower than
CSN's local-currency corporate credit rating to reflect
structural subordination of the perpetual notes relative to
CSN's own operating and financial obligations." We believe that
CSN's controlling shareholder has significant economic
incentives to make dividend distribution to be approved in
amounts sufficient to comfortably pay interests on the notes.
Furthermore, we do expect CSN to sustain strong cash flow
fundamentals in the future based on its very low-cost structure
and market position and thus upstream dividends without
compromising its own financial profile.

Nevertheless, we assess subordination and recovery prospects on
the perpetual notes by assuming a default scenario for CSN,
under which the steelmaker's ability to distribute dividends
would have already been compromised and NatSteel's perpetual
bondholders would be in a significantly disadvantageous position
compared with creditors at CSN's level. We estimate that
operating (suppliers, employees, taxes) and financial
liabilities at CSN's level represent more than 50% of CSN's
adjusted total assets, which significantly reduces recovery
prospects in a scenario of CSN's default. While the perpetual
notes will have a first pledge of a 18% stake in CSN's shares,
which today provides bondholders with a comfortable coverage of
about 2x the notes' principal amount, Standard & Poor's is
typically skeptical about share collateral values in the long
run (more so for a perpetual issuance), especially when assuming
a default scenario, with results that are only minimal if any
credit is given to the collateral when determining recovery
prospects for perpetual bondholders.

The outlook on NatSteel's rating is based on the corporate
credit ratings on CSN. The stable outlook on the local-currency
corporate credit rating on CSN reflects our expectations that
CSN will preserve strong liquidity and sound operating results
through the steel cycle. NatSteel's rating could come under
downward pressure if CSN further increases gross debt levels or
if acquisitions or further capital commitments potentially hurt
CSN's current liquidity condition. The ratings' upward potential
is limited by CSN's significant capital expenditures program in
the next couple of years and its current relatively aggressive
gross debt leverage.

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


CSN: Fitch Assigns 'BB-' Rating to National Steel Bond Issuance
---------------------------------------------------------------
Fitch Ratings has assigned an international foreign currency
rating of 'BB-' to the proposed US$500 million perpetual notes
to be issued by National Steel S.A. (National Steel). National
Steel is a holding company that is 100% indirectly controlled by
Brazil's Steinbruch family and whose sole asset will consist of
100% of the redeemable preferred shares of Vicunha Acos (Acos).
Acos, in turn, is a holding company owning 100% of Vicunha
Siderurgia S.A. (Vicunha), a holding company that owns a 42.74%
controlling interest in Brazilian steel producer Companhia
Siderurgica Nacional (CSN). The perpetual notes have no fixed
maturity date but will become callable in whole on a quarterly
basis after five years. The Rating Outlook is Stable.

The rating of the notes reflects the financial strength of CSN,
Vicunha's sole operating subsidiary, and the expectation that
CSN's future free cash flow available for dividends will be
sufficient to allow National Steel to service its debt
obligations. Dividend payments by CSN of approximately US$140
million per year should allow National Steel to meet expected
annual debt service obligations of about US$50 million. CSN
distributed dividends totaling US$242 million and US$278 million
in 2004 and in 2003, respectively. National Steel's obligations
are structurally subordinated to those of CSN as its only source
of income consists of the dividends received indirectly from
CSN. Thus, the rating of National Steel's perpetual notes is
linked to CSN's 'BBB-' local currency rating.

National Steel benefits from CSN's solid credit fundamentals. In
2004, CSN generated consolidated operating EBITDA of US$1.5
billion, an increase of 86% compared with that of 2003 due
mainly to the strong steel price environment but also to the
company's improved value-added product mix with a larger portion
coming from galvanized steel. With total debt of US$2.8 billion
and cash of US$1.1 billion, CSN had a total debt-to-EBITDA ratio
of 1.9 times (x) and a net debt-to-EBITDA ratio of 1.1x in 2004.
Due to the company's expected strong cash flow generation, Fitch
expects CSN to maintain a total debt-to-EBITDA ratio of less
than 2.0 times (x) and a net debt-to-EBITDA ratio of less than
1.5x. CSN's free cash flow in 2005 is expected to be about
US$800 million.

The perpetual notes will be directly secured by a pledge from
Vicunha of 18% of the total outstanding common stock of CSN
(approximately 40% of their ownership position). Based on the
60-day average price of CSN's shares, the collateral currently
has an approximate market value of US$1.0 billion, or about two
times the perpetual notes issuance. In addition, Acos will
unconditionally and irrevocably guarantee the perpetual notes.
The obligation to guarantee the notes will rank pari passu with
all unsecured and unsubordinated obligations of Acos. The level
of debt at Acos is de minimis. While CSN will not financially
guarantee the perpetual notes, a change of control at CSN would
trigger a prepayment of the notes and failure of CSN or any of
its subsidiaries to pay indebtedness of US$25 million or greater
would constitute an event of default.

The terms of the perpetual notes prohibit the issuer (National
Steel), the guarantor (Acos), and Pledgor (Vicunha) from
incurring material additional indebtedness. The issuer will use
the net proceeds from the issuance to purchase equity redeemable
instruments to be issued by Acos. Acos will use the net proceeds
to purchase common shares of Vicunha. Vicunha, in turn, will use
the proceeds of this equity contribution from Acos to repay its
BRL1.2 billion in debentures due June 2012. Debt service
payments on the perpetual notes will be made from the dividends
received by National Steel via Acos and Vicunha from CSN.

With annual production capacity of 5.6 million tons of crude
steel, CSN ranks as one of the largest steel producers in Latin
America. The company's fully integrated steel operations,
located in the State of Rio de Janeiro in Brazil, produce steel
slabs and hot- and cold-rolled coils and sheets for the
automobile, construction, and appliance industries, among
others. CSN also holds leading market shares in the galvanized
and tin-mill products segments.

CONTACT: Anita Saha, CFA +1-312-368-3179, Chicago
         Joe Bormann, CFA +1-312-368-3349, Chicago
         Ricardo Carvalho +55-21-4503-2600, Rio de Janeiro

MEDIA RELATIONS: Chris Kimble +1-212-908-0226, New York


EMBRATEL: Directors Agree on Merge Operations with Two Companies
----------------------------------------------------------------
The directors of Embratel Participacoes S.A. (Embrapar), Latam
Brasil Participacoes S.A. (Latam Brasil) and Atlantis Holdings
do Brasil Ltda. (Atlantis) have declared themselves in full an
accord with the acquisition and merger of the operations, which
removes the possibility of requests for withdrawal of the
partners and shareholders from the said companies.

The companies have submitted their reasons for proposing that
the General Meeting of the aforementioned companies take place
on the October 24, 2005, for the purposes of the acquisition and
merger of Atlantis and Latam Brasil by Embrapar.

The directors of Embrapar are aware that the acquisition and
merger of these companies will create value for its
shareholders, since its implementation will contribute to the
development of its business activities and the activities of its
subsidiaries, Empresa Brasileira de Telecomunicacoes in
particular, both through an increase in its operations in
markets in which the company already has a strong presence and
though an expansion into other market sectors, notably the
provision of local telephony services to Small and Medium-Sized
Enterprises (SME) and Residential markets.

Furthermore, the tangible benefits will be augmented by the
alignment of interests between the shareholders of the companies
and the holding company - Telefonos de Mexico S.A., de C.V.
(Telmex), through the transformation of the Embrapar group into
the single channel for promoting Telmex's strategy for expansion
in the Brazilian telecommunications market, generating even
greater operational efficiency and commercial effectiveness.

The shareholders of Latam and Atlantis understand that, for the
above reasons, that the businesses currently provided by the
companies will be better developed with the acquisition and
merger.

The directors of the aforesaid companies note that the share and
quota exchange ratios were calculated in terms of the comparison
between the economic value of the companies to be acquired and
merged and the economic value of the acquiring company; these
values were calculated as the average value in the band
indicated in the valuation produced by the Banco ABN AMRO Real
S.A. (ABN AMRO), company with head office at Avenida Paulista,
n. 1374 - 3 floor, Bela Vista, Sao Paulo - SP, Corporate
Taxpayer Registry n. 33.066.408/0001 -15, NIRE no.
35.300.137.477, according to the discounted cash-flow criterion.

The exchange ratios calculated were: (i) for each (one) quota
issued by Atlantis, 35.1075 (thirty-five and one zero seven five
decimals) common registered shares issued by Embrapar; and (ii)
for each (one) share issued by Latam Brasil, 219.1087 (two
hundred and nineteen and one zero eight seven decimals) common
registered shares issued by Embrapar. Consequently, as a result
of the proposed acquisition and merger, the directors of these
companies note that:

- the current limited partners of Atlantis, in exchange for 100%
(one hundred per cent) of their quotas, which will be annulled
on conclusion of the proposed acquisition and merger, will
receive a total of 43,940,441,888 (forty-tree billion, nine
hundred and forty million, four hundred and forty-one thousand,
eight hundred and eighty-eight) common shares issued by
Embrapar.

- the current shareholders of Latam Brasil, in exchange for 100%
(one hundred per cent) of their shares, which will be annulled
on conclusion of the proposed acquisition and merger, will
receive a total of 186,512,208,082 (one hundred and eighty-six
billion, five hundred and twelve million, two hundred and eight
thousand, eighty two) common shares issued by Embrapar.

Additionally, the banks ABN AMRO and Citigroup Global Markets,
Inc. (Citigroup), company duly constituted in accordance with
the laws of the State of New York, United States of America,
with head office at 388 Greenwich Street, New York, New York
10013, have certified, from the financial point of view to
Embrapar shareholders, that the share exchange ratios
established by the acquisition and merger of the operations
described herein are fair.

After conclusion of said acquisition and merger, Embrapar's
capital will be increased in R$978,227,382.50 with the issue of
230,452,649,971 common shares to be transferred to the limited
partners of Atlantis and the shareholders of Latam Brasil, with
the result that Embrapar's capital will be divided into
988,758,654,307 registered shares without face value, comprising
512,480,331,944 common shares and 476,278,322,363 preferred
shares.

The Directors of Embratel Participacoes S.A. (Embrapar or the
Company), in compliance with the requirements of the CVM
(Brazilian Securities and Exchange Commission) Instructions nos.
358/2002 and 319/1999, here by publicly declares the following:

A - Introduction

The directors of Embrapar, as made known in the Disclosure of
Relevant Fact published on May 24, 2005, conducted studies which
confirmed the viability and the interest of the acquisition, by
the Company, (i) of the total capital stock of Telmex do Brasil
Ltda. (TDB) and (ii) a corporate stake corresponding to 37.1% of
the capital stock of Net Servicos de Comunicacao S.A. (NET),
owned by Telefonos de Mexico S.A. de C.V. (Telmex).

B - Implementation of the Acquisition

Having confirmed, after the conclusion of the aforementioned
studies, that it is in the interest of Embrapar to acquire the
said corporate shareholdings, its was agreed that the said
acquisition shall be implemented through the merger into
Embrapar of the companies Atlantis Holdings do Brasil Ltda.
(Atlantis), limited company with head office in the City and
State of Sao Paulo, at Avenida Alfredo Egidio de Souza Aranha,
n. 100, Bloco D, 5 floor, Room A, Corporate Taxpayer Registry n.
03.236.149/0001-62, NIRE 3521576279-6, holder of the total
shares representing the capital of TDB and (ii) Latam Brasil
Participacoes S.A. (Latam Brasil), stock corporation with head
office at Rua Regente Feijo, n. 166, 16 floor, room 1687-A,
Centro, City and State of Rio de Janeiro, Corporate Taxpayer
Registry n. 07165506/0001-08, NIRE 33.3.0027511-8, holder of
shares representing 37.1% of the capital stock of NET, noting
that 100% of the capital of these companies (Atlantis and Latam
Brasil) is owned, indirectly, by Telmex.

C - Reasons for the Acquisition and Merger

The valuation studies of NET and TDB allowed the Company's Board
of Directors to conclude that the acquisition through the merger
of the shareholdings in the said companies will be of add value
to Embrapar's shareholders, since its implementation will
contribute to the development of its business activities and the
activities of its subsidiaries, Empresa Brasileira de
Telecomunicacoes S.A. - Embratel (Embratel) in particular, both
through an increase in its operations in markets in which the
company already has a strong presence and though an expansion
into other market sectors, notably the provision of local
telephony services to Small and Medium-Sized Enterprises (SME)
and Residential markets, given that:

- in the case of TDB: the acquisition will enable the
integration of around 500 km. of urban fiber optic networks in 8
cities (especially Sao Paulo), connecting over 1,000 corporate
buildings, will allow Embratel at the same time: (i) increase
significantly its last-mile capillarity to provide services to
new corporate clients; and (ii) add a significant portfolio of
corporate clients, with a focus on providing integrated Voice,
Data and Internet services. This acquisition will also allow
additional financial earnings, deriving from operational and
administrative synergies.

- in the case of NET: the merger with Latam will imply the
acquisition of a stake in NET and the integration of Embrapar
with the shareholders agreement with NET and with its
controlling shareholder, GB Empreendimentos e Participacoes S.A.
(GB), obtaining the following benefits: (i) enable a closer
relationship between the two companies and the development of
joint opportunities, particularly with respect to the possible
use, by Embratel, of NET's network to provide integrated
telecommunication services, including local and long distance
telephony to a potential market of more than 6,700,000
residences and 700,000 SMEs within the NET network's area of
coverage, as well as significantly increasing the capillarity
for providing corporate services for accessing the more than
6,000 km. of fiber optic cable included in the NET network; and
(ii) ensure Embrapar the right to acquire the control of NET,
through the exercise of the call option, according to the terms
and conditions established in the shareholders' agreement of GB.

In addition to the tangible benefits mentioned above, the
merging of interests between the shareholders of Embrapar and
the holding company Telmex will enable the transformation of the
Embrapar into the single channel for promoting Telmex's strategy
for expansion in the Brazilian telecommunications market,
generating even greater operational efficiency and commercial
effectiveness.

D - Acquisition and Merger Conditions

For the reasons exposed above, Embrapar's Directors decided to
propose to its shareholders, in an extraordinary general meeting
convened to take place on October 24, 2005, the merger into
Embrapar of Atlantis and Latam Brasil, through the transfer of
the book value net worth of Atlantis and Latam Brasil to
Embrapar (the Acquisition and Merger).

Consequently, shareholders are thereby notified and the market
in general of the conditions of the Acquisition and Merger
Proposal, which will be submitted for approval by the
shareholders and partners of the companies involved within the
pertinent legal deadlines.

E - Objectives of the Operation

The Acquisition and Merger forms are an integral part of a
process of developing the activities of Embratel in the
provision of telecommunications services.

The Acquisition and Merger will occur so that Embrapar will
receive - for their respective book values - the total assets,
rights and obligations of Atlantis and Latam Brasil. As a result
of the Acquisition and Merger, Embrapar will increase the book
value of its net worth by a sum equivalent to the book values of
Atlantis and Latam Brasil.

F - Acts preceding the operation

In addition to the aforementioned studies and the acts required
to convene the extraordinary general meetings of the
shareholders of Embrapar and Latam Brasil and the partners
meeting of Atlantis, which will decide on the Acquisition and
Merger, the directors of the companies involved have signed the
Acquisition and Merger Protocol and Reasons for the acquisition
presented to the shareholders and partners of the companies
involved.

G - Exchange ratio, number and kind of shares to be issued to
the shareholders of Latam Brasil and the limited partners of
Atlantis and rights of the shares

The shareholders of Latam Brasil will be issued, in exchange of
the 100% shares in their ownership, representing the total
capital of the latter company, a total of 186,512,208,082 common
registered shares issued by Embrapar, which will be entitled to
the same rights and advantages attributed to the common
registered shares issued by Embrapar already in circulation and
which will share in the income of the financial year in progress
in proportion to the period following their date of issue,
therefore translating as an exchange ratio of 219.1087 common
shares issued by Embrapar in substitution for each share issued
by Latam Brasil, annulled as a result of the takeover. This
share exchange ratio was established at the mid-point of the
band indicated in the economic valuation of the two companies
undertaken by the Banco ABN AMRO Real S.A. (ABN AMRO), company
with head office at Avenida Paulista, n. 1374 - 3 floor, Bela
Vista, Sao Paulo - SP, Corporate Taxpayer Registry n.
33,066,408/0001-15, NIRE no. 35,300,137,477; this evaluation,
taking into account the discounted cash flow of Latam Brasil and
Embrapar, arrived at the following values: (i) R$1.205 billion
for Latam Brasil and R$4.847 billion for Embrapar. Additionally,
the banks Citigroup Global Markets, Inc. (Citigroup), company
duly constituted in accordance with the laws of the State of New
York, United States of America, with head office at 388
Greenwich Street, New York, New York 10013, and ABN AMRO
certified from the financial point of view to Embrapar
shareholders, the fairness of the established share exchange
ratio. As stipulated in the final part of art. 264 of the
Corporate Law n 6404/76 (LSA), and due to the fact that Latam
Brasil is controlled by the same shareholder as Embrapar, the
company Aval Consult Engenharia de Avaliacoes Ltda. (Consult),
with head office at Rua Tabapua 821 - 1st floor, Block 22, City
and State of Sao Paulo, Corporate Taxpayer Registry n.
48.882.971/0001-39, with the Sao Paulo Regional Economic Council
(CORECON/SP) n. RE/5.279, with the Sao Paulo Federal
Engineering, Architecture and Agronomy Council (CREA/SP) n.
0209030, undertook the valuation, at market prices, of the
assets of both companies (Embrapar and Latam Brasil), which
shows that the share exchange ratio established is not less
favorable for the shareholders of Latam Brasil.

The limited partners of Atlantis will be issued, in 100%
exchange of the shares in their ownership, representing the
total capital of the latter company, a total of 43,940,441,888
common registered shares issued by Embrapar, which will be
entitled to the same rights and advantages attributed to the
common registered shares issued by Embrapar already in
circulation and which will share in the income of the financial
year in progress in proportion to the period following their
date of issue, therefore translating as an exchange ratio of
35.1075 common shares issued by Embrapar in substitution for
each share of the capital stock of Atlantis, annulled as a
result of the merge. This share exchange ratio was established
at the mid-point of the band indicated in the economic valuation
of the two companies undertaken by ABN AMRO, this valuation,
taking into account the discounted cash flow of Atlantis and
Embrapar, arrived at the following values: R$271 million for
Atlantis and R$4.847 billion for Embrapar. Additionally, the
Citigroup and ABN AMRO banks certified the fairness of the
established share exchange ratio from the financial point of
view.

As stipulated in the final part of art. 264 of the Corporate Law
(LSA), and due to the fact that the owner of the majority of the
capital of Atlantis is the shareholder that controls Embrapar,
Consult undertook the valuation, at market prices, of the assets
of both companies (Embrapar and Atlantis), which shows that the
share exchange ratio established is not less favorable for the
limited partners of Atlantis.

Embrapar was informed by ABN AMRO, by Consult and by Citigroup
that any actual or potential conflict or communion of interests
does not exist with the holding company of Embrapar, Atlantis
and Latam Brasil, or in relation to the present Acquisition and
Merger.

H - Criteria for valuation of the net worth of Atlantis and
Latam Brasil and treatment of changes in equity

The net worth of Atlantis will be acquired at book value, taking
as a basis the elements listed in the audited balance sheet
produced on June 30, 2005 (Base Date). The Acquisition and
merger will be based on the net worth value of Atlantis,
supported by the valuation study already produced by Consult.
The changes in equity of Atlantis, extracted from the Base Date
and up to the date on which the Acquisition and Merger is
effected will be appropriated by Embrapar.

The net worth of Latam Brasil will be acquired at book value,
taking as a basis the elements listed in the audited balance
sheet produced on June 30, 2005 (Base Date). The Acquisition and
the Merger will be based on the net worth value of Latam Brasil,
supported by the valuation study already produced by Consult.
The changes in equity of Latam Brasil, extracted from the Base
Date and up to the date on which the Acquisition and Merger is
effected will be assumed by Embrapar.

I - Increase in the capital stock of Embrapar and ownership of
the capital stock and shares after the Acquisition and Merger

The book value of the net worth of Atlantis is R$188,113,341.80,
while the book value of the net worth of Latam Brasil is
R$790,114,040.70. Therefore, the acquisition and merger of the
net worth of Atlantis and the net worth of Latam Brasil will
result in an increase in the net worth of Embrapar to the sum of
R$978,227,382.50 and in a consequent increase in its capital
stock by the same value through the issue of 230,452,649,971 new
ordinary shares.

The capital stock of Embrapar will be divided into
88,758,654,307 registered shares without face value, comprising
512,480,331,944 common shares and 476,278,322,363 preferred
shares.

J - Absence of dissent among the limited partners of Atlantis
and the shareholders of Latam Brasil

The Directors of Embrapar were informed that all the limited
partners of Atlantis and all the shareholders of Latam Brasil
agree to the realization of the Acquisition and Merger, meaning
the reimbursement value of the shareholdings which they own in
the aforementioned companies will no longer be informed, since
this information is inapplicable to the Acquisition and Merger.

K - Costs

The estimated costs to Embrapar of undertaking the Acquisition
and Merger operation will be on the order of approximately
R$5,000,000.00, including expenses relating to publications,
auditors, evaluators, lawyers and other technical experts
contracted to advise on the transaction.

L- Other information on the operation

The enactment of the Acquisition and Merger will lead to the
extinction of Atlantis and Latam Brasil, and the transfer to
Embrapar of all their assets, rights and obligations.

The registration as a publicly traded company of, Embrapar, at
the Securities and Exchange Commission, will be maintained.
The National Telecommunications Agency (Anatel), consulted in
advance, has stated that the terms and conditions for the
Acquisition and Merger are in accordance to the applicable law,
and all approvals required were obtained. The implementation of
the Acquisition and Merger does not relay on any other
governmental approval.

M - Availability of documents

3.1. Finally, we communicate that: (i) the Protocol and Reasons;
and (ii) the financial statements which served as the basis for
calculating the net worth of the companies involved in the
transaction, in the Base Date (audited, in the form of art. 12
of CVM Instruction n. 319 - in the Acquisition and Merger date),
as well as all other documents cited in art. 3 of the same norm,
will be sent to the Securities and Exchange Commission and the
Sao Paulo Stock Exchange and will be available from October 4,
2005 on the Internet - at the address: www.embratel.com.br/ir -
or at the company head office of Embrapar, located at Av.
Presidente Vargas, n. 1012, in the City and State of Rio de
Janeiro; where shareholders must appear in person with proof of
their status as shareholder or through a duly assigned attorney
on working days between 10:00 a.m. and 5:00 p.m.

Shareholders from the Fungible Custody of Registered Shares of
the Stock Exchange who wish to visit must present a statement
issued at most two days prior to their visit, containing the
respective stock holding.

Protocol for the Acquisition and Merger of Atlantis Holdings do
Brasil Ltda. and Latam Brasil Participacoes S.A. by Embratel
Participacoes S.A.

I - Parties

1. The PARTIES to this document are, on one hand, in its
condition as (1.1.) First Merged Company, Atlantis Holdings do
Brasil Ltda. (Atlantis), limited company, with head office in
the City and State of Sao Paulo, at Avenida Alfredo Egidio de
Souza Aranha, n. 100, D Block, 5 floor, Room A, Corporate
Taxpayer Registry n. 03,236,149/0001-62, NIRE 3521576279-6,
hereby represented in the form of the provisions found in its
Partnership Agreement; in its condition as (1.2.) Second Merged
Company, Latam do Brasil Participacoes S.A. (Latam Brasil),
stock corporation with head office at Rua Regente Feijo, n. 166,
16 floor, room 1687-A, Centro, City and State of Rio de Janeiro,
Corporate Taxpayer Registry n. 07,165,516/0001-08, NIRE
3330027511-8, hereby represented in the form of the provisions
found in its Articles of Incorporation; and, in its condition as
(1.3.) Merging Company, Embratel Participacoes S.A. (Embrapar),
company with head office at Rua Regente Feijo n 166/1687-B,
Centro, Rio de Janeiro - RJ, Corporate Taxpayer Registry no
02,558,124/0001-12, NIRE 3330026237-7, hereby represented in the
form of the provisions found in its Articles of Incorporation.

II - Conditions of the Acquisition and Merger Transactions to be
realized

2.1. The Acquisition and Merger of Atlantis and Latam Brasil by
Embrapar will be deliberated, at General Meetings of their
partners and shareholders, to be held on October 24, 2005, under
the following conditions:

2.1.1. The Base Date for the Acquisition and Merger will be June
30, 2005.

2.1.2. The Acquisition and Merger hereby agreed will be effected
taking into account the book value of the net worth of Atlantis
and Latam Brasil on the Base Date, in accordance with the
appraisal produced by Aval Consult Engenharia de Avaliacoes
Ltda. (Consult), with head office at Rua Tabapua, 821 - 1st
floor, suite 22, City and State of Sao Paulo, Corporate Taxpayer
Registry n. 48,882,971/0001-39 with the Sao Paulo Regional
Economic Council (CORECON/SP) n. RE/5,279, with the Sao Paulo
Federal Engineering, Architecture and Agronomy Council (CREA/SP)
n. 0209030, based on the financial statements of the said
companies collated on the Base Date, that is:

a) the book value of the net worth of Atlantis, on the Base
Date, is R$188,113,341.80

b) while the book value of the net worth of Latam Brasil, on the
Base Date, is R$790,114,040.70.

2.1.3. The changes in equity, whether positive or negative, of
Atlantis and Latam Brasil, calculated from the Base Date to the
date on which the Acquisition and Merger is effectuated, will be
assumed by Embrapar.

2.2. The net worth of Atlantis and Latam Brasil were evaluated
by Consult, taking into account the book values, recorded in the
financial statements of the said companies, collated on the Base
Date.

2.3. After acquisition and merger, Embrapar will increase its
capital stock by the value of R$978,227,382.50, which
corresponds to the book value net worth of Atlantis and Latam
Brasil, and will issue 230,452,649,971 common shares, without
face value, to be allocated to the partners of Atlantis and the
shareholders of Latam Brasil, in exchange for the quotas and
shares to be annulled in these companies as a result of the
acquisition and merger.

2.4. The share and quota exchange ratios were calculated in
terms of the comparison between the economic value of the
companies to be merged and the economic value of the acquisition
and merger company; these values were calculated as the average
value in the band indicated in the evaluation produced by the
Banco ABN AMRO Real S.A. (ABN AMRO), company with head office at
Avenida Paulista, n. 1374 - 3 floor, Bela Vista, Sao Paulo - SP,
Corporate Taxpayer Registry n. 33,066,408/0001-15, NIRE no.
3530013747-7, according to the discounted cash-flow criterion of
Embrapar, Atlantis and Latam. The exchange ratios determinate by
the Companies related with acquisition and merger were
calculated: (i) for each (one) quota issued by Atlantis, 35.1075
common registered shares issued by Embrapar; and (ii) for each
share issued by Latam Brasil, 219.1087 common registered shares
issued by Embrapar.

2.4.1. The limited partners of Atlantis will be issued, in 100%
exchange of the quotas in their ownership, representing the
total capital of the latter company, and to be annulled in the
act of acquisition and merger, a total of 43,940,441,888 new
common registered shares issued by Embrapar, which will be
entitled to the same rights and advantages attributed to the
common registered shares issued by Embrapar already in
circulation and which will share in the income of the financial
year in progress in proportion to the period following their
date of issue.

2.4.2. The shareholders of Latam Brasil will be issued, in 100%
exchange of the shares in their ownership, representing the
total capital of the latter company, and to be annulled in the
act of acquisition and merger, a total of 186,512,208,082 new
common registered shares issued by Embrapar, which will be
entitled to the same rights and advantages attributed to the
common registered shares issued by Embrapar already in
circulation and which will share in the income of the financial
year in progress in proportion to the period following their
date of issue.

2.5. After conclusion of the intended acquisition and merger,
Atlantis and Latam Brasil will be dissolved, with the transfer
to Embrapar of all their rights and obligations; the directors
of Embrapar will be responsible for ensuring the filing of the
corporate acquisition and merger acts, in compliance with
current legislation.

2.6. Embrapar, through its directors and as merging company of
Atlantis and Latam Brasil, will be responsible for: (i) keeping
the tax accounting records of Atlantis and Latam Brasil; (ii)
ensuring the write-off of the establishments of Atlantis and
Latam Brasil with respect to the tax authorities; (iii) the
filing and publication of the acts of the present operation; and
(iv) practicing all the acts necessary for the proper
fulfillment of the intended acquisition and merger, under the
terms of the provisions of sections I and II of article 10 of
Normative Instruction n. 88 of the Federal Trade Registry
Department - DNRC, of August 2, 2001.

2.7. Following approval of the acquisition and merger herein
agreed, the Articles of Incorporation of Embrapar will be
altered to reflect the new value of the company's capital stock,
as well as the number of shares into which it will be divided,
in accordance with the Draft of the Articles of Incorporation
which, duly signed by the Parties, forms part of the present
document as Annex n. I.

2.8. The parties note that, following prior consultation, all
the limited partners of Atlantis, along with all the
shareholders of Latam Brasil, have declared themselves to be in
full accord with the acquisition and merger operation hereby
agreed, which removes any basis for requests for withdrawal of
the partners and shareholders from the said companies.

In witness whereof, the Parties hereby sign the present
document, in three identical copies, along with the undersigned
witnesses, choosing as jurisdiction for settling any dispute
relating to this document the Court of the City of Rio de
Janeiro, State of Rio de Janeiro, waiving recourse to any other
legal authority.
Rio de Janeiro, September 30, 2005

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


EMBRATEL: Shareholders to Vote on Acquisition Agreement
-------------------------------------------------------
The shareholders of Embratel Participacoes S.A. will vote on the
Management's proposal for the Company's acquisition and merger
of Atlantis Holdings do Brasil Ltda. and Latam Brasil
Participacoes S.A. during an Extraordinary General Meeting to be
held at the Company's head office in Rio de Janeiro on October
24, 2005 at 4:00 p.m.

The shareholders will also discuss on:

(i) Appraise the Reasons for the acquisition and merger, by the
Company, of Atlantis Holdings do Brasil Ltda. and Latam Brasil
Participacoes S.A.

(ii) Deliberate on the acquisition and merger Protocol agreed by
the directors of the said companies.

(iii) Appraise the findings of the company's Fiscal Council
concerning the proposal for the acquisition and merger, by the
Company, of Atlantis Holdings do Brasil Ltda. and Latam Brasil
Participacoes S.A.

(iv) Ratify the choice, made by the company's directors, of Aval
Consult Engenharia de Avaliacoes Ltda. to act as the specialized
company that, under the terms of existing legislation, was
assigned the task of evaluating the net worth of the companies
to be acquired and merged.

(v) Ratify the choice, made by the company's directors, of Banco
ABN AMRO Real S.A., to act as the specialized company assigned
with the task of valuating the economic value of the companies
involved in the operation, in order to determine the exchange
ratio of the shareholdings of the companies to be annulled
through merger with the Company.

(vi) Ratify the choice, made by the company's directors, of Aval
Consult Engenharia de Avaliacoes Ltda., to undertake the
valuation, at market prices, of the assets of both companies
involved in the operation.

(vii) Examine and deliberate on the respective valuation
reports.

(viii) Deliberate on the acquisition and merger, by the company,
of Atlantis Holdings do Brasil Ltda. and Latam Brasil
Participacoes S.A., with the dissolution of the merged
companies, giving to the Executive Board power to carry out all
necessary acts to realize the proposed acquisition and merger,
including approving the increase in the Company's capital stock
resulting from transfer of the net worth to be acquired.

(ix) Deliberate on the alteration of the Company's Bylaws, to
reflect the adopted decisions, especially in relation to the new
value of the capital stock and the number of shares into which
the latter will be divided.

(x) Approve the restatement of the Company's Bylaws.

General Instructions:

(a) The following items are made available to shareholders from
October 4th 2005: (i) the Protocol and Reasons for the
acquisition; (ii) the financial statements used to calculate the
net worth of the companies involved operation, and (iii) all
other documents cited in art. 3 of CVM Instruction n. 319, at
the Company's head office, located at Av. Presidente Vargas, n.
1012, in the city of Rio de Janeiro, Rio de Janeiro State.

(b) The power of attorney with special powers for representation
at the meeting to which the present notice relates must be
deposited at the Company's head office, in the Legal Department,
no later than 48 (forty-eight) hours before the meeting is to be
held.

(c) The shareholders of the Fungible Custody of Registered
Shares of the Stock Exchange who wish to take part in this
meeting must present an extract issued no later than 2 (two)
days prior to the meeting, containing the respective stock
holding.


GERDAU: Completes $200M Sale of Commercial Paper
------------------------------------------------
Steelmaker Gerdau (GGB) completed Monday an issue of commercial
paper worth US$200 million, reports Dow Jones Newswires.

The amount is US$50 million more than the amount that the
Company had expected when it launched the operation last week.

According to the report, the Company increased the issuance due
to heavy demand for the paper, which matures in October 2006 and
will pay an annual yield of 5%.

Banco Santander coordinated the operation, which is part of a
program to issue a total of US$300 million. Gerdau will use the
money to refinance its existing debts.

CONTACT: Gerdau S.A.
         Press Office
         Phone: 55(51) 3323-2170
         E-mail: imprensa@gerdau.com.br
         URL: www.gerdau.com.br


HSBC BANK BRASIL: Moody's Affirms B2 FC Bank Deposit Rating
-----------------------------------------------------------
Moody's Investors Service assigned an A3 global local-currency
deposit rating and an Aaa.br Brazilian national scale deposit
rating to HSBC Bank Brasil -- Banco Multiplo S.A (HSBC). In
addition, Moody's assigned a Prime-2 short-term global local-
currency deposit rating and a BR-1 Brazilian national scale
short-term deposit rating to HSBC. All ratings have stable
outlooks.

Moody's also affirmed HSBC Bank Brasil's financial strength
rating of D+, with a stable outlook, as well as the foreign-
currency bank deposit rating of B2, which has a positive
outlook. The foreign currency deposit rating is constrained by
Brazil's country ceiling for bank deposits.

The A3 deposit rating on Moody's global local-currency scale
compares the issuer with all other issuers in the world, and
incorporates all Brazil- related risks, including the volatility
of the Brazilian economy, but excluding convertibility risk. By
way of comparison, Moody's global local-currency scale rating
for domestic debt issued by the Brazilian government is Ba3.

National scale ratings rank Brazilian issuers relative to each
other and not relative to absolute default risks; therefore,
they do not address loss expectations associated with systemic
events that could affect all issuers, even those that receive
the highest ratings on the national scale. An Aaa.br rating on
Moody's Brazil National Scale solely indicates an issuer or
issue with the strongest creditworthiness and the lowest
likelihood of credit loss relative to other domestic issuers.

Moody's ratings reflect HSBC Bank Brasil's creditworthiness and
its position as the sixth-largest private institution in the
Brazilian banking system, with market shares of 4.5% of the
system's deposits. Moody's, therefore, believes the bank would
enjoy government support in the event of unanticipated stress
because it may be considered "too important to fail" in the
Brazilian environment. The importance and scale of the bank's
market activity, as well as the systemic consequences of its
failure, are among the considerations implying the
predictability of institutional support.

Moody's notes that HSBC Brasil, in line with HSBC policy, does
not carry any formal parental support. However, an orderly
management of the operation in a situation of stress would be
expected, and in line with the group's track record.

HSBC Brasil is an indirect wholly-owned subsidiary of HSBC
Holdings plc. HSBC Holdings has identified Brazil as one of the
emerging markets with attractive growth characteristics. The
bank's enlarged scope and scale, achieved through the
acquisition of a dominant consumer- finance operation -- Losango
-- in 2003, provide the framework for HSBC's strategic focus on
consumer finance, and the potential for leveraging such a
platform to additional corporate, middle- market, and small
businesses.

The bank is headquartered in Curitiba, Brazil, and as of June
2005, it held total assets of R$47 billion (approximately US$19
billion).

Moody's assigned the following ratings to HSBC Bank Brasil --
Banco Multiplo S.A.

Global Local- Currency Ratings -- A3 long-term local-currency
deposit rating (global scale) and Prime-2 short-term local-
currency deposit rating (global scale). Outlook is stable.

National Scale Deposit Ratings - Aaa.br long-term deposit
rating, and BR-1 short-term deposit rating. Outlook is stable.


NII HOLDINGS: Announces Convertibility of Notes Due 2033, 2034
--------------------------------------------------------------
NII Holdings, Inc. (Nasdaq: NIHD) (the "Company") announced
Monday that both its 3 1/2% Convertible Notes due 2033 and its 2
7/8% Convertible Notes due 2034 (collectively, the "Notes")
issued pursuant to indentures between the Company and Wilmington
Trust Company, as Trustee, dated September 16, 2003 and January
30, 2004, respectively (collectively, the "Indentures"), will be
convertible pursuant to section 14.01(a)(i) of the Indentures.
Holders of the Notes may convert the Notes into shares of the
Company's common stock during the next fiscal quarter (October
1, 2005 until December 31, 2005) at the applicable conversion
rate then in effect.

NII Holdings, Inc., a publicly held company based in Reston,
Va., is a leading provider of mobile communications for business
customers in Latin America. NII Holdings, Inc. has operations in
Argentina, Brazil, Mexico and Peru, offering a fully integrated
wireless communications tool with digital cellular service,
text/numeric paging, wireless Internet access and Nextel Direct
Connect(R), a digital two-way radio feature. NII Holdings, Inc.
trades on the Nasdaq market under the symbol NIHD.

Nextel, the Nextel logo, Nextel Online, Nextel Business Networks
and Nextel Direct Connect are trademarks and/or service marks of
Nextel Communications, Inc.

CONTACT: NII Holdings, Inc.
         Investor Relations
         Tim Perrott
         Phone: (703) 390-5113
         E-mail: tim.perrott@nii.com

         Media Relations
         Claudia E. Restrepo
         Phone: (786) 251-7020
         E-mail: claudia.restrepo@nii.com

         URL: http://www.nii.com



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

MANQUEHUE NET: Grupo GTD Wraps Up $25M Acquisition
--------------------------------------------------
Chilean telecoms holding company Grupo GTD has closed the
US$24.8-million acquisition of local telco Manquehue Net,
reports Business News Americas.

GTD acted through its GTD Teleductos, GTD Telesat and GTD
Internet branches, which have acquired 48%, 48% and 2% of
Manquehue, respectively.

Shortly after closing the acquisition, GTD made new executive
appointments at Manquehue Net.

Luis Alberto Dominguez has been selected as the operator's new
general manager, while Juan Manuel Casanuevas - general manager
at GTD Teleductos - was named Manquehue Net president.

GTD also revoked the entire board of directors at Manquehue. The
new board plans to hold a shareholders meeting October 19, at
which time, GTD plans to receive authorization to reduce from 11
to five the number of directors.

Following the acquisition, Fitch Ratings raised its risk rating
to BBB- from BB+ Manquehue Net's debt totaling CLP30 billion
(US$56.6mn) due 2009.

On the other hand, Fitch reduced the solvency rating for GTD
Teleductos, Manquehue's new controller, from A+ to A. Fitch said
even though the transaction represents growth potential for the
GTD, it leaves the company with a larger debt.

Fitch said Manquehue Net is not likely to report dividends in
the next five years.


RENTA NACIONAL: Supreme Court Denies Request for Injunction
-----------------------------------------------------------
The Supreme Court rejected local insurance company Renta
Nacional's request for an injunction against rating agencies
Feller Rate and Humphreys, reports Business News Americas.

Renta Nacional had requested for an injunction against Feller
Rate and Humphreys after both agencies slashed the Company's
rating to below BBB because its investment portfolio had too
many assets in businesses affiliated to the insurer's parent,
the local Errazuriz group.

The downgrade prohibited Renta Nacional from selling life
annuities pursuant to a January 2001 solvency ruling by the
securities and insurance regulator, the SVS, forbidding insurers
from selling annuities if they had a weaker rating than BBB.

As a result, Renta Nacional filed an injunction against the
rating agencies claiming their downgrades violated the Company's
constitutional right to exercise any economic activity.

Earlier this year, Feller Rate withdrew all ratings on Renta
Nacional as the insurer did not renew the contract.

Renta Nacional saw premiums drop 91% in the first half of the
year to CLP1.69 billion (US$3.19 million) compared to the same
period last year.



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

GRANBANCO-BANCAFE: Fitch Assigns LTFC Rating of 'BB'
----------------------------------------------------
Fitch assigned Monday support ratings to Granbanco S.A.
(Granbanco-Bancafe) of '3'. At the same time, Fitch has
withdrawn the support rating of '3' assigned to Banco Cafetero.
The support rating reflects our assessment of the probability
that the bank would receive support in the case it were
necessary. Fitch believes that the probability of support for
Granbanco-Bancafe, should it be required, is moderate. This
reflects Fitch's view that the government has a strong interest
in supporting Granbanco given Granbanco's indirect government
ownership, the strong history of government support for the
banking system in Colombia, and Granbanco's relevant deposit
market share. Nevertheless, its ability to provide support is
somewhat restricted by public finances (long-term foreign
currency rating of 'BB' by Fitch).

Granbanco is a new legal entity created in the first quarter of
2005 through an operation orchestrated by the government whereby
a small investment portfolio from Granahorrar, another state-
owned bank, was ceded and combined with the bulk of the assets
held by Banco Cafetero (Bancafe); these assets, as well as the
bulk of Banco Cafetero's deposits and capital base, were
incorporated into Granbanco. Banco Cafetero maintained all labor
contracts and pension obligations, as well as a small investment
portfolio, and will be liquidated within two years. Granbanco,
which will maintain Banco Cafetero's clients and commercial
contracts, as well as the Bancafe brand, received an additional
capital injection of COP430 billion, which was combined with
capital of COP202 billion received from Banco Cafetero.

Granbanco Bancafe is Colombia's sixth largest bank by assets
(end of June 2005 deposit market share: 6.2%) and is 99% owned
by FOGAFIN, the state-controlled deposit guarantee fund. Banco
Cafetero was founded in 1953 to finance the production and
export of coffee and other agricultural products by the Fondo
Nacional del Cafe (a quasi-government entity) and was taken over
by FOGAFIN in 1999 due to mounting losses and weak capital.

CONTACTS: Linda Hammel +1-212-908-0303, New York
          Peter Shaw +1-212-908-0553, New York

MEDIA RELATIONS: Chris Kimble +1-212-908-0226, New York



===================
C O S T A   R I C A
===================

ICE: Comptroller Approves Contracts Signed with Artinsoft
---------------------------------------------------------
The two contracts that state telecoms and electricity monopoly
ICE awarded to ArtinSoft Zona Franca two years ago finally
gained approval from the comptroller, reports Business News
Americas.

The comptroller, however, specified it still expects ICE to
respond to several observations the entity made about the
contracts, which led to the hold up in their approval.

ICE and ArtinSoft Zona Franca signed two contracts in 2003,
under which the local unit of U.S.-based software firm will put
ICE's customer service (SIMO) and billing systems (GITEL) on an
integrated telephony management platform, at a cost of US$3.3
million for each service.

In November 2004, the comptroller blocked the contract, arguing
that the capacity of the system proposed by ArtinSoft should be
above and beyond the basic requirements of the auction rather
than merely meeting the minimum requirements.

In a second ruling in May this year, the comptroller asked ICE
for a new test demonstrating the capacity and efficiency of the
proposed software as well as details of the parameters used in
the test.

ArtinSoft Zona Franca's director Carlos Araya has reiterated to
local press that ArtinSoft carried out the tests requested by
the comptroller when ICE studied the offers during the auction
in 2003 and that the results were satisfactory.

Reacting to the news, Araya told the newspaper that he was
waiting for new tests from ICE in accordance with the
comptroller's observations and added that Artinsoft was
interested in bidding for similar contracts in Costa Rica in the
future.

The deferment of the comptroller's approval on the ArtinSoft
contracts had prompted ICE to consider extending a contract with
US IT company Unisys (NYSE: UIS) to implement the telephony
platform. The three-year contract extension would reportedly
have cost ICE US$11 million - 15 million.

Araya has argued that ICE is losing US$1mn a month due to the
inefficiency of its outdated systems.



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

DYOLL INSURANCE: Creditors to Get 17% of Outstanding Claim
----------------------------------------------------------
The joint liquidators of Dyoll Insurance Company Limited
announced Saturday that the Company's creditors will be paid 17%
of their outstanding claims by October 31, the Jamaica Observer
reports.

The liquidators - Kenneth Krys of RSM Cayman and John Lee of
PricewaterhouseCoopers - stressed that the payment is an interim
one.

"It is expected that there will be additional interim payments
until the process of liquidation is completed," the liquidators
said without giving a timeframe.

This month's payment will be offered only to those creditors who
complied with previous notices sent out on behalf of Dyoll
requesting that claimants file proof of debt. They would have
already had to make declarations stating the amount owed to
them, accompanied by supporting evidence.

The liquidators also explained that Dyoll, in each case, must
agree to the amount claimed before any money will be paid out.

"The process of filing proofs of debt will be ongoing, but
preference must be given in the first instance to those who have
made the effort to respond to the previous notices," the
liquidators in a statement issued to the media.

As of July 22, 2005, Dyoll Insurance had liabilities of $2.5
billion and total assets of $1.6 billion, not all of which are
convertible, such as tax recovered of $48 million and accounts
receivable of $403.5 million due to the difficulty that may
occur in collecting these receivables.



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

TV AZTECA: BoNY Concludes Sale of CPOs Underlying ADRs
------------------------------------------------------
TV Azteca, S.A. de C.V. (BMV: TVAZTCA; Latibex: XTZA), one of
the two largest producers of Spanish-language television
programming in the world announced Monday that, The Bank of New
York (BoNY) concluded the sale -- in the Mexican Stock Market
(BMV) -- of TV Azteca Certificados de Participacion Ordinaria
(CPOs) underlying American Depositary Receipts (ADRs) that were
not surrendered by holders within a predetermined timeframe, in
the process of termination of the ADR program that the company
had in the United States.

As has been detailed in prior company press releases, ADR
holders had a 60 day period -- from July 18, 2005 to September
16, 2005 -- to exchange their ADRs for CPOs traded on the BMV.
On September 19, 2005, BoNY started to sell the CPOs underlying
the ADRs that were not surrendered. The selling process of such
CPOs by BoNY has concluded, and there are no remaining CPOs
underlying ADRs that were not surrendered within the 60 day
period.

The company had previously announced that at an Extraordinary
Shareholders' Meeting held on June 1, 2005, 99.85% of TV
Azteca's shareholders approved the termination of the ADR
program, after an analysis and discussion of the costs and
benefits of continuing listed on a U.S. national securities
exchange.

Company Profile

TV Azteca is one of the two largest producers of Spanish
language television programming in the world, operating two
national television networks in Mexico, Azteca 13 and Azteca 7,
through more than 300 owned and operated stations across the
country. TV Azteca affiliates include Azteca America Network, a
new broadcast television network focused on the rapidly growing
US Hispanic market, and Todito.com, an Internet portal for North
American Spanish speakers.

Except for historical information, the matters discussed in this
press release are forward-looking statements and are subject to
certain risks and uncertainties that could cause actual results
to differ materially from those projected. Risks that may affect
TV Azteca are identified in its Form 20-F and other filings with
the US Securities and Exchange Commission.

CONTACT:  Investor Relations:
          Bruno Rangel
          Tel: + 52 (55) 1720 9167
          E-mail: jrangelk@tvazteca.com.mx

          Rolando Villarreal
          Tel: + 52 (55) 1720 0041
          E-mail: rvillarreal@gruposalinas.com.mx

          Press Relations:
          Tristan Canales
          Tel: + 52 (55) 1720 1441
          E-mail: tcanales@gruposalinas.com.mx

          Daniel McCosh
          Tel: + 52 (55) 1720 0059
          E-mail: dmccosh@tvazteca.com.mx



=================================
T R I N I D A D   &   T O B A G O
=================================

BWIA/LIAT: T&T Government Rejects Merger
----------------------------------------
There will be no merger of operations of Trinidad & Tobago's
national carrier BWIA Airways and regional airline LIAT despite
insistent calls from Caribbean tourism executive and industry
experts.

After months of deliberations, T&T Finance Minister Conard Enill
announced at a post-cabinet briefing on Friday that the
government has rejected the project.

Instead, the government decided to form a new airline under the
chairmanship of businessman Arthur Lok Jack, who headed the
special team set up by the government to recommend what to do
with BWIA.

According to Minister Enill, any merger with the two airlines at
this time will be a major financial risk considering the size
and maintenance of operations.

Mr. Enill said there are some very specific things that will
allow such a joint venture to succeed but he is not sure a
merger will bring about the desired result.

The Caribbean Hotel Association (CHA) has urged regional
governments to go for full operational integration of their
airlines to solve the problems that are hurting the industry and
affecting tourism.

However, he said the government is primarily concerned about
ensuring that BWIA was properly restructured and financially
secured. Mr. Enill added that the government has had to learn
some hard lessons in the past on the restructuring of similar
state enterprises.

Last week, the Patrick Manning administration has appropriated
some US$250 million for the restructuring of the beleaguered
national carrier, but this does not include a merger with LIAT.

The government would not release any money unless and until a
management review was done showing how the carrier could be
profitable.

LIAT has been seeking some sort of merger with BWIA, which
already owns 29% of LIAT and handles its customer service calls
and other functions.



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

URAGUA: OSE to Assume Services October 8
----------------------------------------
State water utility OSE will take over the water and sewerage
services of private water operator Uragua on October 8, reports
Business News Americas.

The takeover follows an agreement reached between both parties
last week. Under the agreement, OSE will serve consumers in the
areas that Uragua has controlled, while the latter will drop the
lawsuit it had brought against the state demanding compensation.

OSE will be taking control of Uragua's assets estimated to be
worth US$15 million, but will also assume debts of around
US$600,000. It will also pay Uragua US$1.5 million for water
services provided and charge US$800,000 for the canon, which has
not been paid. Uragua will also keep the contract guarantees,
which are worth some US$15 million.

For the first month, Uragua executives will assist OSE to
facilitate smooth transition.



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

ROYAL SHELL: Appoints New E&P VP for Local Unit
-----------------------------------------------
The Venezuelan arm of Royal Dutch Shell PLC appointed Luis Prado
as new vice president of exploration and production, reports Dow
Jones Newswires.

Prado, who replaces Cor Zegelaar, who was promoted to general
manager of Shell Petroleum Development Co. in Nigeria, will be
responsible for finalizing the terms of a new joint-venture
company with state-run Petroleos de Venezuela S.A. (PDVSA) to
operate the 50,000-barrel-a-day Urdaneta West oil field.

PDVSA has given oil companies with operating contracts until the
end of this year to switch the contracts into PDVSA-dominated
joint ventures.

Shell sources say they are meeting regularly with the
government, but have yet to work out important details, such has
how much of a stake Shell will maintain in the field. PDVSA has
said it will take at least 51%.

Sean Rooney, the president of Shell Venezuela, has said the
Company expects the contract process to be finalized before the
start of 2006.





                            ***********


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

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
Sheryl Joy P. Olano, Editors.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.

Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial
subscription or balance thereof are $25 each.  For subscription
information, contact Christopher Beard at 240/629-3300.


* * * End of Transmission * * *