TCRLA_Public/051012.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

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

           Wednesday, October 12, 2005, Vol. 6, Issue 202

                            Headlines


A R G E N T I N A

CONARTE CONSTRUCCIONES: General Report Filing Expected
DISTRI GOM: General Report Due in Court October 13


B E R M U D A

FOSTER WHEELER: Initiates New Equity-for-Debt Exchange
FOSTER WHEELER: Elects Vice President, General Counsel
GOSHAWK INSURANCE: May Sell Bermuda Reinsurer
PXRE GROUP: Watch Negative Remains Even after Capital Raise


B R A Z I L

AES CORP.: Senior Credit Facility Commitment Increased to $650M
AES TIETE: Bear Stearns Lowers Share Recommendation
BANCO MERCANTIL: Rating Reflects Low Profitability
VARIG: Restructuring Plan Presented to US Court


C A Y M A N   I S L A N D S

BAC SYNTHETIC: Shareholders Initiate Voluntary Liquidation
DIVERSIFIED ASSET: To be Wound Up Voluntarily
DUPLEX CORPORATION: Appoints Liquidators
EMPLOYEE LLC: Creditors Claims Due On or Before Nov. 3
KIRTLAND PDM: Debt Proof to Be Filed By November 15

PREDRILL STRESSES: Final General Meeting Set for Nov. 4
SMF CAPITAL: Shareholders Decide on Voluntary Liquidation
ZAIS MATRIX IV: Company Wind Up Made Official


C O L O M B I A

GRANAHORRAR: Fogafin Concludes First Phase of Privatization


J A M A I C A

DYOLL GROUP: Shares Resume Trading at JSE
KAISER ALUMINUM: Seeks Exclusive Periods Extention


M E X I C O

AEROMEXICO/MEXICANA: Pilots' Union to Get 5% Stake in Airlines
BALLY TOTAL: Sets Stockholders Meeting for Jan. 26
SATMEX: Taps White & Case's Thomas Heather as Mediator


V E N E Z U E L A


PDVSA: Improving Plant to Boost Production Capacity


    - - - - - - - - - - -


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

CONARTE CONSTRUCCIONES: General Report Filing Expected
------------------------------------------------------
The deadline for the submission of the general report on the
Conarte Construcciones S.R.L. liquidation will be tomorrow,
Oct. 13, 2005. The report shall contain a summary of the
Company's financial status as well as relevant events
pertaining to the bankruptcy.

Ms. Nora Cristina Roger, the trustee selected by the court,
verified creditors' claims until July 7, 2005. The verified
claims were presented in court as individual reports on Sep. 1,
2005.

The Company began liquidating its assets following the
"Quiebra" pronouncement of Buenos Aires' civil and commercial
Court No. 16.

The bankruptcy process will end with the disposal of company
assets in favor of its creditors.

CONTACT: Conarte Construcciones S.R.L.
         Avda Rivadavia 5474
         Buenos Aires

         Ms. Nora Cristina Roger, Trustee
         Hipolito Yrigoyen 1349
         Buenos Aires


DISTRI GOM: General Report Due in Court October 13
--------------------------------------------------
The general report on the bankruptcy case of Distri Gom S.R.L.
will be presented in court tomorrow, Oct. 13, 2005. The Company
entered bankruptcy protection after Court No. 9 of Buenos
Aires' civil and commercial tribunal, with the assistance of
Clerk No. 17, ordered the Company's liquidation.

Court-appointed trustee Jose Luis Abuchdid verified creditors'
proofs of claim until June 9, 2005. Mr. Abuchdid prepared
individual reports out of the verified claims and submitted
them on Aug. 17, 2005.

CONTACT: Mr. Jose Luis Abuchdid, Trustee
         Tacuari 119
         Buenos Aires



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

FOSTER WHEELER: Initiates New Equity-for-Debt Exchange
------------------------------------------------------
Foster Wheeler Ltd. (Nasdaq: FWLT) announced Monday that it
intends to launch, within five business days, an exchange offer
and related consent solicitation for up to $150 million of the
$261.5 million outstanding principal amount of its 10.359%
Senior Secured Notes due September 15, 2011. In connection with
the exchange offer and consent solicitation, Foster Wheeler has
entered into a lock-up agreement with certain holders of Senior
Notes holding approximately $133.5 million, or 51.1 percent, of
the outstanding principal amount of the Senior Notes.

Under the terms of the offer, the Company intends to exchange
40.179 of its common shares for each $1,000 aggregate principal
amount of Senior Notes including accrued and unpaid interest
thereon. The Senior Notes are currently callable at a price of
approximately 113.1 percent of each $1,000 aggregate amount of
principal plus accrued and unpaid interest. On October 7, 2005,
the market value of each Senior Note approximated 112.5
percent. The number of common shares outstanding prior to the
proposed exchange is 50,647,387.

"This latest exchange offer is another significant step in our
Company's deleveraging," said Raymond J. Milchovich, chairman,
president and chief executive officer. "The three key
accomplishments of this exchange offer are as follows:

- Most importantly, this exchange will be accretive to expected
2006 earnings per share;

- Up to $150 million principal amount of debt will be
eliminated, reducing the Company's gross debt to its lowest
level in more than 15 years;

- Up to $15 million of interest expense will be eliminated in
2006, all of which will flow to annual income.

"I am very pleased that this exchange offer, together with our
two previous successful exchange offers, establishes a much
stronger financial foundation for Foster Wheeler, further
enhancing our ability to deliver successful products and
services that meet or exceed the expectations of our worldwide
client base."

Concurrently with the exchange offer, Foster Wheeler intends to
solicit consents from holders of the outstanding Senior Notes
to proposed amendments to the indenture under which the
outstanding Senior Notes were issued. The amendments would
eliminate the restrictive covenants contained in the Senior
Note indenture but would not affect the security pledged to the
Senior Notes or the guarantees. Under the terms of the consent
solicitation, holders are being offered a consent fee of $10
for each $1,000 aggregate principal amount of Senior Notes. Mr.
Milchovich added, "A successful consent solicitation will
provide Foster Wheeler with an additional level of financial
and operating flexibility."

Foster Wheeler has entered into a lock-up agreement with
certain Senior Notes holders for approximately $133.5 million,
or 51.1 percent, of the outstanding principal amount of the
Senior Notes. This agreement requires such holders to tender
their Senior Notes and deliver their consent to the indenture
amendments within 10 business days after the exchange offer is
commenced. The minimum consent requirement will be satisfied
upon the delivery of consents by such holders.

In the event that Foster Wheeler receives tenders in excess of
$150 million, Foster Wheeler intends to exchange (i) first, all
notes tendered by holders that have signed the lock-up
agreement and (ii) second, notes tendered by other holders pro-
rata up to the $150 million limit. The consent fee will be paid
on all notes tendered on, or prior to, the tenth business day.

Foster Wheeler expects to have two settlement dates for the
delivery of the common shares. The first will be for those
holders with whom Foster Wheeler has entered into a lock-up
agreement and shall be a date promptly following the tenth
business day following the commencement of the exchange offer
and consent solicitation. The second will be for non-locked-up
holders and shall be a date promptly following the twentieth
business day following the commencement of the exchange offer
and consent solicitation. In each instance, Foster Wheeler
expects the settlement date to be the fourth business day
immediately following such closing. The Company expects to pay
consent fees, if applicable, on the second settlement date.

The exchange will result in an improvement in the Company's
consolidated net worth, after taking into account a possible,
primarily non-cash, accounting charge related to the exchange,
by an amount approximately equal to the principal amount of the
Senior Notes exchanged. The amount of the potential charge is
dependent upon the principal amount of Senior Notes tendered,
the principal amount of Senior Notes for which consents are
received and the market value of Foster Wheeler's common shares
exchanged at the time of closing of the offer. The charge
reflects primarily the difference between the fair market value
of the common shares to be issued and the book value of the
debt exchanged. The actual charge will be determined at the
closing date and will be recorded in the fourth quarter of
2005.

Further details regarding the exchange offer and consent
solicitation will be announced on the date the offer is
commenced.

The foregoing reference to the exchange offer and consent
solicitation and any other related transactions shall not
constitute an offer to buy or exchange securities or constitute
the solicitation of an offer to sell or exchange any securities
in Foster Wheeler Ltd. or any of its subsidiaries.

Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and
management, research and plant operation services. Foster
Wheeler serves the refining, upstream oil and gas, LNG and gas-
to-liquids, petrochemical, chemicals, power, pharmaceuticals,
biotechnology and healthcare industries. The corporation is
based in Hamilton, Bermuda, and its operational headquarters
are in Clinton, New Jersey, USA.

CONTACT: Foster Wheeler Ltd.
         Media               
         Maureen Bingert
         Phone: 908-730-4444  
         E-mail: maureen_bingert@fwc.com
                      or
         Investor Relations  
         John Doyle
         Phone: 908-730-4270
         E-mail: john_doyle@fwc.com
                      or
         Other Inquiries     
         Phone: 908-730-4000
         E-mail: fw@fwc.com

         URL: www.fwc.com


FOSTER WHEELER: Elects Vice President, General Counsel
------------------------------------------------------
Foster Wheeler Ltd. (Nasdaq: FWLT) announced Monday that its
board of directors has elected Peter J. Ganz executive vice
president and general counsel.

"I am delighted that Foster Wheeler has been able to attract
such a talented and highly experienced individual," said
Raymond J. Milchovich, chairman, president and chief executive
officer. "Reporting directly to me, Peter will provide
additional leadership and management to Foster Wheeler and will
be responsible for the Company's legal function. He has
considerable litigation and asbestos liability management
experience and will add significant value to our management
team."

Mr. Ganz was most recently senior vice president, general
counsel, secretary and chief compliance officer of
International Specialty Products Inc. of New Jersey, and of its
affiliate company, Building Materials Corporation of America
(BMCA). He also served concurrently as chief executive officer,
president and general counsel of BMCA's parent, G-I Holdings
Inc. (formerly GAF Corporation).

Prior to joining these corporations in 1995, Mr. Ganz was a
litigator in private practice with McCarter & English in New
Jersey, and with Kramer, Levin, Nessen, Kamin and Frankel in
New York. Following law school graduation, he held a judicial
clerkship with the Honorable Anne E. Thompson in the United
States District Court for the District of New Jersey. Mr. Ganz
received an A.B. summa cum laude from Duke University in 1984
and a J.D. magna cum laude from Harvard Law School in 1987.

Pursuant to NASDAQ Marketplace Rule 4350(i)(1)(A)(iv), the
Company also announced that Mr. Ganz will receive awards of the
Company's restricted stock and non-statutory stock options as
part of his agreement to join the Company. Specifically, Mr.
Ganz will receive 17,417 restricted shares of the Company's
common stock, which shares had an aggregate fair market value
of $521,639.15 based on the average of the high and low prices
of a share of the Company's common stock as of October 7, 2005.
He will also receive 52,165 non-statutory stock options bearing
an exercise price of $29.95, which is equal to the average of
the high and low prices of a share of the Company's common
stock as of October 7, 2005. The award of the stock options was
pursuant to the Company's 2004 Stock Option Plan and related
agreements. The award of the restricted stock was on the same
terms as awards made pursuant to the Company's 2004 Management
Restricted Stock Plan and related agreements. The foregoing
documents provide, among other things, that one-third of the
awards will vest on December 31, 2005 and two-thirds will vest
on December 31, 2006.

Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and
management, research and plant operation services. Foster
Wheeler serves the refining, upstream oil and gas, LNG and gas-
to-liquids, petrochemicals, chemicals, power, pharmaceuticals,
biotechnology and healthcare industries. The corporation is
based in Hamilton, Bermuda, and its operational headquarters
are in Clinton, New Jersey, USA.

CONTACT: Foster Wheeler Ltd.
         Media
         Maureen Bingert
         Phone: 908-730-4444
         E-mail: maureen_bingert@fwc.com
                      or
         Investor Relations
         John Doyle
         Phone: 908-730-4270
         E-mail: john_doyle@fwc.com
                      or
         Other Inquiries
         Phone: 908-730-4000
         E-mail: fw@fwc.com

         URL: http://www.fwc.com


GOSHAWK INSURANCE: May Sell Bermuda Reinsurer
---------------------------------------------
Goshawk Insurance Holdings said it is considering a plan for a
'significant' injection of capital into its main operating
subsidiary, Rosemont Re, but said it may alternatively launch
an outright sale of the business.

Last month, Rosemont Re, a Bermuda-based reinsurer, was
threatened with a credit rating downgrade by the AM Best
agency. A downgrade in Rosemont's A- rating to the triple B
range would prompt reinsurance brokers to stop recommending the
Company to clients.

A firm proposal will be put to shareholders as soon as
possible.

"If the company is unsuccessful in raising capital, the
company's ability to write new business will be severely
impaired," Goshawk said in a statement.

Goshawk's announcement regarding its plans for Rosemont Re
coincides with its declaration that it has boosted its initial
estimated net loss from Hurricane Katrina.

Goshawk raised its Katrina net loss estimate to US$60 million
from an initial forecast of US$25-US$30 million, and said it
expected a further US$30-million hit from Hurricane Rita.  


PXRE GROUP: Watch Negative Remains Even after Capital Raise
-----------------------------------------------------------
Fitch Ratings commented Monday that ratings of PXRE Group Ltd.
(PXRE), PXRE Capital Trust I, PXRE Reinsurance Ltd., and PXRE
Reinsurance Company remain on Rating Watch Negative following
PXRE's successful capital raising in the form of common stock
and the private placement of perpetual preferred shares, which
together raised approximately $474 million, net of transaction
costs. PXRE intends to contribute the proceeds to PXRE
Reinsurance Ltd., its Bermuda reinsurance subsidiary, to
support the underwriting of reinsurance business during
upcoming renewal periods. The ratings are listed below.

Fitch views the new capital as a positive credit event. The
amount raised is more than PXRE's current estimate of its net
loss from Hurricanes Katrina and Rita of between $265 million
and $340 million. Fitch also notes that, in the past, major
insurance losses have spurred significant increases in
insurance and/or reinsurance prices. PXRE's ability to
successfully raise capital is an indication of the capital
market's confidence in both PXRE's organization and future
reinsurance pricing.

Nonetheless, Fitch notes that the loss estimates are
significant, with losses from Hurricane Katrina alone
representing between 30% and 40% of PXRE's June 30, 2005
shareholders' equity. This represents a greater loss than Fitch
had expected from a single event. The additional capital raised
will help to replenish losses and replace capital; however, the
onus will be on the company to manage risks appropriately so as
to not unduly expose the new or existing capital to further
loss.

Fitch also notes that significant uncertainties remain. Loss
estimates from Hurricane Katrina continue to develop, and Fitch
believes this event presents unprecedented risks to the
insurance industry. Thus, Fitch believes that it may take
longer than normal for these losses to fully develop. Fitch
further notes that PXRE's loss estimates are based on an
industry loss estimate of $30 billion-$40 billion. With some
estimates of the industry loss as high as $60 billion, it is
very possible that PXRE's loss could grow beyond the high end
of its estimated range.

Resolution of the Rating Watch Negative will depend upon
Fitch's updated assessment of PXRE's risk concentration
relative to its capital base net of storm losses and capital
replenishment. Fitch believes there is the possibility that
some catastrophe reinsurers are materially under-estimating
overall catastrophe exposure based in part on extensive
reliance on catastrophe modeling and assumptions. Additionally,
Fitch expects to be able to resolve the Rating Watch Negative
once it believes there is a reasonably stable estimate of the
industry's and PXRE's ultimate loss from Hurricane Katrina.
Given the very unusual nature of the losses, this could take an
extended period of time but no sooner than the reporting of
third-quarter 2005 financial results.

The following current ratings remain on Rating Watch Negative
by Fitch:

PXRE Group Ltd.

--Long-term rating 'BBB-'.

PXRE Capital Trust I

--Trust preferred securities $100 million 8.85% due Feb.1, 2027
'BB+'.

PXRE Reinsurance Company
PXRE Reinsurance Ltd.

--Insurer financial strength 'A-'.

CONTACT: Gretchen K. Roetzer, +1-312-606-2327
         Brian C. Schneider, CPA, CPCU +1-312-606-2321, Chicago

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



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

AES CORP.: Senior Credit Facility Commitment Increased to $650M
---------------------------------------------------------------
The AES Corporation amended its senior credit facility with:

   * Citicorp USA, Inc., as Administrative Agent;

   * Citibank, N.A., as Collateral Agent;

   * Citigroup Global Markets, Inc., as Lead Arranger and Book
     Runner;

   * Banc Of America Securities LLC, as Lead Arranger and Book
     Runner and as Co-Syndication Agent for the Initial Term
     Loan Facility;

   * Deutsche Bank Securities Inc., as Lead Arranger and Book
     Runner for the Initial Term Loan Facility;

* Union Bank Of California, N.A., as Co-Syndication Agent
  for the Initial Term Loan Facility and as Lead Arranger
  and Book Runner and as Syndication Agent for the Revolving
     Credit Facility,

   * Lehman Commercial Paper Inc., as Co-Documentation Agent
     for the Initial Term Loan Facility;

   * Ubs Securities LLC, as Co-Documentation Agent for the
     Initial Term Loan Facility;

   * Societe Generale, as Co-Documentation Agent for the
     Revolving Credit Facility;

   * Credit Lyonnaise New York Branch, as Co-Documentation
     Agent; and

   * a consortium of lenders comprised of:

     Revolving Credit Loan Bank                      Commitment
     --------------------------                      ----------
     Bank of America, N.A.                          $60,000,000
     Citicorp USA, Inc.                              60,000,000
     Credit Suisse, Cayman Islands Branch            60,000,000
     Deutsche Bank Trust Company Americas            60,000,000
     JPMorgan Chase Bank, N.A.                       60,000,000
     Lehman Commercial Paper Inc.                    60,000,000
     Union Bank of California, N.A.                  60,000,000
     UBS AG, Stamford Branch                         40,000,000
     CALYON New York Branch                          35,000,000
     Merrill Lynch Capital Corporation               35,000,000
     Societe Generale - New York Branch              35,000,000
     ABN Amro Bank N.V.                              25,000,000
     BNP Paribas                                     25,000,000
     United Overseas Bank Ltd.                       20,000,000
     WestLB AG, New York Branch                      15,000,000
                                                   ------------
     Total                                         $650,000,000
                                                   ============

The amendments increased the size of the revolving credit
facility from $450 million to $650 million.

A full-text copy of Amendment No. 4 is available for free at
http://ResearchArchives.com/t/s?235

A full-text copy of Amendment No. 5 is available for free at
http://ResearchArchives.com/t/s?236

AES Corporation -- http://www.aes.com/-- is a leading global  
power company, with 2004 revenues of $9.5 billion.  AES
operates in 27 countries, generating 44,000 megawatts of
electricity through 124 power facilities and delivers
electricity through 15 distribution companies.  AES Corp.'s
30,000 people are committed to operational excellence and
meeting the world's growing power needs.

                         *     *     *

As reported in the Troubled Company Reporter on June 23, 2005,
Fitch Ratings has upgraded and removed the ratings of AES
Corporation from Rating Watch Positive, where it was initially
placed on Jan. 18, 2005 pending review of the company's year-
end financial results.  Fitch said the Rating Outlook is
Stable.

Following the completion of its review, Fitch's upgrade
reflects the significant progress AES had made in retiring
parent company recourse debt and improving liquidity.  In
addition, AES has refinanced several near term debt maturities
and extended the company's debt maturity profile.  The company
has successfully accessed both the debt and equity markets in
2004 and 2003. (Troubled Company Reporter, Oct. 11, 2005, Vol.
9, No. 241)


AES TIETE: Bear Stearns Lowers Share Recommendation
---------------------------------------------------
Bear Stearns has downgraded its recommendation on shares of
Brazilian electric utility AES Tiete to "Peer Perform" from
"Outperform." According to Dow Jones Newswires, the move came
after AES Tiete announced its failure to secure Brazil's
National Power Authority's (Aneel) approval to extend a
contract with Eletropaulo.

In October 2003, AES Tiete and Eletropaulo agreed to extend the
deal to 2028. However, Aneel claimed the extension violates
requirements that distribution companies buy power only in
official government auctions.

The contract is AES Tiete's sole source of revenue from 2006
on, Bear Stearns said.

The downgrade on AES Tiete's by Bear Stearns also reflects a
shift to growth plays in the sector.

"We see less need for 'defensive plays,"' Bear Stearns said in
a research report, noting expectations for additional interest
rate cuts in South America's largest economy.

"We believe that while Tiete will also likely trade up in a
bondlike way on lower rates, the best plays are companies with
more balance sheet restructuring and longer-term cash flow
growth," Bear Stearns said.


BANCO MERCANTIL: Rating Reflects Low Profitability
--------------------------------------------------
Rationale

The rating assigned to Banco Merantil Do Brasil S.A. (MB)
reflects the challenges faced by a midsize bank operating in
the segment of small and midsize companies and individuals in
the competitive banking industry in Brazil; its low
profitability when compared to the industry, which is
negatively affected by the bank's large and costly operational
structure and small scale; and its capitalization, which can be
a limiting factor in the long term, though it is adequate in
the short term. These risk factors are partially offset by MB's
long track record operating in the market and knowledge of its
core/niche market, mainly the state of Minas Gerais, which
translate into good market share and brand-name recognition on
a regional basis, its diversified operation, and good liquidity
management.

With total assets of Brazilian reais (BrR) 4.4 billion as of
June 2005 (equivalent to $1.9 billion at BrR2.35 to $1), MB is
a small bank, positioned as the 22nd-largest private bank in
the competitive Brazilian system. While the bank's national
market share is not relevant (market share in total assets and
lending is less than 1%), it holds a more significant market
presence in the region where the bank focuses its operations
(mainly Minas Gerais and the interior of Sao Paulo). MB's brand
name is well recognized in the region, where it focuses its
activities on consumer banking, mainly to low-income
individuals, and in servicing midsize and local companies.

MB has a long track record in the market, operating since 1943.
MB went through a restructuring process in the past four years
and, by doing so, was prepared for the competitive environment.
While Standard & Poor's Ratings Services believes the bank has
streamlined its operations, it remains challenged to translate
its customer-oriented strategy and its reshaped operational
structure into higher profitability and gains of scale. MB's
primary strategic goal is the protection of its business model
through the diversification of its activities and adequate
profitability coming from the increase in clientele and higher
financial intermediation.

After the Banco Santos event at the end of 2004 and the
consequent reduction of funding from institutional investors,
MB adopted a conservative approach toward asset-liability
management, preserving cash instead of pursuing lending more
aggressively. After March 2005, the bank returned to the normal
pace of its lending activities and was able to grow its total
lending portfolio by 3% in second-quarter 2005, after a
reduction of 8% in the first quarter. Despite the slowdown in
lending activities, asset quality indicators have been
maintained at the same levels of the banking industry in
general. The ratio of nonperforming loans to total loans
reached 6.4% in June 2005 (6% when adjusted by the amount of
credit ceded in the period), which is less than the 7.7% ratio
the bank showed in 2003 and in line with the 6% presented by
the banking system.

The better economic environment in 2004 and 2005 positively
affected the ratio of net charge-offs to total loans, which
declined to 3.7% in June 2005 from 4.3% in 2004. Nevertheless,
as is the case with other banks, MB's credit portfolio is
susceptible to adverse economic and market conditions that
could affect its asset quality indicators. For the future, we
expect the bank to be able to improve its credit matrix while
benefiting from the prospective economic growth.

One of the main factors constraining the rating is MB's low
bottom-line results. The bank has maintained average ROA of
0.5% in the past three years adjusted for nonrecurrent results.
Despite the bank's efforts to improve core earnings with
enhancements in its asset mix (such as moving toward more
profitable lending to individuals) and to increase revenues
from fees and cross selling, its structure is still costly (it
presented a noninterest expenses-to-revenues ratio of 77% in
June 2005, which compares poorly with Brazilian and
international standards) and still lacks the necessary scale
(revenues from fees to total revenues reached only 16% as of
June 2005) and revenues stream. We believe the bank still has
to build a track record of stronger and more consistent returns
to reverse its weak profitability and improve its financial
standing.

We view MB's capital as just adequate in view of its strategy
of gradual expansion and its low internal capital generation
capacity. MB has planned a capital injection of BrR50 million
in November 2005. This would bring the risk adjusted asset
ratio to 14.5% and give more comfort to the bank's growth
strategy in the short term. Despite the fact that, like other
midsize and small banks that operate in the Brazilian market,
MB suffered certain redemptions in its deposit base from
institutional investors at the end of 2004, the bank's more
diversified funding base (with stronger reliance on time
deposits from individuals and companies on its funding base
than its peers) and good liquidity attenuated the reduction.
Nevertheless, the bank faces the challenges of continuing to
grow its funding and capitalization at the same pace as its
expansion.

Outlook

The stable outlook reflects our expectations that the bank will
maintain its conservative operation (which explains in part its
profitability level) and preserve its liquidity. Asset quality
indicators are also expected to be maintained at average
industry levels, supported by the bank's reinforcement on
credit policy and procedures. Deterioration of asset quality
indicators and the reduction of its profitability would prompt
a change to a negative outlook or a downgrade. On the other
hand, the ratings could trend upward if the bank is successful
in presenting sustainable and recurring profitability of more
than 1.5%, improving asset quality indicators following credit
growth, and a stronger capital base to support its operation
and expansion.

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

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


VARIG: Restructuring Plan Presented to US Court
-----------------------------------------------
Vicente Cervo and Eduardo Zerwes, as Foreign Representatives of
VARIG, S.A., and its debtor-affiliates, filed with the U.S.
Bankruptcy Court for the Southern District of New York an
English copy of the Judicial Recovery Plan for VARIG, S.A., Rio
Sul Linhas Aereas S.A. and Nordeste Linhas Aereas S.A. on
September 20, 2005.

The Recovery Plan aims to assure that:

   1. VARIG, Rio Sul and Nordeste overcome their current
      economic and financial difficulties and continue with the
      VARIG business while preserving the interests of their
      creditors and shareholders;

   2. VARIG's business is feasible on the long term, enabling
      the resurgence of the Companies after the recognition of
      the "future assets," which will enable them to resolve
      their public tax and social security debt; and

   3. the interests of all the parties involved are treated in
      a fair, reasonable and balanced manner.

The Recovery Plan, presented in accordance with the New
Bankruptcy and Restructuring Law of Brazil, is categorized
according to the Debtors' operational restructuring, financial
restructuring, and restructuring of their tax and social
security liabilities and contingencies.

                  Classification of Claims

The Judicial Recovery Plan for VARIG, S.A., Rio Sul Linhas
Aereas S.A. and Nordeste Linhas Aereas S.A. provides for a
restructuring of the Companies' financial obligations.

The Foreign Debtors group claims in this manner:

      Class                  Description
      -----                  -----------
   I - Employees and         Credits totaling BRL168,000,000
       Former Employees

  II - Creditors with Real   Credits totaling BRL1,814,500,000,
       Guarantee (AERUS)     consisting of BRL1,059,400,000
                             relative to the Private Instrument
                             of Consolidation and Renegotiation
                             of VARIG's debts to AERUS related
                             to the payment of non-realized
                             contributions, and BRL755,000,000
                             relative to an actuarial deficit
of
                             the pension plan.

                             The AERUS Debt is guaranteed by a
                             pledge of lien on 5% of the shares
                             in VARIGLOG and 5% of the shares
in
                             VEM.  The Aerus Credits are
                             guaranteed by a lien on credit
                             rights derived from the Judicial
                             Action to Adjust Airfares.

       Creditors with Real   Credits totaling BRL256,800,000.
       Guarantee (except     The credits pertaining to the
       AERUS)                guaranteed creditors that exceed
                             the value of the respective
                             guarantees are classified under
                             Class III.


III - Current Lessors       Credits totaling BRL740,300,000.

       Former Lessors        Credits totaling BRL370,400,000.

       Other Creditors       Credits totaling BRL579,100,000.

       Related Companies     Credits totaling BRL182,400,000.

The Recovery Plan provides for this treatment of claims:

A) Class I

   The labor credits are divided into three sub-categories:

   (a) FGTS equal to BRL76,000,000

       Credits related to the Fundo de Garantia do Tempo de
       Servico, a form of sinking fund for employees, will be
       paid under the conditions established in an agreement
       the Companies entered into with Caixa Economica Federal.

   (b) PIA equal to BRL32,500,000

       The credits relative to the Retirement Incentive Program
       -- PIA -- will be paid under the existing conditions, to
       wit:

               Deadline: up to 36 months
               Correction Amount: tied to the salaries

   (c) Other labor credits equal to BRL59,600,000

       Until the Companies obtain new funds, the Companies will
       pay the other labor creditors up to the maximum overall
       limit of BRL1,000,000 per month, prorated over the
number
       of creditors and in compliance with their claim amounts,
       with the remaining balance to be prorated over the
       subsequent months for full liquidation in June 2006.  
The
       monthly installments may be liquidated via offsetting,
       barter, or any other means of eliminating the
obligation.

B) Class II

   * Creditors with Real Guarantee (AERUS):

     Instituto Aerus De Seguridade Social's credits will stay
     with the Companies, and the guarantees contracted will
     remain valid.

     1. AERUS' credits derived from the Private Agreement of
        Debt Consolidation and Renegotiation entered into on
        April 10, 2003, will be liquidated under the same
        currently existing conditions, establishing an
        intermediate grace period of one year counting from the
        date of approval of the Recovery Plan for suspension of
        the payments.  After that period, the credit may be
        liquidated in two ways, at the discretion of the
        Companies:

        -- Regular installments for the period contracted; or

        -- A single payment in the event the judicial action
           against the Federal Government relative to airfare
           ends successively for VARIG.  If there are funds
           leftover after paying AERUS' Credits, they will
           revert back to VARIG and may be used to pay off the
           Government's Credits.

     2. AERUS' actuarial credit will be paid in the manner
        contracted, with an additional grace period of one
        year.

   * Creditors with Real Guarantee (except AERUS)

     The creditors' guarantees will be kept in the manner
     contracted.  Payment of the debt will follow the same  
     model prepared for Class III.

C) Class III

   Unsecured creditors will be paid initially at face value via
   fixed monthly installments, with no interest or monetary
   correction, up to the overall amount of BRL100,000,000.
   Payment of the first installment will be made 30 days after
   approval of the Recovery Plan, and the value of the first
   six installments may be increased if and when funds are
   received from the sale of shareholder control of the New
   Company, or the operational segment is sold to the New
   Company, as the case may be.  The monthly installments may
   be liquidated via offsetting, barter or any other means of
   eliminating the obligation and adjustments must be made for
   current suppliers that have received advance payments.

   Twenty-four months after the approval of the Recovery Plan,
   the remaining creditors with credits against the Companies
   will receive payment via one of these two modes, at the
   discretion of the creditor:

   (a) In exchange for a security issued by VARIG, with no
       commitment or guarantee from the New Company, with these
       payment characteristics:

       -- A 5-year no-interest grace period counting from the
          security's date of issue;

       -- Payment of the principal 20 years from the issue
          date of the security; and

       -- Interest rate: Long-Term Interest Rate (TJLP) + 1%
          per annum, paid annually, computed from the date of
          issue of the security.

   (b) In exchange for securities to be issued by the New
       Company, the price or conversion rate of which will be
       established via an auction for exchanging the Companies'
       debt for a security issued by the New Company.

   Other creditors are FRB-Par Investimentos S.A. and other
   shareholders.  The shareholders hope to retain a minority
   interest in the New Company.

A full-text list of creditors is available for free at:

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

                    Operational Restructuring

VARIG has appointed Lufthansa Consulting as technical advisor
in preparing the Operational Recovery Plan to assure that the
Companies would achieve an adequate and sustainable level of
operational profit.  Together, VARIG and Lufthansa Consulting
have identified key initiatives to achieve a sustainable
operating profit in the short, medium, and long term:

   (1) Further strengthen VARIG's current position as a strong
       competitor in the international market;

   (2) Maintain and strengthen VARIG's position in the domestic
       market;

   (3) Create a clear hub structure in Sao Paulo's main airport
       to enhance the power of the network, attracting
       additional traffic;

   (4) Restructure, modernize and harmonize the fleet to reduce
       unit cost and improve operational efficiency;

   (5) Improve revenue management consistent with competitive
       positioning;

   (6) Strengthen organizational and strategic decision-making
       and accountability to meet targets and adhere to plans;

   (7) Clearly define organizational structures, interfaces and
       responsibilities within VARIG and the VARIG group of
       companies;

   (8) Optimize processes to improve efficiency and
       productivity in all areas of the company;

   (9) Adapt personnel count to match optimized company
       structure;

  (10) Improve product and customer services to re-gain market
       share; and

  (11) Establish relevant co-operations and alliances and
       intensify current alliances to strengthen network and
       product.

A full-text copy of the Operational Restructuring Plan is
available for free at:

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

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin
America.  VARIG's principal business is the transportation of
passengers and cargo by air on domestic routes within Brazil
and on international routes between Brazil and North and South
America, Europe and Asia.  VARIG carries approximately 13
million passengers annually and employs approximately 11,456
full-time employees, of which approximately 133 are employed in
the United States.

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a
competitive landscape, high fuel costs, cash flow deficit, and
high operating leverage.  The Debtors may be the first case
under the new law, which took effect on June 9, 2005.  Similar
to a chapter 11 debtor-in-possession under the U.S. Bankruptcy
Code, the Debtors remain in possession and control of their
estate pending the Judicial Reorganization.  Sergio Bermudes,
Esq., at Escritorio de Advocacia Sergio Bermudes, represents
the carrier in Brazil.

Each of the Debtors' Boards of Directors authorized Vicente
Cervo as foreign representative.  In this capacity, Mr. Cervo
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y.
Case Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at
Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the
United States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts. (VARIG Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 215/945-7000)



===========================
C A Y M A N   I S L A N D S
===========================

BAC SYNTHETIC: Shareholders Initiate Voluntary Liquidation
----------------------------------------------------------
               BAC SYNTHETIC CLO 2000-1 LIMITED
                  (In Voluntary Liquidation)
               The Companies Law (2004 revision)
                          Section 135

TAKE NOTICE that the following special resolution was passed by
the shareholder(s) of BAC Synthetic CLO 2000-1 Limited at an
extraordinary general meeting of the shareholder(s) held on
September 21, 2005:

THAT the Company be placed into voluntary liquidation
forthwith.

THAT Phillipa White and Jon Roney be appointed as liquidators
of the Company.

Creditors of BAC Synthetic CLO 2000-1 Limited are to prove
their debts or claims on or before November 3, 2005, and to
send full particulars of their debts or claims to the joint
liquidators of the Company. In default thereof, they will be
excluded from the benefit of any distribution made before the
debts are proved or from objecting to the distribution.

CONTACT: Ms. Phillipa White and Mr. Jon Roney
         Joint Voluntary Liquidators
         Maples Finance Limited, P.O. Box 1093GT
         Grand Cayman, Cayman Islands


DIVERSIFIED ASSET: To be Wound Up Voluntarily
---------------------------------------------
        DIVERSIFIED ASSET LIBOR INVESTMENTS III LIMITED
                 (In Voluntary Liquidation)
              The Companies Law (2004 revision)
                         Section 135

TAKE NOTICE that the following special resolution was passed by
the shareholder(s) of Diversified Asset Libor Investments III
Limited at an extraordinary general meeting of the
shareholder(s) held on September 12, 2005:

THAT the Company be placed into voluntary liquidation
forthwith.

THAT Carrie Bunton and Johann Le Roux be appointed as
liquidators of the Company.

Creditors of Diversified Asset Libor Investments III Limited
are to prove their debts or claims on or before November 3,
2005, and to send full particulars of their debts or claims to
the joint liquidators of the Company. In default thereof, they
will be excluded from the benefit of any distribution made
before the debts are proved or from objecting to the
distribution.

CONTACT: CARRIE BUNTON and JOHANN LE ROUX
         Joint Voluntary Liquidators
         Maples Finance Limited, P.O. Box 1093GT
         Grand Cayman, Cayman Islands
         

DUPLEX CORPORATION: Appoints Liquidators
----------------------------------------
                        DUPLEX CORPORATION
                    (In Voluntary Liquidation)
                 The Companies Law (2004 Revision)
                            Section 135

TAKE NOTICE that the following special resolution was passed by
the shareholder(s) of Duplex Corporation at an extraordinary
general meeting of the shareholder(s) held on September 22,
2005:

THAT the Company be placed into voluntary liquidation
forthwith.

THAT Mark Wanless and Tun Win be appointed as liquidators of
the Company.

Creditors of Duplex Corporation are to prove their debts or
claims on or before November 3, 2005, and to send full
particulars of their debts or claims to the joint liquidators
of the Company. In default thereof, they will be excluded from
the benefit of any distribution made before the debts are
proved.

CONTACT: Mr. Mark Wanless, Joint Voluntary Liquidator
         Maples Finance Jersey Limited, 2nd Floor
         Le Masurier House, La Rue Le Masurier
         St. Helier, Jersey JE2 4YE


EMPLOYEE LLC: Creditors Claims Due On or Before Nov. 3
------------------------------------------------------
                   EMPLOYEE LLC MEMBER LTD
                 (In Voluntary Liquidation)
              The Companies Law (2004 revision)
                        Section 135

TAKE NOTICE that the following special resolution was passed by
the shareholder(s) of Employee LLC Member Ltd at an
extraordinary general meeting of the shareholder(s) held on
September 15, 2005:

THAT the Company be placed into voluntary liquidation
forthwith.

THAT Jon Roney be appointed as liquidators of the Company.

Creditors of Employee LLC Member Ltd are to prove their debts
or claims on or before November 3, 2005, and to send full
particulars of their debts or claims to the joint liquidators
of the Company. In default thereof, they will be excluded from
the benefit of any distribution made before the debts are
proved or from objecting to the distribution.

CONTACT: Mr. Jon Roney, Joint Voluntary Liquidators
         Maples Finance Limited, P.O. Box 1093GT
         Grand Cayman, Cayman Islands


KIRTLAND PDM: Debt Proof to Be Filed By November 15
---------------------------------------------------
          KIRTLAND PDM BRIDGE LLC
        (In Voluntary Winding Up)
      The Companies Law (2004 Revision)

NOTICE IS HEREBY GIVEN that the creditors of the above-named
company which is being wound up voluntarily are required on or
before 15th November 2005 to send in their names and addresses
and the particulars of their debts or claims and the names and
addresses of their attorneys-at-law (if any) to the
undersigned, the attorneys-at-law for the liquidator of the
said company, and if so required by notice in writing from the
said liquidator either by their attorneys-at-law or personally
to come in and prove the said debts or claims at such time and
place as shall be specified in such notice or in default
thereof they will be excluded from the benefit of any
distribution made before such debts are proved.

CONTACT: MICHAEL T. DEGRANDIS
         Voluntary Liquidator
         c/o Maples and Calder, Attorneys-at-law
         PO Box 309 GT, Ugland House
         South Church Street, George Town
         Grand Cayman, Cayman Islands


PREDRILL STRESSES: Final General Meeting Set for Nov. 4
-------------------------------------------------------
       PREDRILL STRESSES INTERNATIONAL
         (In Voluntary Winding Up)
     The Companies Law (2004 Revision)
                Section 145

NOTICE is hereby given pursuant to section 145 of the Companies
Law that the final general meeting of the above-named Company
will be held at the offices of Wise Lord and Ferguson, 1st
Floor, 160 Collins Street, Hobart, Australia, on 4th November
2005, for the purpose of presenting to the members an account
of the winding up of the Company and giving any explanation
thereof.

CONTACT:  ROBERT PAUL WHITEHOUSE
          Voluntary Liquidator
          Maples and Calder, Attorneys-at-law
          P.O. Box 3 09 GT, Ugland House
          South Church Street, George Town
          Grand Cayman, Cayman Islands


SMF CAPITAL: Shareholders Decide on Voluntary Liquidation
---------------------------------------------------------
             SMF CAPITAL CORPORATION
           (In Voluntary Liquidation)
                 (The "Company")
        The Companies Law (2004 Revision)

Take notice that the following special resolutions were passed
by the shareholders of this Company on 13th September 2005.

THAT the Company be placed into voluntary liquidation
forthwith; and

THAT Ian Wight and Stuart Sybersma, of Deloitte, be appointed
liquidators, jointly and severally, for the purposes thereof.

Creditors of the Company are to prove their debts or claims on
or before 3rd November 2005, and to establish any title they
may have under the Companies Law (2004 Revision), or to be
excluded from the benefit of any distribution made before the
debts are proved or from objecting to the distribution.

CONTACT: STUART SYBERSMA
         Joint Voluntary Liquidator
         For enquiries: Nicole Ebanks, Deloitte
         P.O. Box 1787 GT, Grand Cayman
         Cayman Islands
         Telephone: (345) 949 7500
         Facsimile: (345) 949 8258


ZAIS MATRIX IV: Company Wind Up Made Official
---------------------------------------------
          ZAIS MATRIX IV FUND, LTD.
         (In Voluntary Liquidation)
      The Companies Law (2004 Revision)

Take notice that the following special resolutions were passed
by the sole shareholder of the abovementioned company at an
extraordinary general meeting held on 21st September 2005:

"THAT the company be placed into voluntary liquidation
forthwith;" and "THAT David Dyer be appointed liquidator for
the purposes thereof."

Creditors of the company are to prove their debts or claims on
or before 3rd November 2005, and to establish any title they
may have under the Companies Law (2004 Revision), or to be
excluded from the benefit of any distribution made before such
debts are proved or from objecting to the distribution.

CONTACT: DAVID DYER
         Deutsche Bank (Cayman) Limited
         P.O. Box 1984GT
         George Town, Grand Cayman



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

GRANAHORRAR: Fogafin Concludes First Phase of Privatization
-----------------------------------------------------------
The deposit insurance fund Fogafin has wrapped up the first
stage of the privatization of state-owned mortgage lender
Granahorrar, reports Business News Americas.

The first phase included the sale of some 497.446 billion
shares, or 1.2% of the bank's capital, worth COP5.1 billion
(US$2.2mn) to the Company's workers, cooperatives and pension
funds.

Fogafin will now open the second stage of the sell-off, under
which the remaining 98.8% of Granahorrar will be offered to
private companies and investors.

Fogafin director Juan Ortega earlier said the sale of
Granahorrar could bring in as much as COP438 billion
(US$189mn).

Granahorrar was intervened by the government during the
country's financial crisis in the late 1990s to save it from
bankruptcy.



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

DYOLL GROUP: Shares Resume Trading at JSE
-----------------------------------------
The Jamaica Stock Exchange has lifted the suspension on the
trading in the shares of Dyoll Group Ltd.. Trading in Dyoll
Group's shares was suspended on February 15, 2005 because of
its failure to provide material information to the JSE in
keeping with the Exchange's Policy Statement on Timely
Disclosure (JSE's Rule Book Appendix 8).

On September 16, the Board of the JSE decided it will lift the
suspension or before October 11, 2005, if the Company submitted
its outstanding financial statements.

The JSE said Dyoll Group was able to submit the required
financial statements by the deadline, paving the way for the
lifting of the suspension.


KAISER ALUMINUM: Seeks Exclusive Periods Extention
--------------------------------------------------
Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, notes that no order has been entered yet
regarding the confirmation of the Liquidation Plans of Alpart
Jamaica, Inc., Kaiser Jamaica Corporation, Kaiser Alumina
Australia Corporation, and Kaiser Finance Corporation.

On the other hand, Kaiser Aluminum Corporation, Kaiser Aluminum
& Chemical Corporation and certain of their Debtor affiliates
have commenced the process for soliciting votes to accept or
reject their Plan of Reorganization.  Judge Fitzgerald has
scheduled a hearing to consider confirmation of the
Reorganizing Debtors' Plan on January 9, 2006, to be continued,
if necessary, on January 10, 2006.

To complete the confirmation process for the Liquidating
Debtors and to permit the Reorganizing Debtors to proceed with
the solicitation and confirmation of their Plan, both Debtor
Groups ask the U.S. Bankruptcy Court for the District of
Delaware to extend the period during which they have the
exclusive right to:

    (1) file a plan or plans of reorganization through and
        including January 31, 2006; and

    (2) solicit acceptances of that plan through and including
        March, 31, 2006.

Judge Fitzgerald will convene a hearing on November 14, 2005,
at 1:30 p.m. to consider the Debtors' request.  By application
of Del.Bankr.LR 9006-2, the Debtors' Exclusive Filing Period is
automatically extended through the conclusion of that hearing.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and
high-strength, general engineering, automotive, and custom
industrial applications.  The Company filed for chapter 11
protection on February 12, 2002 (Bankr. Del. Case No. 02-
10429), and has sold off a number of its commodity businesses
during course of its cases.  Corinne Ball, Esq., at Jones Day,
represents the Debtors in their restructuring efforts.  On June
30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 80;
Bankruptcy Creditors' Service, Inc., 215/945-7000)



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

AEROMEXICO/MEXICANA: Pilots' Union to Get 5% Stake in Airlines
--------------------------------------------------------------
State-owned holding company Cintra said Mexico's pilots union
has agreed to set productivity goals in exchange for a 5% stake
in Aeromexico and Mexicana when they are privatized, reports
Dow Jones Newswires.

With the agreement, the union - which represents just over
2,000 pilots at Aeromexico, Mexicana and smaller carriers
controlled by Cintra - also dropped out of the bidding process
for the airlines.

Cintra is in the process of selling majority stakes in
Aeromexico and Mexicana. Credit Suisse First Boston (CSF.YY) is
managing the sale.

Economic rights of the pilots' shares will remain in the hands
of the buyers until the productivity goals are met, Cintra
said, adding that the productivity gains will be equal in value
to the stakes based on the price paid by the winning bidders.

Meanwhile, Cintra expects five groups of investors to bid for
Aeromexico and Mexicana. In a statement to the Mexican Stock
Exchange, Cintra said that four of the groups will bid for both
AeroMexico and Mexicana, while the fifth is seen making an
offer solely for Mexicana.

No single bidder will be able to take over both carriers, which
together control about 80% of the domestic market, and all
interested parties must submit their offers by Nov. 21. Foreign
investors can purchase minority stakes in the carriers only by
partnering with Mexicans.


BALLY TOTAL: Sets Stockholders Meeting for Jan. 26
--------------------------------------------------
Bally Total Fitness Holding Corporation, (NYSE: BFT) intends to
hold its Annual Meeting of Shareholders on Thursday, Jan. 26,
2006, at a Chicago area location.  The scheduled date is part
of an agreed order in Delaware Chancery Court and is subject to
Court approval.

As reported in the Troubled Company Reporter on Sept. 21, 2005,
the Company expects to complete its multi-year audit and file
its financial statements by Nov. 30, 2005.  On Aug. 31, 2005,
the Company received consent from noteholders and lenders to
extend the filing waivers under its public indentures until
Nov. 30, 2005.

Bally Total Fitness is the largest and only nationwide
commercial operator of fitness centers, with approximately four
million members and 440 facilities located in 29 states,
Mexico, Canada, Korea, China and the Caribbean under the Bally
Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM),
Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of
Canada(R) brands.  With an estimated 150 million annual visits
to its clubs, Bally offers a unique platform for distribution
of a wide range of products and services targeted to active,
fitness-conscious adult consumers.  

                        *     *     *  

As reported in the Troubled Company Reporter on Aug. 11, 2005,
Moody's Investors Service affirmed the Caa1 corporate family
(formerly senior implied) rating and debt ratings of Bally
Total  
Fitness Holding Corporation.  The affirmation reflects
continued high risk of default and Moody's estimate of recovery
values of the various classes of debt in a default scenario.  
The ratings outlook remains negative.  

Moody's affirmed these ratings:  

   * $175 million senior secured term loan B facility
     due 2009, rated B3  

   * $100 million senior secured revolving credit facility  
     due 2008, rated B3  

   * $235 million 10.5% senior unsecured notes (guaranteed)  
     due 2011, rated Caa1  

   * $300 million 9.875% senior subordinated notes due 2007,  
     rated Ca  

   * Corporate family rating, rated Caa1 (Troubled Company
     Reporter, Oct. 10, 2005, Vol. 9, No. 240)


SATMEX: Taps White & Case's Thomas Heather as Mediator
------------------------------------------------------
White & Case partner Thomas S. Heather has been appointed by
Mexico's Communications Ministry to serve as mediator in the
complex restructuring of Satmex, the Mexican satellite company,
in order to accelerate the insolvency process.  The matter is
considered to be one of the first major Mexico-US cross-border
insolvency cases.

"Satmex has until October 31 to present a draft restructuring
plan in the New York court.  Failing to meet the deadline
without some show of advancement could result in the case being
reheard before Judge Robert Drain of US Bankruptcy Court of the
Southern District of New York where creditors had filed an
involuntary Chapter 11 proceeding, but was then dismissed,"
said Mr. Heather.  "Such litigation could be costly in many
ways to all parties involved, so my job is to help move the
process forward as efficiently as possible with a plan that
works for everyone."

Mr. Heather, who is based in White & Case's Mexico City office,
has more than 20 years experience in the areas of
restructurings, mergers and acquisitions, banking, securities
and corporate governance.  A co-founder and immediate past
chair of the Mexican Mediation Institute, Heather chairs the
Financial Law Section of the Mexican Bar Association and is a
member of the Board of the Mexican Institute of Corporate
Governance. In addition, Heather has been at the forefront of
significant alternative dispute resolution and trade-related
initiatives. He participated in the NAFTA negotiations with
respect to the Financial Services Chapter, and has been
selected on several occasions as an arbitrator by the ICC Court
of International Arbitration in Paris. He has served on several
boards of leading corporations and financial institutions and
has lectured extensively in Mexico and in the US. The Mexican
magazine Lawyers World (El Mundo del Abogado) named him one of
"Mexico's Top 100 Lawyers-2005."

Mr. Heather's first task will be to oversee the proof of claims
process to make sure all the creditors' claims have been
properly identified and are valid.  Heather will also oversee
Satmex's financial reporting as agreed upon by the company and
its creditors, who are mostly US-based investors.  Mexican law
does not require companies undergoing reorganization to make
any information available to creditors, which is unacceptable
to Satmex's US investors.

The Mexican government is a shareholder of Satmex, a creditor
of a Satmex holding company, a regulator of the satellite
industry as well as the owner of the satellite concession that
is the key to Satmex's business.  Both the creditors and
Satmex's shareholders have been frustrated by the lack of
progress in the restructuring talks, which is why the Ministry
made the bold move of appointing an experienced insolvency
lawyer with significant cross-border experience to jumpstart
the negotiations.

Court documents indicate that one reason for the breakdown in
talks has been the Mexican government desire to include the
menoscabo, a conditional indebtedness incurred by Satmex's
parent on behalf of the Mexican government which allowed the
new owners of SatMex to leverage their investment in a
previously debt-free company.

"All issues related to the complex bankruptcy must be analyzed
carefully from each stakeholders' point of view.  This will be
no easy task given that there is a parallel US proceeding in
New York, SatMex has several concessions to deal with and the
company itself is vital to keeping Mexico operating effectively
due to SatMex's communications purpose.  Resolving the matter
is also compounded by the fact that creditors hold both private
and publicly placed debt in the US capital markets and the
bankruptcy involves a number of complex issues in multiple
jurisdictions involving different agencies even within Mexico,"
said Mr. Heather.

White & Case recently was involved in another milestone
bankruptcy in Mexico, representing paper conglomerate
Corporacion Durango, S.A. de C.V. in its restructuring of more
than $800 million of unsecured debt, marking the largest
reorganization to date under Mexico's new bankruptcy act.  

With more than 150 restructuring and bankruptcy lawyers in 25
countries, White & Case has long been recognized as a leader in
complex cross-border insolvencies and workouts such as the
Satmex matter.  The Firm is serving as key advisors and
litigators in some of the most high-profile restructurings,
including Asia Pulp & Paper, SK Global, United Pan-Europe
Communications and Mirant, generally regarded as one the of
most complex Chapter 11 cases in recent years with pre-petition
litigation that includes more than 200 matters with a total
value exceeding $20 billion.

About White & Case

White & Case LLP is a leading global law firm with nearly 1,900
lawyers in 38 offices in 25 countries.  Our clients value both
the breadth of our network and depth of our US, English and
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CONTACT:  WHITE & CASE LLP
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          Tel: 212 819 8299
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V E N E Z U E L A
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PDVSA: Improving Plant to Boost Production Capacity
---------------------------------------------------
State oil company Petroleos de Venezuela (PDVSA) will upgrade
its El Palito refinery, according to an article published by
LatinPetroleum.Com. The refinery's catalytic cracker will be
shut down for the upgrade during the first quarter of 2006.

PDVSA said the refinery's production capacity will increase
once all work is completed in 2009. Instead of producing 54,000
barrels per day, the catalytic cracker will be able to produce
as much as 73,000 bpd.

Meanwhile, the manager of PDVSA's 200,000 bpd Puerto La Cruz
refinery said that the planned maintenance on its catalytic
cracker will start on October 21 and will last for 45 days.

PDVSA is investing in its domestic refinery system to increase
its capacity to refine heavy crude oil and produce more
valuable crude for export.




                            ***********


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

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