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       T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Thursday, May 23, 2002, Vol. 3, Issue 101

                           Headlines



A R G E N T I N A

BANCO GALICIA: To Cut Salaries, Work Week To Save Costs
BANCO RIO: Botin Faces Arrest On Failure To Appear In Court
BISEL/SUQUIA/BERSA: Authorities Intervene, Fitch Ceases Ratings
BANCO SUQUIA: Workers Demand Solution To Bank's Financial Woes
PATAGON.COM: Pulling The Plug In Argentina

REPSOL YPF: Vice Chairman Likely To Be Named CEO
REPSOL YPF: Stake Sale Won't Entirely Solve Debt Woes
SOCIETE GENERALE/BANCO SUDAMERIS: Takeover Fears Unfounded
STEWART ENTERPRISES: Yet To Sell Argentine Operations


B A H A M A S

AES CORP: AES Plans Bahamian Entre To Florida Natural Gas Market


B E R M U D A

FLAG TELECOM: To Complete N. Asian Loop; Service To Korea, Japan
FOSTER WHEELER: CFO Resigns; Debt Negotiations Continue


B R A Z I L

CEMIG: Showing Signs Of Recovery
EMBRATEL: Telesp To Decide On Legal Action Soon


C H I L E

MANQUEHUE NET: Southern Cross Contemplates Purchase


C O L O M B I A

ENKA: Duff and Phelps Cuts Debt Rating On Missed Bond Payment


M E X I C O

GRUPO TMM: Grupo TFM Completes Consent Solicitation Successfully
MINING INDUSTRY: Workers Urge Domestic Market Focus From Gov't


U R U G U A Y

BANCO COMERCIAL: Moody's Cuts Foreign Currency Deposit Rating


     - - - - - - - - - -


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

BANCO GALICIA: To Cut Salaries, Work Week To Save Costs
-------------------------------------------------------
Argentina's No. 1 private bank Banco Galicia, which earlier this
month received Central Bank approval for a US$219-million rescue
plan from other local banks to ease a suffocating liquidity
crunch, plans to cut staff salaries and reduce their work week by
one day, reports Reuters.

Banking sources say that the move is part of an effort to cut
operating costs without firing workers in order to cope with the
country's depressed economy.

"It's something that is in the process of being made official,"
said a source at Galicia on condition of anonymity. "The idea is
that, within the crisis, you're cutting people's salaries but at
least they don't have to work as much."

According to the sources, monthly salaries below ARS800 (US$225)
would be cut by 8 percent, while those above that mark would be
cut by 12 percent.

In return, workers will work one day less per week, though a
rotating schedule will allow Galicia's 260 branches to retain
their current operating hours.

Banco Galicia is controlled by holding company Grupo Financiero
Galicia.

CONTACT:

BANCO DE GALICIA Y BUENOS AIRES S.A., HEAD OFFICE
Tte. Gral Juan D. Peron 407
1038 Buenos Aires, Argentina
Phone: +54-11-6329-0000
Fax: +54-11-6329-6100
Home Page: http://www.bancogalicia.com.ar
Contacts:
Eduardo J. Escasany,  Chairman and Chief Executive Officer
Sergio Grinenco, Chief Financial Officer

Corporate Communications
Phone: (54 11) 6329 6439
Fax:(54 11) 6329 6000 ext.: 2041

Representative Office:
Buenos Aires
Reconquista 144, piso 17
(1003) Buenos Aires, Argentina
Phone: (54-11) 4343-5200/5303/5162
Fax: (54-11) 4343-6576

New York Branch
300 Park Avenue, 20th Floor
New York, NY 10022
Phone: (1-212) 906-3700
Fax: (1-212) 906-3777

GRUPO FINANCIERO GALICIA S.A.
Teniente General Juan D. Per>n 456, Piso 3
1038 Buenos Aires, Argentina
Phone: (54 11) 4343 7528 / 9475
Home Page: http://www.gfgsa.com
Contacts:
Eduardo J. Escasany,  Chairman and CEO
Sergio Grinenco, CFO, Banco de Galicia y Buenos Aires


BANCO RIO: Botin Faces Arrest On Failure To Appear In Court
-----------------------------------------------------------
Ana Botin, president of Banco Santander Central Hispano SA unit
Banco Rio de la Plata SA, could get arrested if a federal judge
issues an international arrest warrant against her in response to
a request made by a lawyer representing 250 holders of frozen
bank accounts.

Carlos Wiater requested federal judge Mariano Berges issue a
warrant against Botin for failing to show up for questioning on a
case of alleged bank fraud after being subpoenaed for the second
time Monday.

Botin is a Spain-based SCH director, but Wiater argues that she
must answer before the judge as she is president of SCH's local
unit and is involved in its management.

Wiater said that his clients are not looking for the banking
restrictions to be lifted, but for SCH to keep its word.

"SCH launched a large-scale advertising campaign claiming that
deposits placed with its Rio de la Plata unit were guaranteed,
now it must honor its word," Wiater said.

Asked whether there was any chance that Botin could actually be
arrested, Wiater said that criminal proceedings have been opened
relating to a possible fraud. The attorney says Botin should not
be able to escape legal proceedings claiming she was not involved
in Rio de la Plata management as she is president of the entity.

He charged that SCH should be able to return the frozen deposits,
as it is a very large bank, which, moreover, transferred "large
sums" of money from Argentina.

CONTACT:  SANTANDER CENTRAL HISPANO S.A.
          Plaza de Canalejas,1
          28014 Madrid, Spain
          Phone: +34-91-558-10-31
          Fax: +34-91-552-66-70
          Email: investor@grupo.bsch.es
          Home Page: http://www.bsch.es
          Contacts:
          Ana P. Botn, Chairman, Banesto
          Emilio Botn-Sanz, Chairman
          Francisco G. Rold n, Financial Division General Manager

          Investor Relations:
          Phone: + 34.91.558.13.69
                 + 34.91.558.10.05
          Fax: + 34.91. 558.14.53
               + 34.91.522.66.70

          BANCO RIO DE LA PLATA S.A.
          Bartolome Mitre 480
          1036 Buenos Aires, Argentina
          Phone: +54-14-341-1081-1580
          Fax: +54-14-341-1074-1084
          Home Page: http://www.bancorio.com.ar
          Contacts:
          Ana Patricia B. S. de Sautuola y O'Shea, Chairman
          Jose L. E. Cristofani, Executive Vice Chairman and CEO
          Pablo Caride, Corporate Finance


BISEL/SUQUIA/BERSA: Authorities Intervene, Fitch Ceases Ratings
---------------------------------------------------------------
Argentina's Central Bank, in its role as that country's banking
system's regulator, announced Monday that federally owned Banco
de la Nacion would take charge of the operation of three
Argentine banks, all controlled directly and indirectly by
France's Credit Agricole: Banco Bisel, Banco Suquia, and Banco de
Entre Rios (BERSA). While BERSA opened for operations Tuesday,
the other two banks are closed to the public until Wednesday May
22. Banco Bisel, the largest of the three affected Argentine
banks, was the 11th largest private sector bank (15th overall) by
asset size as of year-end 2001.

Grouped together, the three banks would rank 7th among the
private banks by asset size at that date, holding a significant
market share of deposits of just over 6%, and a combined branch
network among the country's largest. The banks' presence was even
more important in several of Argentina's more significant
provinces, notably Cordoba, Entre Rios, and Santa Fe. In light of
this action , the ratings outstanding on Banco Bisel are
withdrawn, effective immediately.

Like many other foreign shareholders of Argentina based banks,
Credit Agricole had expressed a reluctance to inject further
resources into its Argentine operations without further clarity
of the outlook for the banking system going forward. With the
local banks' equity totaling ARP 590 million as of year-end 2001
(and the value in Euros of that equity eroded further since then
by the pesos devaluation), and with substantial country risk and
other reserves already in place, the intervention of the local
banks will not have a substantial effect on Credit Agricole's
financial results or on its current ratings.

The reluctance of a major global bank to inject resources to prop
up its Argentine subsidiary is yet another symptom of the chaotic
situation in Argentina's banking system today. This action will
only serve to exacerbate the public's loss of confidence in the
banking system and in the government's handling of the current
crisis. While public statements by members of the government have
portrayed the intervention in the banks as provisional, holding
out hope of further support from the shareholders of the bank,
but the likelihood of further support is colored by the extremely
negative operating environment in Argentina today.

Banco Bisel

--Long and short-term foreign currency debt ratings 'DDD'/ 'D'
withdrawn; Long-term local currency debt rating of 'DDD'
withdrawn; Support rating of '4T' withdrawn.

Credit Agricole

--Long and short-term foreign currency ratings of 'AA+'/ 'F1+'
affirmed; Individual and Support ratings of 'B' and '1' affirmed.

CONTACT:  Fitch Ratings
          Peter Shaw, 212/908-0553,
          Ricardo Chaves, 212/908-0606,
          Linda Hammel, 212/908-0303, (New York)
          Lorna Martin, +54-11 4327-2444, (Buenos Aires)
          Ana Gavuzzo +54-11 4327-2444, (Buenos Aires)

          Media Relations:
          James Jockle, 212/908-0547, (New York)


BANCO SUQUIA: Workers Demand Solution To Bank's Financial Woes
--------------------------------------------------------------
Nearly 50 Banco Suquia employees, one of the three banks taken
over by Argentina's Banco Nacion, occupied Suquia's Mendoza
branch to demand resolution to the bank's liquidity problems.

The bank was suspended after French parent Credit Agricole
announced it would stop supporting its Argentine subsidiaries,
including Banco Bisel and Banco Entre Rios (BERSA). The bank's
Argentine units suffered heavy losses due to devaluation of the
nation's, currency.

The bank employees union staged a general strike and organized a
march Thursday, demanding measures from the Central Bank to
prevent Credit Agricole from walking out with the nation's
savings.

The union foresees danger to the jobs of at least 20,000 bank
workers as a result of the financial system's breakdown following
restrictions to depositor's access to bank accounts.

Banco Suquia President Jose Porta on Tuesday called the bank's
2,160 employees to remain calm, assuring them that a solution to
the bank's problem will be found.

Banco Nacion Argentina will take charge of Banco Suquia and the
Credit Agricole's two other subsidiaries until a buyer can be
found.

Banco Suquia S.A., known as Banco del Suquia S.A. provides a full
range of financial services to individuals and corporate
customers in the area of commercial banking. It has 100 branches
nationwide.


PATAGON.COM: Pulling The Plug In Argentina
------------------------------------------
Patagon.com, the online banking and brokerage unit of Santander
Central Hispano SA (SCH), decided to close its Argentine
operations on May 31 after its parent refused to infuse more
funding.

In the first quarter, Patagon reported a loss of EUR596 million,
down from a loss of EUR5.17 billion in the same period of 2001.
In Argentina, Patagon had 2,000 brokerage clients and traded an
average US$1.5 million in equities and debt each session.

Patagon's problems in Argentina stem from the country's
protracted economic crisis and the currency devaluation
implemented by the government in January, which have reduced
stock-trading volume to virtually zero.

In addtition, a Buenos Aires court froze Patagon's corporate bank
accounts early this month after employees filed a lawsuit
claiming that the management had embezzled US$45 million from a
workers' compensation fund.

CONTACT:  PATAGON (Argentina)
          Peru 375, 6 Piso
          Buenos Aires, Argentina
          Belen Galleppi
          Tel: 00-54-11-4343-7200
          Home Page:
          http://www.patagon.com.ar/Default.asp?rnd=0.211651
          Contact: Javier Bolzico, Market manager

          SANTANDER CENTRAL HISPANO S.A.
          Plaza de Canalejas,1
          28014 Madrid, Spain
          Phone: +34-91-558-10-31
          Fax: +34-91-552-66-70
          Home Page: http://www.bsch.es
          Contacts:
          Ana P. Botin, Chairman, Banesto
          Emilio Botin-Sanz, Chairman
          Francisco G. Rold n, Financial Division General Manager

          Investor Relations:
          Phone: + 34.91.558.13.69
                 + 34.91.558.10.05
          Fax: + 34.91. 558.14.53
               + 34.91.522.66.70

          SCH in Argentina
          Rivadavia 611, piso 11
          1002 Buenos Aires
          Phone: 00 54 1143421684
          Fax.: 00 54 1143422976


REPSOL YPF: Vice Chairman Likely To Be Named CEO
------------------------------------------------
Ramon Blanco, who has served as vice chairman of Repsol YPF since
2000, is likely to be named CEO of the Spanish oil company, says
Bloomberg. The decision to appoint a CEO is part of the oil and
gas group's efforts to strengthen its management team to combat a
very difficult year.

Investors have hurled criticisms at the Company's management led
by Chairman Alfonso Cortina after Repsol's shares fell 19 percent
this year as the oil producer shed assets to offset a drop in
earnings from its Argentine business.

Blanco reportedly has the backing of Caja de Ahorros y Pensiones
de Barcelona SA, or La Caixa, Repsol's biggest shareholder, and
Banco Bilbao Vizcaya Argentaria SA, the No. 2 shareholder,
Expansion newspaper said. Repsol has never had a CEO since it was
founded in 1985.

CONTACT:  REPSOL YPF
          Paseo de la Castellana 278
          28046 Madrid, Spain
          Phone   +34 91 348 81 00
          Home Page: http://www.repsol.com
          or
          Av. Roque S enz Pe a, 777.
          C.P 1364. Buenos Aires
          Argentina
          Contacts:
          Alfonso Cortina De Alcocer, Chairman
          Ramon Blanco Balin, Vice Chairman
          Carmelo De Las Morenas Lopez, CFO


REPSOL YPF: Stake Sale Won't Entirely Solve Debt Woes
-----------------------------------------------------
Even if it books a net profit of EUR840 million from the sale of
23 percent stake in Spain's largest natural gas company Gas
Natural SDG SA, the Spanish-Argentine oil and energy group
Repsol-YPF SA is not yet off the hook.

A Dow Jones report said that, while the group anticipates the
sale will reduce goodwill on its books by EUR52 million and lower
its debt ratio to 37.7 percent from 43.4 percent, it is still
some way from ridding itself of the overhanging problem of its
exposure to Argentina. The exposure concerns are predicted to be
weighing on the Company's share price and ratings for the
foreseeable future.

"It's still the key factor for the stock...and every day it
weighs more and more," said a Madrid-based trader.

The sale of the stake, completed May 23, reduces Repsol-YPF
ownership in Gas Natural to 24 percent from 47 percent.

The reduction of Spanish assets means Repsol-YPF is even more at
risk from its major presence in Argentina.

That's a view reflected in rating agency assessments.

"There exists a significant degree of risk that factors remaining
largely beyond management's control may have a negative impact on
future performance, not least the possibility of additional
measures taken by the Argentine government," said Fitch in a
recent report.

The oil giant can't walk away from Argentina and its ongoing
problems. It's locked into the country's political and economic
volatility courtesy of its US$15 billion purchase of Argentina's
YPF in 1999.

The situation in Argentina is still considered critical, and
there are concerns that the government may be considering further
measures that will negatively affect oil companies.

At the end of the first quarter, Repsol-YPF's net financial debt
was EUR16.67 billion. The Company says that following the Gas
Natural sale, its debt will be reduced by EUR2.89 billion. The
total amount of debt, including the effect on its cash position
and the change in consolidation, will be cut by EUR4.68 billion.


SOCIETE GENERALE/BANCO SUDAMERIS: Takeover Fears Unfounded
-----------------------------------------------------------
Cabinet Chief Minister Alfredo Atanas denied any takeover
attempts of the Argentine operations of Societe Generale and
IntesaBci SpA unit Banco Sudameris by Banco de la Nacion.

The minister responded to a Pagina 12 newspaper report, which
suggested that Sudameris could announce its withdrawal from
Argentina this week, while SocGen may follow suit a few days
afterwards.

An IntesaBci spokeman confirmed there has been no plan to leave
Argentina.

Todo Noticias, citing government sources, also reported that a
Sudameris pullout is very unlikely, noting that it just received
an injection of US$50 million from its parent.

The government, though, admits the possibility of shedding some
banks due to the financial crisis that the country is undergoing.

Societe Generale Group is a European banking group that operates
in three business lines: retail banking, corporate and investment
banking; and asset management and private banking.

IntesaBci Canada, through a network of branches, as well as
electronic delivery channels, provides a broad array of banking
products and financial services.

CONTACT:  SOCIETE GENERALE
          29, Boulevard Haussmann
          75009 Paris, France
          Phone: +33-1-42-14-20-00
          Fax: +33-1-42-14-54-51
          E-mail: investor.relations@socgen.com
          Home Page: http://www.socgen.com
          Contacts:
          Pierre-Guillaume de Pompignan, Investor Relations
          Carole Noel, Investor Relations Assistant
          E-mail: investor.relations@socgen.com

          BANCO DE LA NACION ARGENTINA
          Bartolome Mitre, 326
          1036 Buenos Aires, Argentina
          Phone: +54-11-4347-6000
          Fax: +54-11-4347-8078
          Home Page: http://www.bna.com.ar/
          Contacts:
          Enrique Olivera, President
          Adolfo Martin Prudencio Canitrot, Deputy VP


          BANCO SUDAMERIS ARGENTINA
          Tte. Gral. Juan Domingo Per¢n, 500
          C1038AAJ Buenos Aires
          Casilla De Correo 1849
          Phone: +54 11 43295200 / 43295300 / 43314061
          Fax: +54 11 43342398
          Home Page: Www.Sudameris.Com.Ar
          E-Mail: Marketing@Sudameris.Com.Ar

          INTESABCI SPA
          c/o Banco Sudameris Argentina S.A.
          San Martin 195 - Piso 1ø
          1038 Buenos Aires
          Phone: +54 11 43295388
          Fax: +54 11 43433402
          E-mail: amdileo@sudameris.com.ar


STEWART ENTERPRISES: Yet To Sell Argentine Operations
-----------------------------------------------------
Stewart Enterprises, Inc. announced Tuesday that it has executed
a purchase agreement with Celebris Memorial Services, Inc., a
Canadian company based in Quebec, for the sale of its operations
in Canada. The sale is subject to regulatory approval, which the
Company expects to receive within sixty days. All proceeds
received at the time of closing will be used to reduce the
Company's debt balance.

William E. Rowe, President and Chief Executive Officer, stated,
"Closing on the sale of our Canadian operations will bring us
another step closer to achieving our goal of reducing debt to
$500 million, or about 2.5 times domestic EBITDA during 2003.
Management continues to deliver on the initiatives previously
outlined, and the execution of this purchase agreement confirms
our commitment to those initiatives. The proceeds to be received
from the sale of our Canadian operations represent the Company's
second largest foreign asset sale.

We have now executed agreements to sell our operations in eight
of the ten foreign countries where we had businesses held for
sale, with only France and Argentina remaining, at prices
consistent with our initial assessment. We expect to complete the
sales of our operations in France and Argentina during 2002."

Founded in 1910, Stewart Enterprises is the third largest
provider of products and services in the death care industry in
the United States, currently owning and operating 312 funeral
homes and 150 cemeteries domestically.

To see latest financial statements:
http://bankrupt.com/misc/Stewart_Enterprises.txt

CONTACT:  STEWART ENTERPRISES INC., Metairie
          William E. Rowe, 504/837-5880



=============
B A H A M A S
=============

AES CORP: AES Plans Bahamian Entre To Florida Natural Gas Market
----------------------------------------------------------------
AES Corporation is planning to construct an LNG receiving &
regasification terminal in the Bahamas and a natural gas pipeline
connecting the facility to the U.S. via Florida. Houston-based
Industrial Information Resources reports AES Corporation is not
the only player in this market. El Paso Corporation (Houston)
(NYSE:EP) and the embattled Enron Corporation (Houston) are also
planning LNG receiving facilities in the Bahamas and transmission
pipelines connecting them to U.S. markets in Florida.


CONTACT:  Industrialinfo.com, Houston
          Mike Bergen
          Phone: 713/783-5147



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

FLAG TELECOM: To Complete N. Asian Loop; Service To Korea, Japan
----------------------------------------------------------------
FLAG Telecom Holdings Limited (Nasdaq: FTHLQ; LSE: FTL), along
with its group companies ("FLAG Telecom"), announced Tuesday that
it has reached another major milestone in the completion of the
FLAG North Asian Loop cable system, or "FNAL", further cementing
FLAG Telecom's position as a leading independent network services
provider in the Asian region.

Ed McCormack, Chief Operating Officer said, "As part of the
continuing progress being made on the construction of FNAL, we
are pleased to announce that another major segment, the route
between Seoul, Korea and Tokyo, Japan has been brought into
service. This is the second segment of the system to go into
service. The first segment, between Hong Kong and Tokyo, which
was constructed by Reach, has been in service since last year.
The remaining segment from Seoul to Hong Kong, required to close
the loop, is at a very advanced stage and is expected to enter
service this quarter."

This announcement follows the order entered by the U.S.
Bankruptcy Court on May 14th, 2002, confirming the agreement
among FLAG, Reach and Alcatel to enable FNAL to be completed.
Alcatel is the main supplier for FNAL. Completion of FNAL may
provide FLAG Telecom with an additional source of revenue as it
continues the process of restructuring.

FNAL is an integral part of the FLAG global network, providing
reinforcement to the traffic flows on the FLAG Europe Asia
("FEA") cable in the Asia region. It is a high capacity six fiber
pair redundant loop system, upgradeable using leading Dense Wave
Division Multiplexing ("DWDM") technology. Following loop
closure, it will allow FLAG Telecom to support the strong growth
in intra-Asia Internet traffic and provide intra-regional, city-
to-city connectivity between Hong Kong, Seoul, Tokyo and Taipei,
and on to the rest of the world.

On April 12 and April 23, 2002, FLAG Telecom Holdings Limited and
certain of its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the Southern
District of New York. Also, FLAG Telecom Holdings Limited and the
other companies continue to operate their businesses as Debtors
In Possession under Chapter 11 protection. FLAG Telecom Holdings
Limited and certain of its Bermuda-registered subsidiaries - FLAG
Limited, FLAG Atlantic Limited and FLAG Asia Limited - filed
parallel proceedings in Bermuda to seek the appointment of
provisional liquidators to obtain a moratorium to preserve the
companies from creditor actions. Provisional liquidators were
appointed and part of their role is to oversee and liaise with
the directors of the companies in effecting a reorganization
under Chapter 11.

CONTACT:  FLAG Telecom
          John Draheim, VP Corporate Services
          Phone: +44 20 7317
          E-mail: jdraheim@flagtelecom.com

          David Morales, VP Corporate Finance & Investor
                                                Relations
          Phone: +44 20 7317 0837
          E-mail: dmorales@flagtelecom.com

          Brunswick Group
          Mike Buckley
          Phone: 212/333-3810
          E-mail: mbuckley@brunswickgroup.com


FOSTER WHEELER: CFO Resigns; Debt Negotiations Continue
-------------------------------------------------------
Foster Wheeler Ltd. announced Tuesday that Gilles A. Renaud,
senior vice president and chief financial officer, has resigned
his position to pursue other opportunities.

"Mr. Renaud has made a number of valuable contributions to Foster
Wheeler during the past two years, and we wish him well in his
future endeavors," said Raymond J. Milchovich, chairman,
president and chief executive officer of Foster Wheeler Ltd.

Mr. Renaud joined Foster Wheeler in March 2000. He was previously
vice president and treasurer of United Technologies Corporation.

The company is conducting a search and evaluating internal
candidates for a successor. In the interim, Robert D. Iseman,
vice president and treasurer, has been named the acting principal
financial officer, and will continue to work closely with other
financial executives of the company as well as previously
retained financial consultants to Foster Wheeler.

"I am very confident that with our team of highly capable
personnel and our external consultants, we have the necessary set
of financial skills available to very professionally manage all
of our financial issues during this transition period," continued
Mr. Milchovich.

Meanwhile, the management of Foster Wheeler is continuing its
discussions with the Company's lenders and various other
financial institutions regarding a new long-term credit facility
and a replacement for its lease financing and receivables sale
arrangement.

Company chairman, president and chief executive Raymond J.
Milchovich said that a delay in negotiations was the engineering
and construction-services company's fault because it had focused
its attention on a poorly performing U.S. unit.

According to analysts, bondholders for now have adopted a wait-
and-see attitude as the Company's negotiations with its bank
creditors have been extended through May 30.

The company's bonds are quoted by traders at prices in the mid-
40s to mid-50s, distressed levels that indicate a "perception
that a Chapter 11 bankruptcy filing may be around the corner,"
said one analyst at a New York -based investment firm.

Joel Levington, an analyst at Standard & Poor's Corp., warned
that if the company cannot come to terms with its banks, its
creditors could accelerate their claims, resulting in the
potential for default.

The bank facility, which is $270 million, is unsecured and the
banks wouldn't want to stand in line with everyone else in a
bankruptcy proceeding, he added.

There is a "strong incentive for the banks to work with the
Company," he said, adding that, if a deal is reached, it "should
alleviate the company's short-term liquidity needs."

Foster Wheeler's debt is rated B3 by Moody's Investors Service
and is under review for possible further downgrade. The debt is
rated single-B-plus by Standard & Poor's Corp. and is on a
negative watch.

The company has outstanding US$200 million of senior unsecured
notes that mature in 2005 and US$210 million of convertible
subordinated notes that mature in 2007.

Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research,
plant operation and environmental services. The corporation is
based in Hamilton, Bermuda, and its operational headquarters are
in Clinton, N.J.

To see financial statements:
http://bankrupt.com/misc/Foster_Wheeler.txt

CONTACT:          Foster Wheeler Ltd.
                  Media Contact: Alastair Davie, 908/730-4444
                  Shareholder Contact: John Doyle, 908/730-4270
                  Other Inquiries: 908/730-4000



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

CEMIG: Showing Signs Of Recovery
--------------------------------
Cia. Energetica de Minas Gerais, Brazil's biggest combined power
distributor and generator, informed the Sao Paulo Stock Exchange
that it had a first-quarter profit of BRL220 million (US$89
million), reversing a loss of BRL12.5 million in the same period
in 2001.

The profit was partly brought about by a 16.5 percent increase in
rates in April last year that helped offset a drop in sales as a
result of power rationing that ended in early March, said Luiz
Fernando Rolla, Cemig's investor relations director.

Net revenue rose 28 percent to BRL1.2 billion from BRL935 million
a year earlier, boosted by a BRL315 million in government
compensation for losses because of power rationing, Rolla said.

"It shows the Company is recovering but that the result was
distorted by the compensation," said Sergio Tamashiro, a power
utility analyst at Uniao de Bancos Brasileiros SA, who has a buy
recommendation on the stock.

"Sales are still weak and they will likely begin to recover in
the second quarter."

Cemig, based in Belo Horizonte, also benefited from a currency
gain of BRL3.7 million on its dollar-denominated debt compared
with a loss of BRL123 million a year earlier. About 53 percent of
Cemig's BRL2.3-billion debt is denominated in foreign currency.

The Brazilian real weakened only 0.6 percent in the first
quarter, after declining 9.3 percent in the same quarter a year
earlier.

Cemig saw its preferred shares rise as much as 3.3 percent to
BRL33.79 at the Sao Paulo stock exchange. The stock has fallen
8.6 percent over the past three months, or more than the 6.4
percent decline in the Bovespa stock index.

The state of Minas Gerais controls 51 percent of the voting
shares of Cemig.

CONTACT:  CEMIG
          Avenida Barbacena, 1200
          Sto Agostinho  30123-970 Belo Horizonte - MG
          Brazil
          Phone   +55 31 299 4900
          Home Page http://www.cemig.com.br
          Contacts:
          Djalma Bastos De Morais, Chairman
          Geraldo De Oliveira Faria, Vice Chairman
          Cristiano Correa De Barros, Finance Director



EMBRATEL: Telesp To Decide On Legal Action Soon
-----------------------------------------------
Telefonica SA's Brazilian fixed-line unit Telesp is reviewing the
possibility of suing long-distance carrier Embratel Participacoes
SA for blocking its entry into Brazil's long-distance phone
market.

"We're studying this. We should make a decision in the next few
days," according to a Telesp official.

Embratel, controlled by embattled U.S.-based WorldCom Inc., won a
court order April 29 preventing Telesp from offering domestic and
international long-distance service nationwide in Brazil's 27
states. Telesp's first appeal of the injunction was upheld. A
second appeal has been filed.

Embratel's legal filing against regulator Anatel claims Telesp
engages in anticompetitive pricing behavior. Telesp has denied
Embratel's claims.

Taking into account foregone revenue and investment, losses
stemming from the injunction total BRL28 million (US$1=2.50) and
run at BRL2.0 million a day, Telesp said.

Embratel was acquired by WorlCom unit MCI for US$2.3 billion in
the privatization of Brazil's telecommunications system in 1997.
The Company was once the jewel of WorldCom's international
properties. But, like other long-distance carriers around the
world, Embratel has suffered from a decline in revenue as
competitors gnawed at its once monopolistic domination of the
market. Embratel posted a US$16-million loss, or 5 cents a share,
in the first quarter of the year, an 8-percent increase compared
to BRL33.7 million in the year-ago period.

To see Embratel's latest financial statements:
http://bankrupt.com/misc/Embratel.txt

CONTACT:  EMBRATEL PARTICIPACOES S.A.
          Investor Relations
          Silvia Pereira
          Tel. (55 21) 2519-9662
          Fax: (55 21) 2519-6388
          Email: Silvia.Pereira@embratel.com.br
                 invest@embratel.com.br
                  or
          Press Relations:
          Helena Duncan/Mariana Palmeira
          Tel: (55 21) 2519-3653/3654
          Fax: (55 21) 2519-8010
          Email: hduncan@embratel.com.br
                 mpalm@embratel.com.br



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

MANQUEHUE NET: Southern Cross Contemplates Purchase
---------------------------------------------------
Chilean competitive local exchange carrier Manquehue Net has
drawn the interest of U.S.-based investment fund Southern Cross,
reports Business News Americas. Southern Cross entered Chile's
telecoms sector earlier in the year bailing out long distance
operator Telex Chile.

According to Telex president Norberto Morita, they have been in
contact with Manquehue Net about an investment in the Company.

"[Manquehue Net] is a company that has potential synergies,"
Morita said, adding that Manquehue has a network that could
complement Telex's.

However, Southern Cross has still not fully determined in what
direction it will develop Telex, which would be a factor in
making a decision on the Manquehue opportunity, he noted.

Fitch Chile analyst Ivonne Ibanez said that Manquehue's network
could be of value to Telex, particularly if the company wants to
expand its corporate services. However, Ibanez said she doubted
Southern Cross, having already acquired heavily indebted Telex,
would be willing to buy Manquehue and its CLP80.1 billion (US$123
million) of debt.

CONTACT:  MANQUEHUE NET S.A.
          Av. Condor 796, Enterprise City,
          Huechuraba Santiago Chile
          Phone: 00 562 243 8800
          Fax: 00 562 248 7292
          EMAIL: info@manquehue.netl
          Home Page: http://www.manquehue.net/
                     http://www.manquehue.cl
          Contact:
          Mr. Miller Williams, President
          Sr.Jos‚ Luis Rabat Vilaplana, Vice President



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

ENKA: Duff and Phelps Cuts Debt Rating On Missed Bond Payment
-------------------------------------------------------------
Credit-rater Duff and Phelps de Colombia on Monday said it was
downgrading Colombian synthetic fiber maker Enka's debt rating to
"DD", or "default."

Reuters reports the rating service is taking the action after
Enka, which is controlled by Colombian conglomerate Sindicato
Antioqueno, missed a payment due in May on bonds issued in 1996.

"This issue is now failing to meet payments," the credit-rater
said.

Enka ended 2001 with a net loss of COP9.3 billion (US$3.9
million) in 2001, from COP1.5 billion (US$640,000) in 2000, due
to stiff competition from Asian manufacturers, according to its
controller.

During the first three months of the year, Enka posted a net loss
of COP4.7 billion, or about US$2 million.

CONTACT:  ENKA DE COLOMBIA, S.A.
                       Carrera 63 49A-31, floor 9
                       P.O. BOX 5233
                       Medell¡n, Colombia
                       Home Page: http://www.enka.com.co/
                       Contact
                       Financial Administration
                       Tel. : +(57 4) 405 5132
                       Fax : +(57 4) 405 5130
                       E-mail: camacol@enka.com.co

                       Investors Services
                       Tel. : +(57 4) 405 5511
                       Fax : +(57 4) 405 5110
                       E-mail: adriana.arango@enka.com.co



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

GRUPO TMM: Grupo TFM Completes Consent Solicitation Successfully
----------------------------------------------------------------
In an official company news release, Grupo TMM, S.A. de C.V. and
Kansas City Southern, owners of the controlling interest in Grupo
Transportacion Ferroviaria Mexicana, S.A. de C.V. announced the
successful completion of Grupo TFM's subsidiary, TFM, S.A. de
C.V.'s ("TFM"), previously announced consent solicitation. The
Company received consents from a majority of the holders of each
of TFM's 10.25 percent Senior Notes due 2007 and 11.75 percent
Senior Discount Debentures due 2009 (together, the "Notes") in
connection with specified amendments to each of the indentures
pursuant to which the Notes were issued. All withdrawal rights
with respect to the consent solicitation have now been
terminated.

The consent solicitation process began on May 9, 2002, and
expires May 21 at 5 p.m., Eastern Standard Time. The terms of the
consent solicitation are described in the Amended and Restated
Consent Solicitation Statement dated May 9, 2002, and the
Supplement thereto, dated May 17, 2002.


CONTACT:  Grupo TFM
          Jacinto Marina
          Phone: 011-525-55-629-8790
          E-mail: jacinto.marina@tmm.com.mx

          Leon Ortiz
          Phone: 011-525-55-447-5800
          E-mail: lortiz@gtfm.com

          Dresner Corporate Services
          (general investors, analysts and media)
          Kristine  Walczak
          Phone: 312/726-3600
          E-mail: kwalczak@dresnerco.com


MINING INDUSTRY: Workers Urge Domestic Market Focus From Gov't
--------------------------------------------------------------
The Mexican government is now facing pressure from the mining
industry workers to pay attention to the domestic market and
guarantee its economic recovery.

Napoleon Gomez Urrutia, leader of the Mining and Metallurgical
Workers Union, pointed out that the companies in the sector are
going through a very difficult financial situation that may lead
to layoffs.

The economic situation of Mexican companies, including Altos
Hornos de Mexico, Grupo Mexico, Autlan and Sicartsa, is very
alarming as there is no obvious way out of the problems in the
short term.

Altos Hornos has been under a suspension of payments for three
years and its situation is uncertain despite a debt restructuring
process. If the company goes bankrupt, the economic activity of
Coahuila will decline 6.5 percent since the company employs
17,000 people directly and another 120,000 indirectly, said the
union.

The mining industry shed 5,000 jobs last year as a product of the
economic crisis. However, Gomez said there were significant
investment programs in the pipeline, especially in copper and
coal mining, which shows the investors' confidence in the sector.



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

BANCO COMERCIAL: Moody's Cuts Foreign Currency Deposit Rating
-------------------------------------------------------------
Moody's Investors Service downgraded the long-term foreign
currency deposit rating of Uruguayan bank Banco Comercial S.A. to
B1 from Ba3 and placed it on review for further downgrade.

The actions followed Moody's downgrade of the Republic of
Uruguay's foreign currency country ceilings for bank deposits to
B1 from Ba3, which remain on review for possible downgrade.

The agency also placed on review for possible downgrade the Ba2
foreign currency ceiling for bonds and notes, and the Ba2 local
currency issuer rating for government bonds.

Earlier this month, Standard & Poor's also lowered its local and
foreign currency counterparty credit and its long-term CD ratings
on Banco Comercial to single-'B'/'C' from double-'B'-minus/'B'.
The CreditWatch implications were revised to Developing.

The rating actions resulted from the need to recapitalize the
bank, which stems from the negative effect on its financials of
its direct and indirect exposure to Argentina. Alleged improper
activities carried out at Banco General de Negocios S.A., an
Argentine institution that has been suspended by the Central Bank
of Argentina, also affected the ratings on Banco Comercial, S&P
said.

Banco Comercial is Uruguay's largest domestically owned private
bank. As of December 31, 2000, Comercial had US$1.9 billion in
assets, US$1.6 billion in deposits, and US$151 million in equity.

S&P revealed that Banco Comercial already received US$133 million
of fresh funds in equal portions from its foreign shareholders -
JPMorganChase Bank, Credit Suisse First Boston, and Dresdner Bank
Lateinamerika-, and from the Uruguayan government.

By means of this capital injection, the government entered into
the bank's ownership, and is now managing the bank. The magnitude
of the loss is still undetermined, however, and the bank will
probably need further assistance, S&P said.

The shareholders are currently analyzing the alternatives to
recapitalize the bank.

CONTACTS:  CREDIT SUISSE GROUP
           P.O. Box 1
           CH-8070 Zurich
           Tel. +41 (1) 212 16 16
           Fax. +41 (1) 333 25 87
           Contact: Lukas Muehlemann, chairman & CEO

           J.P. MORGAN CHASE & CO.
           Investor Relations
           J.P. Morgan Chase & Co.
           270 Park Avenue
           New York, NY 10017-2070
           (1-212) 270-6000
           URL: www.jpmorganchase.com

           DRESDNER BANK LATEINAMERIKA AG
           Neuer Jungfernstieg 16
           20354 Hamburg, Germany
           Tel.:   (+49 40) 3595-0
           Fax:   (+49 40) 3595 3314
           Telex:   214 236-0 dl d
           S.W.I.F.T. DRES DE HL
           E-Mail:   public-relations@dbla.com



               ***********


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

Troubled Company Reporter Latin American is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Ma. Cristina Canson, Editors.

Copyright 2002.  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
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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is $575 per half-year,
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