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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

           Tuesday, June 11, 2002, Vol. 3, Issue 114

                           Headlines


A R G E N T I N A

BANCO GALICIA: Welcomes New President, CEO
DISCO: Weighing Down On Parent's Growth Performance
PEREZ COMPANC: Seeks Board Approval For New Bond Sale
TELECOM ARGENTINA: Peso Devaluation Overwhelms Net Worth


B E R M U D A

MUTUAL RISK: Milberg Weiss Files Class Action Suit
TYCO INTERNATIONAL: Conference Call Discusses Priorities
TYCO INTERNATIONAL: Ongoing Investigations Prompt S&P Cut
TYCO INTERNATIONAL: S&P Drops CIT Group Ratings
TYCO INTERNATIONAL: Turmoil Continues; Moody's Cuts Ratings
TYCO INTERNATIONAL: Bond-Downgrades Drag Down Share Value


B R A Z I L

AES SUL: Pays Debt Counter Rumors Of Imminent Collapse
ELETROPAULO METROPOLITANA: S&P Questions Debt Coverage Ability


M E X I C O

CORPORACION DURANGO: Rolling Over Debt With New 7-Yr Notes
ENRON: Finalizes Sale-and-Purchase Agreement With Tractebel
GRUPO BITAL: Counting On ING Funding This Month
GRUPO MEXICO: Talks Fail To Pacify Striking Workers
GRUPO TFM: Completes Existing Securities Consent; Prices Bonds
SAVIA: Shares Up As Unit Nears Debt-Restructuring


V E N E Z U E L A

FERTINITRO FINANCE: Fitch Lowers Ratings Over Debt Service Doubt
SUDAMTEX: Collapses Under New Market, Tariff Conditions


     - - - - - - - - - -


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

BANCO GALICIA: Welcomes New President, CEO
------------------------------------------
Banco de Galicia y Buenos Aires' recently-appointed board of
directors named Juan Martin Etchegoyhen and Eduardo Arrobas as
president and chief executive officer (respectively), of the
ailing bank late Thursday, reports Dow Jones Newswires.

"It's a new phase for the bank, but that doesn't change the
fundamental problems the institution is facing," said Rafael Ber,
senior analyst with Argentine Research. "A severe liquidity
crunch."

The new executives are faced with a difficult task of finding a
partner to capitalize Argentina's largest private commercial
bank. The bank has said that it hopes to get up to US$300 million
in fresh capital through a swap of its debts with international
creditors for an equity stake in the Company.

To keep operating, Galicia has already received about ARS800
million (US$1=ARS3.66) from the central bank of Argentina and the
nation's bank insolvency fund to bolster its reserves.

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

          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


DISCO: Weighing Down On Parent's Growth Performance
---------------------------------------------------
Despite strong first quarter results, international food retailer
Ahold is wary that operations in Argentina, together with those
in Spain, may affect growth results of the company as a whole.

The severe economic slow-down in Argentina is expected to hamper
operating earnings growth at Disco, which Ahold holds through a
partnership, Disco Ahold International Holdings N.V.

Continuous weakness in the exchange rate is expected to increase
Disco's U.S. denominated debts and to affect further net earnings
at Disco. Ahold no longer adjusts the negative net income in
Disco Ahold International Holdings for minority interests,
thereby increasing the negative impact of the currency
devaluation on Ahold's net earnings.

The delay in the integration of Ahold Spain and Superdiplo is
also expected to affect growth forecasts at Ahold. The delay is
predicted to make earnings from Spain fall short of target.

Still, Ahold executives expect organic sales to increase 6-8% and
operating earnings to rise by approximately 15%, excluding
currency changes and goodwill amortization.

Report of better-than-expected first quarter results increased
Ahold shares 3 percent to E22.76 in early trading in Amsterdam.

Group shares had lost nearly 5 percent April when, on re-
computation to comply with US accounting standards, net earnings
in 2001 was shown to have fallen 85 per cent instead of
increasing 36 per cent basing on Dutch accounting. The
discrepancy showed a goodwill impairment charge taken in the US
version of the accounts relating to the company's stake in Disco.

Ahold's sales rose 22 per cent to E22.2bn ($20bn). Net profit was
3.8 per cent higher at E328m. Earnings per share fell almost 7
per cent from E0.37 to E0.34. Earnings are also expected to rise
faster in the second half of the year than in the first.

CONTACT:  DISCO S.A.
          Larrea 847, Piso 1
          1117 Buenos Aires, Argentina
          Phone: +54-11-4964-8000
          Fax: +54-11-4964-8039
          Home Page: http://www.disco.com.ar
          Contacts:
          Eduardo R. Orteu, Chief Executive Officer
          Jose Sanchez, Chief Financial Officer


PEREZ COMPANC: Seeks Board Approval For New Bond Sale
-----------------------------------------------------
Argentine oil company Perez Companc SA disclosed in a stock
exchange filing Friday that it wants to sell $1.5  billion in new
bonds, raising the amount of medium term securities it can have
by 150% over the amount originally approved in 1998, reports Dow
Jones Newswires.

The Company seeks approval on the transaction from the board of
directors June 20.

The move comes amid the Company's efforts to seek loans from the
International Finance Corp., the World Bank's private investment
arm, to the tune of US$100 million to be used to develop its
Venezuelan upstream portfolio.

Another US$250 million would be syndicated among banks
participating in financing for the Venezuelan projects. The loans
may be approved in June or July, according to company officials.

Meanwhile, Perez Companc is also looking to refinance its US$843-
million debt maturing at the end of the year.

However, the Company's plans to restructure its debt are likely
to encounter hurdles as Congress studies new legislation clamping
down on drillers, refiners and roadside gasoline retailers.

Perez Companc, Latin America's largest privately-held oil
company, posted a loss of US$231.5 million, or ARS681 million
(US$1=ARS3.66) in the first quarter of 2002.

To see financial statements:
http://bankrupt.com/misc/Perez_Companc.pdf

CONTACT:  PECOM ENERGIA S.A. DE PEREZ COMPANC S.A.
          Maipu 1 Piso 22 C1084ABA
          Buenos Aires, Argentina
          Phone: (54-11) 4344-6000
          Fax: (54-11) 4344-6315
          Home Page: http://www.pecom.com.ar/
          Contacts:
          Jorge Gregorio Perez, Chairman and Pres.
          Oscar Anibal Vicente, Vice Chairman and CEO

          Investor Relations:
          Daniel Rennis
          drennis@pecom.com

          Alberto Jankowski
          ajankows@pecom.com

          Phone:(5411)4344-6655


TELECOM ARGENTINA: Peso Devaluation Overwhelms Net Worth
--------------------------------------------------------
Telecom Argentina, the country's No.1 telephone company, saw its
net worth slashed to about US$30 million, or less than 2 percent
of what it was worth prior to the January devaluation, says
Reuters.

The Company said its net worth was ARS113 million, compared to
its end-2001 value of US$2.37 billion. The previous figures came
prior to January's rupture of the currency peg that had made one
Argentine peso equal to one dollar for the previous decade.

In the first-quarter of the year, Telecom Argentina posted a loss
of ARS2.3 billion ($621 million) due to weaker demand amid a
chaotic four-year recession and the government's decision to
freeze utility rates despite the devaluation.

In April, the Company suspended principal payments on its debt,
which is estimated at about US$3.4 billion.

Telecom Argentina is 54.7 percent controlled by Nortel Inversora,
a holding company owned in equal parts by France Telecom and
Telecom Italia. Most analysts believe the Telecom's primary
shareholders are unwilling to inject fresh funds into the
Company.

CONTACT:  TELECOM ARGENTINA STET - FRANCE TELECOM SA(TELECOM)
          Alicia Moreau de Justo 50, 10th Floor
          Capital Federal (1107) Repoblica Argentina
          Phone: +54 11 4968 4000
          Home Page: http://www.telecom.com.ar
          Contacts:
          Alberto J. Ricciardi, Chief Financial Officer
          Elvira Lazzati, Finance Director
          Pedro Insussarry, Investor Relations Manager
          Phone: (5411) 4968-3626/3627
          Fax: (5411) 4313-5842/3109
          Email: inversores@intersrv.telecom.com.ar



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

MUTUAL RISK: Milberg Weiss Files Class Action Suit
--------------------------------------------------
Milberg Weiss announced Friday that a class action has been
commenced in the United States District Court for the Southern
District of California on behalf of purchasers of Bermuda-based
Mutual Risk Management Ltd. publicly traded securities during the
period between February 16, 2000 and April 2, 2002 (the "Class
Period"). Those wishing to serve as lead plaintiff, must move the
Court no later than 60 days from Friday.

The complaint charges Mutual Risk and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
The complaint alleges that during the Class Period, Mutual Risk
and its most senior officers and directors disseminated
materially false financial statements for each of Mutual Risk's
interim quarters during that period and for the years ended
December 31, 2000 and 2001, which materially overstated the
Company's cumulative revenues and its net income. Defendants also
made a series of other materially false and misleading statements
about Mutual Risk and its financial condition and performance. As
a result of the materially false and misleading statements and
omissions described herein, Mutual Risk stock was inflated to an
all-time high of $23.75 per share.

Mutual Risk also represented in each of its quarterly and annual
filings with the SEC that the financial statements included
therein had "been prepared in conformity with generally accepted
accounting principles" and "reflected all adjustments necessary
for a fair presentation of results for such periods." In reality,
each of Mutual Risk's financial statements violated GAAP by
understating reserves for potential claims. The financial results
included in Mutual Risk's SEC filings during the Class Period
were thereby rendered materially false and misleading.

Then, on April 2, 2002, the Company admitted that even its
disastrous Q4 2001 results (announced February 19, 2002) were not
accurate, putting the Company's shares into another "free fall,"
trading at just pennies per share following the April 2, 2002
admission.

Plaintiff seeks to recover damages on behalf of all purchasers of
Mutual Risk publicly traded securities during the Class Period
(the "Class"). The plaintiff is represented by Milberg Weiss
Bershad Hynes & Lerach LLP, who has expertise in prosecuting
investor class actions and extensive experience in actions
involving financial fraud.

For further information, contact plaintiff's counsel, William
Lerach or Darren Robbins of Milberg Weiss at 800/449-4900 or via
e-mail at wsl@milberg.com. Members of this class can view a copy
of the complaint as filed or join this class action online at
http://www.milberg.com/cases/mutualrisk/


CONTACT:   MILBERG WEISS BERSHAD HYNES & LERACH LLP
           William Lerach, 800/449-4900
           wsl@milberg.com


TYCO INTERNATIONAL: Conference Call Discusses Priorities
---------------------------------------------------------
The new leadership of Tyco International Ltd., provided Friday an
update on the Company's near-term priorities.

John Fort, Lead Director, who is in charge of the Company's
business operations, said: "Tyco continues to be a fundamentally
strong company, with solid finances, hard assets, and competitive
businesses that are well positioned for future growth. We have
real businesses, real earnings and real cash flow.

The Company reiterates it is focused on a clear set of
priorities, specifically:

-- Tyco remains fully committed to completing an initial public
offering for CIT, which will allow for significant debt
reduction, as expeditiously as possible.

-- We have begun a broad-based search for a new chief executive
officer, with the vision, operating experience and character to
lead this great Company.

-- We have launched a comprehensive internal investigation, under
the direction of independent outside counsel, to review past use
of Company funds by Tyco's former chief executive officer.

-- We are focusing on the organic growth of our existing
businesses, which have strong competitive positions in attractive
markets.

-- We are actively reviewing the Company's corporate cost
structure. We will operate this company with financial discipline
and prudence at all levels. At the operating level, Tyco is a
lean, efficient company.

-- We are communicating actively with our employees. One of my
first priorities is to ensure that the 255,000 Tyco employees
remain committed to serving our customers, and that they are
proud of where they work. I know this company, I know its people,
and I have every confidence that they will respond to our
challenges and redouble their efforts to meet our customers'
needs."

Tyco will have a conference call with the financial community
next week to discuss these priorities in greater detail, which
will be hosted by Mr. Fort and Executive Vice President and Chief
Financial Officer Mark Swartz.

ABOUT TYCO INTERNATIONAL LTD.

Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services; and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in disposable medical products, financing
and leasing capital, plastics and adhesives. Tyco operates in
more than 100 countries and had fiscal 2001 revenues in excess of
$36 billion.

CONTACT:  TYCO INTERNATIONAL
          Home Page: http://www.tyco.com
          R. Jackson Blackstock, Investor Relations,
          Phone: +1-212-424-1344,
            or
          J. Brad McGee or Peter Ferris, Media Relations,
          Phone:  +1-212-424-1300


TYCO INTERNATIONAL: Ongoing Investigations Prompt S&P Cut
---------------------------------------------------------
Standard & Poor's lowered Friday its long-term ratings on Tyco
International Ltd. and its industrial subsidiaries (see list
below). The short-term ratings are unchanged. All the ratings
remain on CreditWatch, where they were placed on February 4,
2002, with developing implications. The CreditWatch implications
are now changed to negative. Hamilton, Bermuda-based Tyco is a
diversified company with total debt of about $27 billion.

S&P stated that ratings were lowered due to the following: --
Continued erosion in management credibility and investor
confidence following the indictment of former CEO Dennis
Kozlowski on tax evasion charges and the related ongoing
investigation by the Manhattan District Attorney; -- Heightened
refinancing risk. Standard & Poor's is concerned about the
company's ability to access capital markets or bank financing,
given increased management and board of director turmoil; and --
Continuing delays in effecting a separation of finance
subsidiary, CIT Group Inc. The CIT Group's ratings have been
lowered to BBB+/Watch Dev/A-2. (See the related press release on
CIT Group.)

Ratings could be lowered further in the coming days or weeks if:
-- There are further negative developments in connection with the
ongoing criminal investigation; -- The CIT IPO is not launched
within the next two weeks or does not close within a month after
the launch, or if proceeds are insufficient to significantly
improve Tyco's liquidity; or -- Business or competitive
conditions worsen.

If Tyco does not sell CIT, it would have to seek alternative
financing arrangements to meet financial obligations beginning
early in calendar-year 2003. During the next 18 months, the
company has public and bank debt maturities totaling about $7.7
billion, plus the potential put of two zero-coupon debt issues
totaling about $5.9 billion. (Tyco has the option to satisfy $2.3
billion of the latter amount in stock at the February 2003 put
date. However, given the share price collapse, this would be
highly problematic.)

As of March 31, 2002, the company had about $4 billion in cash.
This would be sufficient to refinance obligations that would
become due or financing arrangements that would terminate if
Standard & Poor's or Moody's lowered the company's ratings below
investment-grade. (Moody's senior unsecured debt rating of Baa3
is under review for possible downgrade.) These obligations
include accounts receivable securitization programs ($506 million
outstanding as of March 31, 2002), �30 billion ($225 million) of
notes due 2030, and various interest rate swaps.


TYCO INTERNATIONAL: S&P Drops CIT Group Ratings
-----------------------------------------------
Standard & Poor's on Friday said that it lowered its long-term
counterparty credit ratings on CIT Group Inc. and its
subsidiaries to triple-'B'-plus from single-'A'-minus. The short-
term 'A-2' counterparty credit ratings remain unchanged. All the
ratings remain on CreditWatch with developing implications, where
they were placed on February 4, 2002.

"The ratings downgrade solely reflects the lowering of the long-
term counterparty credit ratings of parent Tyco International
Ltd., which were placed on CreditWatch with positive implications
on Feb. 4, 2002," said credit analyst Lisa J. Archinow, CFA.

The ratings of the parent were lowered because of continued
erosion in management credibility and investor confidence
following the indictment of former CEO Dennis Kozlowski on tax-
evasion charges; heightened refinancing risk; and continuing
delays in effecting a separation of CIT. Following a complete
separation from Tyco. through the execution of an IPO, in
addition to maintenance of financial strength, profitability, and
asset quality at current levels, the ratings of CIT are likely to
be raised. However, CIT is still waiting for final comments from
the SEC before it can begin the IPO process. If CIT is sold to a
third party with a higher credit rating, ratings are likely to go
higher. Ratings could be further lowered if CIT's parent's
ratings are lowered or if CIT is sold to a third party with a
lower credit rating.

Analyst: Lisa J Archinow, CFA, New York (1) 212-438-7364; E.
Richard Schmidt, New York (1) 212-438-7403


TYCO INTERNATIONAL: Turmoil Continues; Moody's Cuts Ratings
-----------------------------------------------------------
Moody's Investors Service downgraded both the long- and short-
term debt ratings of Tyco International Ltd. to Baa3 and Prime-3
from Baa2 and Prime-2, respectively. Tyco's ratings remain under
review for possible further downgrade.

The rating actions for Tyco anticipate the completion of the
planned sale of its CIT Group subsidiary, but consider the
potential for proceeds from that sale to fall short of prior
expectations.

As a result, debt reduction will not be in line with prior
expectations and the Company will likely require a greater
provision against its carrying value of CIT.

Moreover, the rating actions reflect Moody's growing concern
about the potential implications for Tyco of recent developments,
including required management changes and emerging corporate
governance issues, as well as the possibility of additional
adverse developments as an internal review of the past use of
company funds by the former CEO progresses.

Moody's also said if CIT's separation is delayed beyond this time
frame, it is likely that CIT's long and short-term ratings would
be adjusted downward. This would reflect increased concern about
Tyco's commitment to the separation, and Moody's belief that this
could have lasting negative effects on CIT's franchise.

Absent significant near-term debt reduction with proceeds from a
successful sale of CIT, Tyco's ratings would likely fall into
speculative grade.

Moody's noted that the Company has certain rating triggers that,
in the event of a downgrade below investment grade, could require
it to repurchase its JPY30 billion, 3.5% notes due 2030 at the
Tyco International Group SA level.

In addition, rating triggers associated with receivables
previously sold under third-party sale of accounts receivable
programs at the Tyco International Ltd level could be impacted by
this rating action. Amounts outstanding under these receivables
programs totaled US$530 million as of March 31, 2002.


TYCO INTERNATIONAL: Bond-Downgrades Drag Down Share Value
---------------------------------------------------------
Shares of Tyco International Ltd. plummeted 30 percent Friday, or
US$4.50, to close at $10.10 on sales of nearly 200 million
shares, making them the most active issue on the New York Stock
Exchange.

Knight-Ridder Business News suggests that the stock's steep dive
follows a downgrade on its bonds by two credit-rating agencies,
and the announcement by company officials that the crucial sale
of its CIT Group finance unit would be delayed.

In an effort to allay investor fears, Tyco's interim CEO, John
Fort, held a conference call by midday to explain the downgrades
by Moody's Investor Service and Standard & Poor's. But Fort's
strongest message seemed to be when he told investors and
analysts that former CEO L. Dennis Kozlowski was no longer
associated with the Bermuda-based conglomerate.

"I would just really want to emphasize that Dennis is gone," said
Fort. "Dennis is gone. Now, just look at this company. Just take
a look at it. I think it's very difficult to forecast that we're
not going to be successful going forward." Still, that message
was undercut by the two downgrades, which left Tyco's long-term
debt rating just one grade above junk level.

The downgrades triggered loan covenants requiring Tyco to repay
about US$530 million in debt. An additional US$125 million in
debt may become due as a result, said chief financial officer
Mark Swartz. Swartz said Tyco could easily repay the additional
money.

"We are looking at US$1.5 billion of debt repayment [this
quarter] and still have US$2.9 billion on hand," he said, adding
the Company still planned to repay US$10 billion of its US$27
million in debt within a year.

However, the recovery plan hinges on liquidating CIT, and that
has been delayed. Swartz said the Securities and Exchange
Commission hasn't yet approved a sale of shares in CIT because of
concerns about the amount of goodwill Tyco recorded when it
purchased CIT for US$9.5 billion last year.



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

AES SUL: Pays Debt Counter Rumors Of Imminent Collapse
------------------------------------------------------
Though already teetering on the edge of bankruptcy, AES Sul
Distribuidora Gaucha de Energia S.A., a subsidiary of
U.S. company AES Corp., made a loan payment of BRL77 million on
time in order to send a message to the market that it is
financially sound.

The payment was the first of four related to a debenture issue of
BRL250 million originally made in December 2000.

Moody's Investors Service recently put AES Sul's Ba2 local
currency rating and the national scale rating of A1.br on review
for possible downgrade.

The action reflected the potential impact of a May 16, 2002 order
of the Brazilian National Electric Power Agency (ANEEL)
questioning the settlement of rationing related costs.
The financial impact of any ANEEL ruling could be significant and
harm the repayment prospects of the outstanding debt, Moody's
said.

AES has already filed a request for injunction in Brazilian
federal court against the order. The filing states that the
latest ANEEL order purporting to retroactively change the
calculation methods of the Wholesale Energy Market violates
Brazilian law and practice on both procedural and substantive
grounds.

The net amount, after income taxes, related to sales by AES Sul
that is affected by ANEEL's retroactive order is approximately
US$120 million.

Contact:  AES Corporation
          Home Page: www.aes.com
            or
          Kenneth R. Woodcock
          Phone: 703/522-1315
            or
          Investor relations
          E-mail: investing@aes.com


ELETROPAULO METROPOLITANA: S&P Questions Debt Coverage Ability
--------------------------------------------------------------
Credit rating agency Standard & Poor's (S&P) is now putting
Eletropaulo's ability to cover its finances in question, Business
News Americas suggests.

The international ratings agency said that the Brazilian
utility's capacity to raise debt has been hampered by the
country's volatile macroeconomic environment and an overall less
liquid market for energy-related risk.

Eletropaulo is currently repaying or refinancing significant
maturities coming due in 2002. The Company is expecting some
BRL720 million in cash in the second-quarter, but S&P believes
that even together with a BRL960-million advance from state
development bank BNDES to cover rationing losses, this will be
insufficient to meet payment of principal and interest.

Eletropaulo will however have to seek external financing, and
given the distributor's strong franchise S&P expects that it will
have enough access to the debt market to provide for the needs of
the operating company.

Furthermore, 2003 brings additional refinancing risk as debt held
at AES Elpa and Transgas (contracted by Eletropaulo's US owner
AES with BNDES) matures.

Maintaining Eletropaulo's current rating (global issuer credit
rating 'BB-' with a negative outlook) depends on its capacity to
make firm financing arrangements for its 2002 debt with adequate
lead-time.

S&P will assess the company's progress over the next 60 days.

CONTACT: ELETROPAULO METROPOLITANA
         Avenida Alfredo Egidio de Souza Aranha 100-B,
         13 andar 04726-270 San Paulo
         Brazil
         Phone: +55-11-548-9461, +55 11 5696 3595
         Fax: +55-11-546-1933
         URL: http://www.eletropaulo.com.br
         Contacts:
         Luiz D. Travesso, Chairman and President
         Orestes GonOalves Jr., VP Finance/Investor Relations



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

CORPORACION DURANGO: Rolling Over Debt With New 7-Yr Notes
----------------------------------------------------------
Corporacion Durango SA, Mexico's largest paper producer, said it
plans to sell US$175 million of bonds in global markets.
According to a report by Dow Jones Newswires, the notes carry a
seven-year maturity.

The paper producer revealed in a press release that the proceeds
of the offering will be used to tender any and all of the US$122
million in aggregate principal on the Company's outstanding 12
5/8% notes due 2003, and to pay down other short- and long-term
obligations.

Durango was scheduled to announce a cash tender offer to buy back
the US$122 million in outstanding bonds on Monday.

Moody's Investors Service recently downgraded Corporacion
Durango's senior notes to B3, or six steps below investment
grade, from B2, and changed the outlook to negative from stable.

The downgrades, according to Moody's, reflected their effective
subordination to approximately US$166 million of secured debt and
their structural subordination to about US$20.4 million of
subsidiary debt.

The change in the rating outlook to negative from stable also
reflected the current difficult conditions in the paper industry,
Corporacion Durango's weak operating performance and debt
protection measures, which are lower than what Moody's has
previously expected, and its constrained liquidity position
resulting from uncommitted short-term bank lines.

On March 31, 2002, Durango had approximately US$38 million in
cash and equivalents and about US$100 million in uncommitted bank
lines.

Corporacion Durango is a company based in Mexico and the
controller company of Grupo Industrial Durango (the largest
integrated containerboard and packaging company in Latin
America), Grupo Pipsa-Mex (the largest newsprint producer in
Latin America), and Durango Paper Company (one of America's
largest privately-owned paperboard companies).

CONTACTS:  CORPORACION DURANGO, S.A. DE C.V.
           Mayela R. Velasco
           +52 (1) 829 1008
           mrinconv@corpdgo.com.mx

           Arturo Diaz Medina
           +52 (1) 829 1015
           adiaz@corpdgo.com.mx

           THOMSON FINANCIAL CORPORATE GROUP
           Alex Cancio
           (212) 701 1973
           alex.cancio@tfn.com

           Richard Huber
           (212) 701-1830
           richard.huber@tfn.com


ENRON: Finalizes Sale-and-Purchase Agreement With Tractebel
-----------------------------------------------------------
Tractebel and Enron are putting the finishing touches on details
of the sale-and-purchase agreement of the electricity co-
generation plant located in Garza Garcia, Nuevo Leon, reports
Mexico City daily El Universal.

Tractebel, the Belgium-based utility unit of Suez SA that owns
the rest of the project, was the only firm to bid on Enron's
share of the 245-megawatt power plant.

According to Jacques Van Hee, Tractebel External Relation's
manager, and Keith Miceli, spokesperson for Enron Latin America,
negotiations are very close to the end of the tunnel, lacking
only the finishing touches.

Both parties are looking to conclude the contract, the amount of
which is still undisclosed, this year.

The Energy Regulation Commission (CRE) decided to give more time
to Enron so that the Company can obtain financing for projects of
natural gas transportation.

In an original deal reached in November 2001, Enron and Tractebel
agreed to commit US$52.7 million in equity to the project and
arranged financing of US$136.5 million through the Inter-American
Development Bank.

When Enron declared bankruptcy, the IDB stopped financing the
project, but said it would resume financing when Tractebel agreed
to "assure future performance."

CONTACTS:  ENRON CORP., +1-713-853-4738
           Mark Palmer, Investor Relations Dept.
           P.O. Box 1188, Suite 4926B
           Houston, TX 77251-1188
           (713) 853-3956
           Email: investor-relations@enron.com

           Enron Corp.
           Public Relations Dept.
           P.O. Box 1188, Suite 4712
           Houston, TX 77251-1188
           (713) 853-5670


GRUPO BITAL: Counting On ING Funding This Month
-----------------------------------------------
Grupo Financiero Bital is hoping that the US$200 million that ING
was supposed to invest into the Mexican bank in May will come in
this month, said Eduardo Berrondo, general director of Bital.
ING was supposed to inject the amount to gain control of 17.5
percent of the bank, but the transaction has never taken place.

He added that before the end of the year, Bital would issue
US$100 million to US$150 million in capitalization notes. This
issue will allow the bank to finish the capitalization process
agreed upon with the Institute for Bank Savings Protection
(IPAB).

Meanwhile, the Mexican banking regulators are pushing for a
timely decision from Santander Central Hispano (SCH) regarding
its intentions with Bital.

According to Patricio Bustamante, supervising vice-president at
the Banking and Securities National Commission (CNVB), the CNVB
has an interest in knowing what SCH's plans are because Bital
entered into an agreement in December to take over Banco
Atlantico.

"We do not mind whether it is ING or Santander (that takes
majority control), which is basically a decision between
individuals," he said, adding that what matters from the CNVB's
standpoint is that Bital's finances be sound and its shareholder
structure solid.

Fortifying Bital's financial condition is expected to be
accomplished by its upcoming recapitalization involving either
SCH or ING Group NV, Bustamante said.

CONTACT:  GRUPO FINANCIERO BITAL
          Paseo De La Reforma
          No. 243, Cuauhtemoc,
          06500, Mexico ,D.F.
          Phone: 57.21.52.86
          Fax:  57.21.57.83
          Home Page: www.bital.com.mx
          Contact:
          Investor Relations
          Act. Ricardo Garza Galindo Salazar
          Phone: 57.21.26.40
          Fax:57.21.26.26
          E-mail: ricaggs@bital.com.mx

          SANTANDER CENTRAL HISPANO S.A. (BSCH)
          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. 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


GRUPO MEXICO: Talks Fail To Pacify Striking Workers
---------------------------------------------------
Striking workers at two of Grupo Mexico's plants remain
deadlocked. Labor, the Company and labor officials continued to
pursue a resoltion Friday, reports Dow Jones Newswires.

Copper miners at Cananea, in northwestern Sonora state, and coal
miners at Nueva Rosita, in Coahuila, who went on strike Monday,
maintained their demands for a 16% wage increase. These include a
10.5% wage increase corresponding to 2001, and 5.5% for this
year, said Napoleon Gomez Urrutia, secretary general of the
National Mining, Metallurgical and Similar Workers Union.

However, Grupo Mexico is offering the same 5.75% increase in
wages and benefits that it paid to workers at La Caridad, also in
Sonora state, and at other facilities where workers also lodged a
strike earlier this year.

Grupo Mexico earlier revealed plans to shut down Cananea and
Nueva Rosita if the strike continues.

BBVA Securities thinks the mine closures are a good idea.

"We believe a closure of the Cananea and Nueva Rosita mines would
be the right decision for Grupo Mexico in the event the workers
do not relent in their wage demands," BBVA said.

While a shutdown would force up exploitation costs, once copper
demand picks up again, "these units could easily be returned to
service," BBVA added.

Grupo Mexico is currently renegotiating its debt, and said that
negotiations have progressed in recent days. The Company said it
is seeking to reschedule debt over seven years with two years
grace, and has offered to capitalize Grupo Minero Mexico, its
Mexican unit, with US$105 million in fresh capital.

Grupo Mexico, the world's third largest copper producer with
operations in Mexico, Peru and the United States, is currently
renegotiating more than US$1 billion in debt at Grupo Minero
Mexico and U.S.-based Asarco.

CONTACTS:  GRUPO MEXICO S.A. DE C.V
           Avenida Baja California 200,
           Colonia Roma Sur
           06760 Mexico, D.F.
           Mexico
           Phone: +52-55-5264-7775
           Fax: +52-55-5264-7769
           http://www.gmexico.com
           Contacts:
           German Larrea Mota-Velasco, Chairman & CEO
           Xavier Garcia de Quevedo Topete, President & COO

           ASARCO, INC.
           2575 E. Camelback Rd., Ste. 500
           Phoenix, AZ 85016
           Phone: 602-977-6500
           Fax: 602-977-6701
           Home Page: http://www.asarco.com
           Contacts:
           German Larea Mota-Velasco, Chairman & CEO
           Genaro Larrea Mota-Velasco, President
           Daniel Tellechea Salido, VP & CFO


GRUPO TFM: Completes Existing Securities Consent; Prices Bonds
--------------------------------------------------------------
In an official company news report, 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
Friday the pricing by TFM. S.A. de C.V. of an offering of $180.0
million of senior notes due 2012 (the "notes") which will be used
to finance a portion of the purchase price of TFM's acquisition
of the Mexican government's 24.6 percent equity interest in its
parent company, Grupo TFM. The size of the offering was increased
from $170.0 million. The notes are not callable for five years
and will mature in 2012. Interest on the notes is at the rate of
12.5 percent and are payable semi-annually, and the notes were
priced at 98.6 percent of par.

Prior to commencement of the bond offering, TFM successfully
completed a consent solicitation after receiving consents from
holders of over 90 percent of the outstanding principal amount of
each of its existing 10.25 percent Senior Notes due 2007 and
11.75 percent Senior Discount Debentures due 2009 (together, the
"existing securities") in connection with specified amendments to
each of the indentures pursuant to which the existing securities
were issued to allow TFM to consummate the acquisition of the
Mexican government's equity interest.

The notes have not been registered under the Securities Act of
1933, as amended, or applicable state securities laws, and,
unless so registered, may not be offered or sold in the United
States, except pursuant to an applicable exemption from the
registration requirements of the Securities Act of 1933, as
amended, and applicable state securities laws. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy the notes.

Headquartered in Mexico City, Grupo TMM is the premier Mexican
multimodal transportation company and logistics provider. Through
its branch offices and network of subsidiary companies, Grupo TMM
provides a dynamic combination of ocean and land transportation
services within Mexico. Grupo TMM also has the controlling
interest in TFM, which operates Mexico's Northeast Rail Lines and
carries over 40 percent of the country's rail cargo.

CONTACT:  Grupo TFM
          Jacinto Marina, 011-525-55-629-8790
          jacinto.marina@tmm.com.mx
              or
          Leon Ortiz, 011-525-55-447-5800
          lortiz@gtfm.com
              or
          Dresner Corporate Services
          (general investors, analysts and media)
          Kristine  Walczak, 312/726-3600
          kwalczak@dresnerco.com



SAVIA: Shares Up As Unit Nears Debt-Restructuring
-------------------------------------------------
Mexico's Savia SA, one of the world's largest vegetable seed
companies, saw its shares rise 58 centavos, or 8.5 percent, to
MXN7.38, the first gain in seven days, reports Bloomberg.

The increase in the stock price comes amid expectations that its
parent, Pulsar Internacional SA, might be close to an agreement
to restructure its debt with creditors, an analyst said.

Pulsar needs to restructure at least US$600 million in debt,
which was guaranteed in part with Savia shares.

"My bet would be that its rising on a possible debt
restructuring" of Pulsar, said Marco Reyes, an analyst at
Scotiabank Inverlat SA. "People are buying the stock because its
cheap. If you grabbed the stock at MXN2 per share it's the
business of a lifetime."

Savia, which is owned by billionaire Alfonso Romo, announced
plans to sell off most of its assets after defaulting on part of
its US$1.3 billion debt in April 2001. The Company sold its stake
in Seguros Comercial America for US$791 million to reduce debt.

Savia restructured debt last year after it sold its insurance and
packaging units and used the money to reduce debt at the Savia
holding company to US$75 million from $920 million.

Savia's U.S. seed unit, Seminis Inc., has more than US$300
million in debt.

CONTACT:  SAVIA SA DE C.V.
          Avenida Batall�n de San Patricio
          No. 111, 4� piso, Colonia Valle Oriente
          66269 San Pedro Garza Garc�a,
          Nuevo Le�n, Mexico
          Phone: +52-81-8399-0830
          Fax: +52-81-8399-0858
          Home Page: http://www.savia.com.mx
          Contact:
          Francisco Garza, Director of Investor Relations
          Tel: (52 81) 8173 5500
          Fax: (52 81) 8173 5509
          E-mail: fjgarza@savia.com.mx

          SEMINIS INC.
          Worldwide Headquarters:
          2700 Camino del Sol
          Oxnard, California 93030-7967 USA
          Phone: (805)647-1572
          Home Page: http://www.seminis.com/
          Contact:
          Enrique Osorio
          Phone: (805) 918-2233
          Fax: (805)-918-2553
          E-mail: enrique.osorio@seminis.com

          Investor Relations
          E-mail: investors@seminis.com


          PULSAR INTERNACIONAL S.A. DE C.V.
          Edificio Torre Alta, Avenida Roble 300,
          Colonia Valle del Campestre
          66265 San Pedro Garza Garc�a,
          Nuevo Le�n, Mexico
          Phone: +52-81-8399-5600
          Fax: +52-81-8356-7992
          Home Page: http://www.pulsar.com.mx
          Contact:  Alfonso Romo Garza, Chairman and President
          Ra�l Farias, Finance Director



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

FERTINITRO FINANCE: Fitch Lowers Ratings Over Debt Service Doubt
----------------------------------------------------------------
Fitch Ratings has lowered the debt rating of FertiNitro Finance
Inc.'s US$250 million 8.29% secured bonds due 2020 to 'B+' from
'BBB-'. The rating remains on the Rating Watch Negative.

The rating downgrade reflects FertiNitro's diminished liquidity
and tight debt service capacity, a higher level of senior debt
due to final cost overruns, lower than expected production levels
since completion, and the prospects for continuing weak
international ammonia and urea prices, particularly compared to
original projections.

In April 2002, FertiNitro adequately made its scheduled debt
service payment from its available liquidity accumulated from
export sales through April and available funds from its six-month
debt service reserve account (DSRA). The next debt service
payment in October totals US$43 million.

While FertiNitro also expects to meet its next debt service
payment on a timely basis, its liquidity position will remain
extremely thin as the DSRA is unlikely to be fully replenished by
the next payment. However, the project currently has alternative
liquidity sources totaling US$80 million. This includes a US$20
million sponsor equity facility that could be canceled at the
discretion of FertiNitro's Board prior to its October 2003
expiration; and a US$60 million line of credit debt service
reserve facility (LOC/DSRF) that expires April 2003. If the
LOC/DSRF is not extended, any amounts drawn will come due and
payable in April 2003.

In addition to a reduced debt service capacity, FertiNitro has a
higher level of senior debt than originally projected. The
project incurred total cost overruns of approximately US$96
million, which was funded equally by the shareholder equity and
additional senior debt from the project's cost overrun facility.
As a result, total senior project debt increased to US$748
million from the original US$700 million.

Following the successful completion of the 'First Reliability
Test' in February 2002, the independent engineer certified
FertiNitro's final completion in April 2002, releasing the
sponsors' completion support. The test verified the plant's
ability to perform at minimum required capacity over a 30-day
test period.

While FertiNitro has demonstrated its ability to perform at its
nameplate capacity over a short-term period, the project has
since not been able to operate at a steady-state production level
close to original base case projections primarily due to repairs
of the waste heat boilers. From February through April 2002,
ammonia and urea production averaged roughly 75% and 60%,
respectively, of base case projections. Plant operations have
been inconsistent largely due to fabrication defects detected
during the ramp up phase. FertiNitro's management believes the
operational problems have been adequately resolved, and expects
that the plant should be able to run at production rates
consistent with base case projections. In May, performance
improved significantly with actual ammonia and urea production
running at 95% and 88%, respectively compared to base case. There
is a 180-day 'Second Reliability Test' that FertiNitro needs to
successfully complete by October 2003; otherwise, an amount of up
to US$50 million of additional sponsor equity is available
towards a debt buydown for the project. This second test will
assess the plant's ability to produce at the original base case
production levels that are slightly above nameplate capacity.

Under a 20-year gas supply contract, PDVSA Gas agreed to deliver
all feedstock gas requirements to FertiNitro at a competitive gas
price. Due to OPEC production restrictions, PDVSA Gas has reduced
its supply of associated gas deliveries to FertiNitro since mid-
May. Fitch believes that continued gas reductions to the project
will directly hinder FertiNitro's production capacity.

FertiNitro's actual spot prices for ammonia and urea averaged
approximately US$80 per metric ton (mt) and US$92 per mt, net of
marketing fees, respectively, during the first four months of
2002. Comparing these actual average fertilizer prices to that of
the original base case projections of US$124 per mt and US$161
per mt, respectively, for ammonia and urea, FertiNitro's actual
realized prices are considerably lower than the original base
case price assumptions by more than 55%. For 2002, FertiNitro has
forecasted average prices of US$92 per mt and US$93 per mt,
respectively, for ammonia and urea. Fitch considers year-to-date
fertilizer prices to be cyclical lows and further considers the
project's 2002 price forecast to be reasonably conservative.

The combination of a higher senior debt load, lower-than-expected
production levels, and weak-than-projected fertilizer prices have
all contributed to FertiNitro's tight liquidity position and
limited debt service capacity. The negative rating watch
addresses the project's liquidity position over the near term.
Factors that could attribute to further credit deterioration on
the current 'B+' level include:

--weak commodity prices of ammonia and urea remaining at
sustained low levels into next year;
--ongoing production levels of less than the plant's nameplate
capacity; and,
--further deterioration in the project's cash flow leading to
greater dependency on its available liquidity supports that
expire in 2003.

Furthermore, Fitch believes that the following combination of
factors could warrant a revision to the current Rating Watch
Negative status:
--a substantial and prolonged rebound in fertilizer prices;
--normalized production levels that reflect closer to the
original production assumptions; and,
--indication that PDVSA will not reduce its gas supply deliveries
to the project.

All of these price and production factors could enhance the
project's liquidity position and improve FertiNitro's ability to
sufficiently cover its debt payments and replenish its reserves.
While sovereign-related concerns still apply to FertiNitro's
current rating level, the project is currently constrained at its
own economics.

Fertilizantes Nitrogenados de Venezuela, FertiNitro, C.E.C. (the
Project) is a US$1.1 billion fertilizer plant with projected
annual production of 1.3 million mt of ammonia and 1.5 million mt
of urea. Debt repayment to lenders and bondholders relies on
FertiNitro's ability to generate revenues from producing ammonia
and urea products for export into the international markets.
While the project has long-term offtake contracts with an
affiliate of Koch Nitrogen Company and ISPL/Pequiven for the
plant's production volumes, bondholders are fully exposed to the
volatility of international fertilizer prices.

FertiNitro is owned 35% by a Koch Industries, Inc. subsidiary,
35% by Petroquimica de Venezuela, S.A. (Pequiven), a wholly-owned
subsidiary of Petroleos de Venezuela S.A. (PDVSA), 20% by a
Snamprogetti S.p.A. subsidiary, and 10% by a Cerveceria Polar,
C.A. (Polar) subsidiary.

CONTACT:  FITCH RATINGS
          Caren Y. Chang, 312/368-3151,
          John W. Kunkle, CFA 312/606-2329,
          Joy Guttschow, 312/368-3140, Chicago or
          Alejandro Bertuol, 212/908-0393, New York
          Media Relations:
          James Jockle, 212/908-0547, New York


SUDAMTEX: Collapses Under New Market, Tariff Conditions
-------------------------------------------------------
The opening of the Venezuelan domestic market and the lowering of
import tariffs claimed another victim. Sudamtex de Venezuela
SACA, formerly the country's largest publicly traded textile
company, shuttered its doors after 56 years of operations, and
laid off its last 400 employees at Aragua state.

Last May, the Company tried to stretch out payments on up to
US$45 million in bank debt following a restructuring agreement in
April with banks for the extension of maturities on the debt for
five years.

Sudamtex, which lost US$38 million for the fiscal year ended June
30, 2001, began negotiations in 2000 with eight banks, including
the Andean Development Corp., a regional lending agency, to
restructure its debt. Two unnamed foreign banks and five
Venezuelan banks also held the Company's debt.

The Company's shares, which have been suspended by the stock
exchange, have lost 97 percent of their value since 1997. The
Class A shares last traded at 90 centavos, down from a high of
VEB31.82 in August 1997.

CONTACT:  SUDAMTEX DE VENEZUELA, C.A., S.A.C.A.
          Edificio Karam, Piso 2,
          Ibarras a Pelotas,
          Avenida Urdaneta, Apartado 3025
          Caracas, Venezuela
          Phone: +58-2-562-9222
          Fax: +58-2-562-9411
          Home Page: http://www.sudamtex.com/home.htm
          Contact:
          Alexander J. Furth,  President
          Carlos F. Van Maanen, VP, Finance and Administration,
                                    Fiberglass

          ANDEAN DEVELOPMENT CORPORATION
          1224 Washington Avenue
          Miami Beach, Florida 33139
          Phone:   (305) 866-3360
          Contact:
          Pedro P. Errazuriz, Chairman and CEO
          Jose Luis Yrarrazaval, Vice Chairman/CFO/Secretary




               ***********


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
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