/raid1/www/Hosts/bankrupt/TCRLA_Public/020620.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

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

           Thursday, June 20, 2002, Vol. 3, Issue 121

                           Headlines

* A R G E N T I N A *

AEROLINEAS ARGENTINAS: Begins Servicing International Routes
ARGENTINE BANKS: Commences Voluntary Bond-for-Deposit Program
IMPSAT FIBER: Asks Authority to Tap Arnold & Porter as Counsel
REPSOL YPF: 6,000 Workers to Get Reimbursement for Stock Plunge

* B E R M U D A *

GLOBAL CROSSING: GAO Rejects Protest Regarding DREN Contract
TYCO INTERNATIONAL: Ex-Dir. Comments on Litigation Filed by BoD
TYCO INTERNATIONAL: Success of CIT IPO Tied to Argentina

* B R A Z I L *

AES CORP.: New CEO Commits to Increasing Shareholder Value
CODESP: To Let Go of Port Santos
INDUSTRIAS KLABIN: Plans to Roll Over Short Term Debt

* C O L O M B I A *

TELECOM: Sees End to Strike After Reaching Wage Deal With Workers

* M E X I C O *

BANRURAL: Govt. Rules Out Rescue for Technically Dead Institution
CLUB MED: To Break Even in 2002
CORPORACION DURANGO: Moody's Assigns, Confirms Ratings
NII HOLDINGS: Court Approves $3.8M Retention Plan

* P E R U *

GREMCO: Collapses Under Economic, Political Crisis
NUEVO MUNDO: Braces for A Protracted Liquidation Process

* T R I N I D A D   &   T O B A G O *

BWIA: Privatization Contributes Largely to Survival

* U R U G U A Y *

GALICIA URUGUAY: Parent Proposes Liquidation


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

AEROLINEAS ARGENTINAS: Begins Servicing International Routes
------------------------------------------------------------
Spanish-owned carrier Aerolineas Argentinas (AA) launched Monday
its first international flight since the embattled airline was
privatized and resumed operations last year.

According to an EFE report, AA took off Monday en route to Paris
from Madrid as part of the new owners' goal to service new
international routes. The Company will make scheduled flights
from Madrid to Paris on Mondays, Wednesdays and Fridays and to
London on Tuesdays, Thursday and Fridays, using its new MD-88
mid-range aircraft.

AA's new owners include a consortium including two airlines,
Spanair and Air Plus along with the Marsans travel and leisure
group, has had on its top list

They acquired the former Argentine flag carrier for a bargain
basement price of US$615 million from the Spanish government,
which had been its proprietor since the then-state-owned airline
Iberia acquired AA in a 1991 buyout.

Claiming AA was running up operating losses of $300 million per
year and had a backlog of over US$900 million in accumulated
liabilities, the Madrid-appointed board filed for bankruptcy
protection and was about to close down when a buyer came forward.

CONTACT:  AEROLINEAS ARGENTINAS
          Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA
          Phone: (54-11) 4310-3000
          Fax: (54-11) 4310-3585
          E-mail: volar@aerolineas.com.ar
          Home Page: www.aerolineas.com.ar
          Contact:
          Patricio Zabalia Lagos, President

          AIR COMET
          Baha de Pollensa, 21-23
          Edificio Airplus
          28042 Madrid
          Phone: 913 993 674
          Fax:  913 291 146
          E-mail: airplusops@jet.es
          Contact:
          Antonio Mata, presidente de Air Comet


ARGENTINE BANKS: Commences Voluntary Bond-for-Deposit Program
-------------------------------------------------------------
Argentine banks commenced a voluntary bond-for-deposit swap
program this week.

AFX, citing newspapers Clarin and La Nacion, reports that some
banks are considering offering a cash incentive to clients who
accept to swap their rescheduled term deposits for government
bonds.

Accordingly, one bank is considering offering clients who opt for
three-year dollar-denominated bond ARS250 in cash for every
ARS1,000 they swap.

Clarin reveals that a "foreign bank that was recently bailed out
by its parent" is studying the possibility of giving account
holders who accept to swap the equivalent of US$10,000, 80$ of
this sum in bonds and 20$ in cash. The cash portion would be
converted into pesos at a rate of 1.40 per dollar.

La Nacion says that banks are considering offering a "reward"
equivalent to 20% of the swapped amount.

The voluntary bond-for-deposit swap program will end July 16.

Economy Ministry Roberty Lavagna recently said at a meeting with
deputies of the Justicialist (Peronist) party that the Central
Bank will not bail out commercial banks anymore. According to the
minister, banks are to use their own funds even if some of them
could go bankrupt.

So far, the central bank has put in ARS19 billion in rediscount
facilities to commercial bank. The move fueled inflation as it
accounts for a large increase in money supply. The fund was
mainly used to refund account holders whose access to account
were granted by the court.


IMPSAT FIBER: Asks Authority to Tap Arnold & Porter as Counsel
--------------------------------------------------------------
Impsat Fiber Networks, Inc. has determined that it will be
necessary to engage counsel with knowledge and experience in the
areas of bankruptcy, litigation, tax, mergers and acquisitions
and corporate finance. The Debtor proposes to the U.S. Bankruptcy
Court for the Southern District of New York to retain and employ
the law firm of Arnold & Porter as counsel in this case.

For approximately 9 years, Arnold & Porter has represented the
Debtor in a number of significant corporate transactions,
including the Debtor's initial public offering and the issuance
of its public debt, as well as the preparation of all of the
documents necessary to commence this case to effectuate the
Debtor's reorganization. This retention has afforded Arnold &
Porter a familiarization on the Debtor's business and financial
affairs. The Debtor submits that Arnold & Porter is both well
qualified and uniquely able to represent it as debtor in
possession in this chapter 11 case in an efficient and timely
manner.

The professional services that Arnold & Porter will render to the
Debtor include:

     A. providing advice to the Debtor with respect to its
        powers and duties as debtor in possession in the
        continued operation of its businesses and the management
        of its properties;

     B. taking necessary or appropriate action to protect and
        preserve the Debtor's estate, including prosecuting
        actions on the Debtor's behalf, defending any actions
        commenced against the Debtor, conducting negotiations
        concerning litigation in which the Debtor is involved,
        and filing and prosecuting objections to claims filed
        against the Debtor's estate, except where such
        litigation is handled by other retained counsel;

     C. preparing, on behalf of the Debtor, applications,      
        motions, answers, orders, reports, memoranda of law and
        papers in connection with the administration of the
        Debtor's estate;

     D. representing the Debtor in negotiations with all other
        creditors and equity holders of the Debtor, including
        governmental agencies and municipal authorities;

     E. representing the Debtor in negotiations regarding
        possible dispositions of some or all of its assets;

     F. negotiating and preparing on behalf of the Debtor one or
        more plans of reorganization and all related documents;
        and

     G. performing other necessary or appropriate legal services
        in connection with this chapter 11 case.

The Debtor agrees to compensate Arnold & Porter in their
customary hourly rates on similar proceedings. Arnold & Porter's
current hourly rates are:

          Partners and of Counsels      $355 - $665
          Associates                    $195 - $390
          Paraprofessionals             $40 - $145

Impsat Fiber, a provider of broadband Internet, data, and voice
services in Latin America, filed for chapter 11 protection on
June 11, 2002. Anthony D. Boccanfuso, Esq., and Michael J.
Canning, Esq. at Arnold & Porter represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $667,189,368 in total assets and
$1,334,732,793 in total debts.

CONTACT:  IMPSAT Fiber Networks, Inc.
          Home Page: http://www.impsat.com

          Hector Alonso
          Gonzalo Alende Serra
          Phone: 54.11.5170.3700

DEBTORS' COUNSEL: Anthony D. Boccanfuso, Esq.
                  Michael J. Canning, Esq.
                  Arnold & Porter
                  399 Park Avenue
                  New York, New York 10022
                  (212) 715-1315
                  Fax : (212) 715-1399


REPSOL YPF: 6,000 Workers to Get Reimbursement for Stock Plunge
---------------------------------------------------------------
The 35% plunge in the value of Repsol YPF's shares will force
Europe's fifth-biggest oil company to compensate 6,000 employees,
who bought shares in 1999.

According to a Bloomberg report, the obligation is part of the
conditions of the sale of 9 million shares.

Had the stock risen, employees would have received half the gains
and Repsol would have kept the rest as part of the "Repsol
Garantizado" plan, which was aimed to raise funds for its US$15
billion purchase of Argentine driller YPF.

The deal will cost Repsol about EUR72 million (US$69 million),
but that will decrease to EUR20 million because Repsol hedged the
contracts and made a provision of EUR13 million in 2001.

Repsol has seen its shares drop 23% this year as it suffers from
Argentina's economic turmoil and currency devaluation.

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


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

GLOBAL CROSSING: GAO Rejects Protest Regarding DREN Contract
------------------------------------------------------------
Global Crossing Ltd. was dealt a heavy blow Monday when the U.S.
General Accounting Office (GAO) threw out its protest of the 10-
year US$450-million Defense Research and Engineering Network
(DREN) contract, reports Newsbytes.

As a result, the Defense Information Systems Agency (DISA) can
now proceed with the contract, which it awarded in April to
WorldCom Inc., to build a research network for the Defense
Department and other researchers.

Dan Gordon, associate general counsel for GAO, revealed that GAO
sided with DISA's claim that Global Crossing was a
nonresponsible, contender for the contract. The vendor did not
have the financial soundness to compete for the project, DISA
officials had argued.

"We found the agency's determination reasonable," Gordon said.

In April, Global Crossing filed a protest with the GAO regarding
the ruling after it received notification from DISA that it is
'ineligible for award' due to its current financial situation.

The DREN contract was awarded to Global Crossing in July 2001,
but was re-bid to address procedural issues after unsuccessful
bidders contested the results.

About GLOBAL CROSSING

On January 28, 2002, certain companies in the Global Crossing
Group (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated proceedings
in the Supreme Court of Bermuda.

CONTACT:  GLOBAL CROSSING
          Press Contact:
          Catherine Berthier
          +1 212-412-4666
          Email: Catherine.Berthier@globalcrossing.com

          Becky Yeamans
          +1 973-410-5857
          Email: Rebecca.Yeamans@globalcrossing.com

          Analysts/Investors Contact
          Ken Simril
          +1 310-385-3838
          Email: investors@globalcrossing.com


TYCO INTERNATIONAL: Ex-Dir. Comments on Litigation Filed by BoD
---------------------------------------------------------------
"I am sorry that the board of directors at Tyco has decided to
take this action. This is clearly an overreaction to the recent
and well-reported problems and management changes at Tyco.

The facts are simple:
-   At the direction of then-CEO Dennis Kozlowski, I brokered a
$9.3 billion acquisition of CIT Financial on behalf of Tyco. In
doing so, I put my more than 30 years of deal making experience
to work and helped to bring the transaction to a successful
conclusion.

-   At that time, access to the financial services market was
clearly an important corporate goal for Tyco and its board of
directors. While Tyco's strategy has since changed, CIT was and
is a leader in its segment.

-   The $10 million fee I received for that service was
negotiated directly with then-CEO Dennis Kozlowski and disclosed
in Tyco's proxy.

-   Tyco, at my request, also made a $10 million donation to the
Community Foundation of New Jersey (www.CFNJ.org). The donation
was also disclosed in Tyco's proxy. CFNJ funds a variety of
organizations including those that advance health, education,
culture, social services and civic organizations in New Jersey. I
am an advisor to CFNJ in the use of those funds, but not a
trustee with any active control of the funds."

CONTACT:  Miller DeMartine Group
          Media Contact:
          Gregory Miller, 203/221-2790
          gmiller@mdgpr.com


TYCO INTERNATIONAL: Success of CIT IPO Tied to Argentina
--------------------------------------------------------
Hoping to raise money to avoid a financial collapse as it battles
with heavy debt obligations and investigations by prosecutors and
regulators, Tyco International Ltd. will float its 100% stake in
finance firm CIT Group, Inc. in the next few weeks.

However, in a report, Reuters suggests that the Company's
underwriters will have to persuade investors that exposure to
Argentina, the airline industry, telecoms and PC sales are good
bets.

CIT registered a US$95-million credit loss reserve in the March
quarter because of the Argentine peso's devaluation. CIT said its
exposure to Argentina is limited to US$180 million.

But CIT's risks are even greater in the telecommunications
industry, which has been waylaid by bankruptcies, heavy debt and
plunging share prices. CIT's telecom portfolio totaled US$684.2
million at the end of March.

"If weakness continues in the telecommunications industry, the
value of our telecommunications portfolio could be adversely
impacted," CIT warned recently in a SEC filing.

While some of CIT's risks are well known and not unusual,
investors and analysts said they have scant information about
CIT's heavy bet on the PC industry in a joint venture with Dell
Computer Corp. CIT inherited the business from Newcourt and
renewed the contract in 2000.

The joint venture, called Dell Financial Services LP, which has
financed US$7 billion in computer purchases by Dell customers
over the past three years, shields Dell from any losses on
financed PC purchases and gives CIT only 30% of the profit,
according to disclosures made by Dell.

"It's clearly risky financing because you're talking about an
asset that depreciates quickly," Rob Plaza, an analyst at
Morningstar Inc., said, referring to the Dell pact. "But it could
be a good deal if CIT is insulated properly."

Tyco said it will use the CIT IPO proceeds to refinance about $4
billion in debt coming due in February. Tyco, which paid nearly
$10 billion for CIT last year, is working to head off a liquidity
crisis at the sprawling conglomerate.

Under Tyco's direction, CIT sold several billion dollars worth of
underperforming assets, such as loans for recreational vehicles,
boats and manufactured housing.

U.S. regulators recently forced Tyco to cut CIT's carrying value
to US$6.5 billion, down from the US$11.3 billion on Tyco's books.
Some analysts see CIT fetching US$5 billion or less in a tough
market for initial public offerings.

CONTACT:  TYCO INTERNATIONAL
          Gary Holmes
          Tel. +1-212-424-1314
               +1-212-424-1307
          Web site:  http://www.tyco.com

          CTI Group (Holdings), Incorporated
          333 North Alabama Street
          Suite 240
          Indianapolis, IN. 46204-1767
          Tel:317-262-4666
          Fax:317-262-4605
          Home Page: http://www.ctigroup.com/index.asp
          Contact: Brad Houlberg, Chief Executive Officer
          Email: dsauceda@ctigroup.com


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

AES CORP.: New CEO Commits to Increasing Shareholder Value
----------------------------------------------------------
The AES Corporation announced Tuesday that its Board of Directors
has elected Paul T. Hanrahan as President and Chief Executive
Officer, effective immediately.

Mr. Hanrahan previously has been Executive Vice President and one
of four Chief Operating Officers.

The board elected Mr. Hanrahan after Dennis W. Bakke, who had
been President and CEO since 1994, announced his intent to
retire. Mr. Bakke has been given the title of Co-Founder and
Emeritus CEO, and will remain on the Board.

"The entire power sector has undergone a crisis of confidence,
and investors are demanding change. Although AES has grown a
great deal during my tenure, it became clear to me that this is a
time for a new CEO," Mr. Bakke said. "Different times require
different leaders."

Roger W. Sant, chairman and co-founder of AES along with Mr.
Bakke, said that the board selected Mr. Hanrahan as President and
CEO "because of his demonstrated effectiveness as a problem-
solver, his management experience around the globe, and his
financial acumen."

During Mr. Hanrahan's 15 years with AES, he has held senior
executive positions in North America, Europe, Asia, and South
America and has served as CEO or Chairman of three of AES'
publicly traded subsidiaries.

Mr. Hanrahan is a 1979 graduate of the United States Naval
Academy, and served in the nuclear submarine service. He received
an MBA degree from Harvard Graduate School of Business in 1986.

Mr. Hanrahan also was elected to the AES Board of Directors.

Mr. Sant said, "Dennis and I co-founded the Company in 1981 and
he has been essential in leading AES to its position as a leading
global power company. All of us at AES deeply appreciate the many
contributions he has made to the Company and its people over the
years."

"AES has experienced the same problems as many others in the
power sector, including reduced access to capital, weak
electricity prices, and difficulties in emerging markets," said
Mr. Hanrahan. "We do differ significantly from most companies in
our industry because we are not engaged in energy trading as a
business and we are not materially affected by the industry
problems in California. However, we have significant issues that
I must address immediately to maximize value for AES
shareholders."

"My immediate priorities include vigorous strengthening of the
AES balance sheet, improving liquidity, reducing operating
expenses, and resolving our significant issues in South America
in a way that is most beneficial for AES shareholders," Mr.
Hanrahan said. "We will enjoy some growth in the next few years
from delevering, cost cutting, and completion of projects
currently in construction."

Mr. Bakke co-founded AES in 1981. He served as Executive Vice
President and Chief Operating Officer until 1990, when he became
President. He was named CEO in 1994.

"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: This news release may contain "forward-
looking statements" regarding The AES Corporation's business.
These statements are not historical facts, but statements that
involve risks and uncertainties.

Actual results could differ materially from those projected in
these forward-looking statements. For a discussion of such risks
and uncertainties, see "Risk Factors" in the Company's Annual
Report or Form 10-K for the most recently ended fiscal year.

AES is a leading global power company comprised of contract
generation, competitive supply, large utilities and growth
distribution businesses.

The company's generating assets include interests in 177
facilities totaling over 59 gigawatts of capacity, in 33
countries. AES's electricity distribution network sells over
108,000 gigawatt hours per year to over 16 million end-use
customers.

For more general information visit our web site at www.aes.com or
contact investor relations at investing@aes.com.

CONTACT:          AES     
                  Kenneth R. Woodcock, 703/522-1315


CODESP: To Let Go of Port Santos
--------------------------------
Brazilian authorities are ironing out the final details of an
agreement that will see the transfer of the administration of the
country's largest port Santos from federal to state government,
reports Business News Americas, citing business daily Valor
Economico.

Codesp (Companhia Docas do Estado de Sao Paulo), which is a
state/private company controlled by the federal Government,
currently operates Santos sited in the southeast state of Sao
Paulo. The Company is to be liquidated as soon as control of the
port will be handed over to a new public company.

The new public company will have the state government of Sao
Paulo as its majority shareholder with the municipalities of
Santos, Cubatao and Guaruja as its minority shareholders.

The agreement currently being finalized will see the new company
passing 60% of its future revenue gained from renting port areas
to Codesp so the latter can clear outstanding debts. The move
will require an estimated amount of BRL480 million (US$178
million) over the next eight years.

"The new company will keep the other 40% plus all the operating
revenue gained from fees on shipping volumes," Codesp
spokesperson Cecilia Souza said.

The new company also plans to hire 950 of Codesp's 1,200
employees. The old state-run port operator will continue with
only 50 workers and the other 200 will be laid off.

Codesp will also remain with receivable credits including BRL100
million (US$37 million) owed by Libra for renting areas of the
port and BRL180 million in fees that Sao Paulo-based flat steel
maker Cosipa owes for using port infrastructure.

Codesp has recognized debts of around BRL400 million (US$148
million). The total, which will remain with Codesp or the federal
treasury, could increase depending on the conclusion of judicial
actions taken by creditors. The newly created company will start
life free of any liabilities.

"The state will remain with a profitable company and with
capacity to invest," said Manoel Andrade de Silva Reis, an
advisor to the state transport department. He estimates the new
company will have to invest BRL20 million (US$7.4 million)
annually in port infrastructure.

The date for transferring control of Santos has not been set.

CONTACT: Companhia Docas do Estado de Sao Paulo
         (CODESP)(Port Authority)
         Ave Cons Rodrigues Alves s/n,  
         Macuco, Santos SP 01015-900,  
         Brazil
         Phone: 55-132-351-611
         Fax: 55=132=333=080
         Contact: Fernando Lima Barbosa, President


INDUSTRIAS KLABIN: Plans to Roll Over Short Term Debt
-----------------------------------------------------
Industrias Klabin SA, one of Brazil's largest pulp and paper
producers, is seeking to pay off or roll over part of a eurobonus
issue coming due in December, reports South American Business
Information, citing an O Estado de Sao Paulo report.

The Company wants to manage the debt as early as now before
further instability hits Brazil's financial markets.

Debt refinancing will include a debenture issue of BRL500
million, which will be managed by Bradesco and Unibanco, as well
as a pre-payment of exports in the value of US$100 million.

Klabin has BRL2.4 billion (US$1 billion) in debt, approximately
BRL1.13 billion of which will mature this year.

In March, the Company revealed it was considering a sale of its
pulp or tissue businesses in order to reduce its debts. Among the
options being considered were: sell one of the two businesses
entirely, or sell a minority stake to a partner

"Our debt is bigger than what we would like it to be," chief
executive Miguel Sampol Pou said at that time. "We can reduce
that by increasing revenue from our existing business, being more
selective about our investments, or selling some of assets."

At that time, Pou also disclosed plans by Klabin to slash
spending this year by 22 percent to BRL250 million, from BRL320
million last year to make more cash available for debt payments.

CONTACT:  Industrias Klabin de Papel e Celulose S.A. (IKPC)
          Rua Formosa, 367, 12 Andar
          01049-000 Sao Paulo, Brazil
          Phone: +55-11-3225-4000
          Fax: +55-11-3255-4067
          Home Page: http://www.klabin.com.br
          Contact:
          Israel Klabin, Chairman
          Miguel Sampol, CEO
          Ronald Seckelmann, Investor Relations CFO and Director

          UNIBANCO - UNIAO DE BANCOS BRASILEIROS S.A.
          Av. Eusibio Matoso, 891 - 15: floor  
          Sco Paulo - Zip Code 05423-901 - Brazil  
          Phone: (5511) 3097-1313 or (5511) 3097-4050  
          Fax: (5511) 3813-6182  
          Home Page: http://www.unibanco.com.br/
          E-mail: investor.relations@unibanco.com.br  
          Contact:  
          Geraldo Travaglia, CFO and Executive      
                             Director  
          Julia Reid, Investor Relations Associate  
                      Director  

          BRADESCO
          Investor Relations Area  
          New Building - 4: TO WALK
          City of God, S/N, Osasco,  
          CEP.: 06029-900 Sco Paulo, Brazil
          Phone: (55-11) 3684-9229/9302/2086
          Fax: (55-11) 3684-9775
          Home Page: www.bradesco.com.br/
          Email:  
          4260.jean@bradesco.com.br  
          4260.bernardo@bradesco.com.br  
          4260.luciano@bradesco.com.br  
          4260.andressa@bradesco.com.br


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

TELECOM: Sees End to Strike After Reaching Wage Deal With Workers
-----------------------------------------------------------------
The 28-day strike at Empresa Nacional de Telecomunicaciones SA
(Telecom) ended Sunday after the Colombian state-owned
telecommunications company struck a wage agreement with unionized
workers.

According to Telecom chief Hernan Roman, a collective bargaining
agreement for this year and 2003 that includes average pay
increases of 5.4% for the Company's 6,500 workers was signed
early Sunday. Roman said the pay hike would cost the Company
close to US$7 million.

Furthermore, Telecom also agreed not to eliminate some employee
benefits that were in dispute, including home and auto loans.

Last week's reports have cited Colombian Communications Minister
Angela Montoya as saying that Telecom is on the brink of
liquidation.

According to executives from the company, Telecom, which is one
of the country's largest has been in the red since 1996 and is
facing US$2 billion in pension liabilities for its 14,000 retired
employees.

Telecom is also liable for penalty payments of more than US$800
million in total to six multinational firms, including Canada's
Nortel Networks Corp., under joint-venture contracts, principally
for the installation of new telephone lines by
Telecom's international partners in Colombia.

Telecom provides 70% of Colombia's local long-distance services
and 50% of its international market.

CONTACT:  EMPRESA NACIONAL DE TELECOMUNICACIONES (TELECOM)
          Calle 23 No 13-49, Bogot
          Colombia
          Phone: 286-0077
                 282-8280
          Home Page: http://www.telecom.com.co/


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

BANRURAL: Govt. Rules Out Rescue for Technically Dead Institution
-----------------------------------------------------------------
The Mexican government decided to liquidate Banrural in a move
seen as an end to widespread corruption in the public banking
sector and accumulation of bad loans and losses at the bank.  

"It is not possible to save Banrural. It's technically dead and
we will not revive this Lazarus.... because it has caused
terrible damage," the president of the senate's finance
commission, Fauzi Hamdan Amad, said.

The agriculture and development bank will be closed in September
and will be replaced by a new development bank named Banco
Nacional de Fomento Agropecuario pending the approval of the
Congress

The new bank will be operational by the time Banrural is closed.

According to Amad, the liquidation will require MXN30 billion
(US$3.1 billion), but keeping it open would cost even more.  

Hamdan is counting on the new agricultural bank to efficiently
serve the Mexican agricultural sector.  According to him, the
government has undertaken studies on agriculture development
banks in France and UK to design a truly modern and efficient
institution.  

CONTACT:  BANRURAL
          Agrarianism No. 227  
          Col. Escandsn  
          Deleg. Miguel Hidalgo  
          11800 Mexico, D.F.  
          Lada 01  
          Phone: 57-23-13-00  
          Home Page: www.banrural.gob.mx/  
          Contact:
          Dr. Jose Antonio Meade Kuribreqa, Main  
          Directorate
          Agrarianism no. 227 70 floor  
          Ext. 2000  
          Fax Dir. 5230-1639  
          Fax 1639  


CLUB MED: To Break Even in 2002
-------------------------------
Philippe Bourguignon, chairman of Club Mediterranee, expects the
French leisure group to break even in the second half of 2002,
based on improved bookings, relates Bloomberg.

At a recent press conference, the executive revealed his
predictions that the French company, with villages in Tunisia,
Mexico and Australia, will break even before tax and interest
charges if sales drop 10% or less. However, he didn't give a
sales forecast.

Bookings fell 6.9% in the past four weeks after dropping 19% in
the first half.

"Things are perhaps going a little bit better," said Chrystele
Lucas, who helps manage EUR10 billion (US$9.5 billion) at Credit
Mutuel Finance in Paris and owns Club Med shares. "It's too soon
to know if the restructuring measures they took worked. I'm
waiting for the summer to see."

Bourguignon's predictions helped boost Club Med's shares. The
stock rose as much as EUR2.75 euros, or 8.1%, to EUR36.75, their
biggest jump since Nov. 19. They lost 11% last week.

Club Med sacked 400 staff and closed resorts in Morocco, Greece
and elsewhere, following the September 11 terrorist attacks
against the U.S., as part of its restructuring efforts.

Managing Director Henri Giscard D'Estaing said some will remain
shut, while others will open gradually or later in the season
than usual.

In the first half ended April 30, Club Med posted a net loss of
EUR25 million (US$23.7 million). Sales during the period fell 15%
to EUR816 million, compared to a net income of EUR6 million in
the year-earlier period.

Club Med registered an operating loss of EUR4 million in the
period, compared with profit of EUR34 million a year ago.


CORPORACION DURANGO: Moody's Assigns, Confirms Ratings
------------------------------------------------------
Moody's Investors Service assigned B3 senior unsecured rating to
Corporacion Durango, S.A. de C.V.'s (Durango) proposed senior
notes and confirmed all of the Company's existing ratings. The
outlook remains negative.

The ratings assignment and confirmation reflected the vertical
integration of Durango's operations and the Company's market
position as one of the largest integrated paper producers in
Latin America based on sales.

The ratings also reflected a high degree of leverage, weak
interest coverage protection, exposure to fluctuating raw
material costs and limited control of product pricing,
particularly in containerboard and corrugated packaging, and
newsprint. Durango also faces increased competition from
substantial competitors with greater access to financial
resources in both Mexico and the United States. In addition, with
substantially all debt being U.S. dollar denominated the Company
is subject to foreign exchange risks.

However, foreign exchange risks are mitigated to a certain degree
due to a substantial portion of the Company's revenues
(approximately 43% in 2001) being U.S. dollar based thus
providing a natural foreign currency hedge.

The ratings also reflected approximately US$164 million of
secured debt, representing about 20% of total debt, which is
senior to all other debt of the Company including the proposed
new issue.

The rating outlook reflected current trough conditions in the
paper industry, the company's weak operating performance and debt
protection measures which are lower than Moody's' previous
expectations, and its constrained liquidity position that results
from uncommitted short-term bank lines.

The ratings and negative outlook also anticipate that the Company
will complete the refinancing of its remaining 12 5/8% senior
notes due 2003 in the near term, which will extend its maturity
profile.

Moody's believes that the Company will be challenged in its
efforts to significantly improve operating performance and
strengthen credit metrics over the near term given uncertainty
surrounding the timing and strength of an industry recovery in
both demand and pricing. Should operating performance and credit
metrics deteriorate further a lowering of the current rating is
likely. Notwithstanding, given Durango's present cost structure,
should volume growth and pricing assumptions in its product
categories meet the Company's expectations over the next several
quarters, an improved rating outlook is probable.

Based on US GAAP for FYE 12/31/01 financial leverage was high
with Debt/EBITDA of 5.5 times, interest coverage was weak with
EBIT/Interest of 1.05 times. The Company's performance continues
to be negatively impacted by weak demand and poor pricing across
most of its product segments.

In addition, although in 2001 Durango's reported mix price
improved year-over-year about 2%, the mix price steadily declined
to US$589/ton at 1Q02 from US$658/ton in 1Q01. Moody's also noted
that if the US$95 million loan at Administradora Corporativa y
Mercantil, S.A. de C.V., a holding company that owns 16.2% of
Durango, is merged into Corporation Durango at maturity in 2005,
as permitted by the indentures in certain conditions, leverage
would increase.

As of March 31, 2002, the Company reported approximately US$38
million in cash and equivalents and about US$100 million in
uncommitted bank lines. Although Moody's recognizes the long-term
relationships the company has established with its banks, the
ratings agency believes that since the banks are not legally
bound to fund these obligations that during difficult times the
availability of these funds would be questionable.

Durango should also benefit from recent agreements with the
Sweetheart Cup Company and The Fonda Group, which in aggregate
could require up to 100,000 tons (minimum commitments under the
agreements total 75,000 tons) of solid bleached sulfite board per
year for each of the next five years with market pricing less
certain rebates. The company believes the amount of paper product
required to fulfill these agreements will utilize all of the
unused capacity that currently exists at Durango Georgia Paper
Company's St. Mary's Mill.

Net proceeds of approximately US$164.1 million will be used to
repay all the company's 12.625% senior notes due 2003 which is
expected to be approximately US$128.4 million as well as other
short and medium term debt.

Corporacion Durango, S.A. de C.V., headquartered in Durango
Mexico, is an integrated producer of paper and corrugated
packaging products.

Ratings Assigned;

US$175 million senior notes due 2009 rated B3

Ratings Confirmed;

Senior Implied rating B2

Senior Unsecured Issuer rating B3

US$301.7 million senior notes, due 2006, rated B3

US$10.4 million senior notes, due 2008, rated B3

US$121.7 million senior notes due August 2003, rated B3

The outlook remains negative.

To see Durango's latest financial statements:
http://bankrupt.com/misc/Durango.pdf

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


MOODY'S CONTACTS:  New York
                   Julia Turner
                   Managing Director
                   Corporate Finance Group
                   Moody's Investors Service
                   JOURNALISTS: 212-553-0376
                   SUBSCRIBERS: 212-553-1653

                   New York
                   William V. Fahy
                   Associate Analyst
                   Corporate Finance Group
                   Moody's Investors Service
                   JOURNALISTS: 212-553-0376
                   SUBSCRIBERS: 212-553-1653


NII HOLDINGS: Court Approves $3.8M Retention Plan
-------------------------------------------------
A bankruptcy judge approved NII Holdings Inc.'s US$3.8-million
retention plan, allowing 24 top employees to remain with the
Company as it reorganizes its finances under Chapter 11's
bankruptcy cloak, reports Bloomberg.

At a hearing held Tuesday in Delaware, U.S. Bankruptcy Judge Mary
Walrath approved the plan, under which the wireless-phone unit's
chief executive and operating officers will receive bonuses
totaling 150% of their base salaries. Thirteen employees will get
payments equal to 100% of their salaries while nine employees
will receive payments totaling 50% of their salaries.

"It's absolutely critical that these 24 employees stay on board,"
said Daniel J. DeFranceschi, an attorney with Richards Layton &
Finger, the firm representing NII Holdings.

Most of the employees will receive 25% of the total payment soon,
25% in 60 days and the remainder when the Company's
reorganization plan becomes effective, DeFranceschi said. The
Company's top four executives will receive 25% of their total in
60 days and the remainder when the plan becomes effective.

NII, the international unit of the cell phone company Nextel
Communications, which provides services to Mexico, Brazil and
Argentina, revealed in its bankruptcy filing that it had assets
of US$1.24 billion and liabilities of US$3.26 billion as of Dec.
31, 2001.  

CONTACT:  NII Holdings Inc.
          Claudia Restrepo
          Phone: +1-305-779-3086
          E-mail: claudia.restrepo@nextel.com
  
          RICHARDS, LAYTON & FINGER, P.A.
          One Rodney Square  
          P. O. Box 551  
          Wilmington, Delaware 19899
          Phone: (302) 651-7700  
          Fax: (302) 651-7701  
          Home Page: http://www.rlf.com/welcome2.htm
          Contact:
          Daniel J DeFranceschi  
          Phone:  (302) 651-7816
          Fax:  (302) 784-7090
          E-mail:  defranceschi@rlf.com
             


=======
P E R U
=======

GREMCO: Collapses Under Economic, Political Crisis
--------------------------------------------------
Gremco, a Peruvian real estate development company, decided to
seek the country's form of bankruptcy protection known as Ley de
Reestructuracion Patrimonial, reports South American Business
Information.

The Company, which has debts of approximately US$75.29 million
with its suppliers, financers and workforce, as well as
additional amounts in taxes, attributed the move to the current
economic and political crisis in Peru.

Among its financial creditors are the Banco de Comercio, BBVA,
Continental, Interbank, Wiese Sudameris and Financiero. Gremco
will have to come to an agreement with the Coril group, which
sought a declaration of bankruptcy against Gremco last December.

The Company's creditors will have until July 1 to formally
present themselves as creditors under the agreement.

CONTACT:  GREMCO
          Chemin de Saint Bernard 06225 Vallauris Cedex
          Tel : +33 (0)493 64 19 19  
          Fax: +33 (0)493 64 80 18
          Home Page: www.gremco-sarl.com/

CREDITORS:  INTERBANK  
            Home Page: www.interbank.com.pe/
            Contact:  
            Ismael Benavides Ferreyros, General Manager  
            Jorge Espinoza Flores, Finance and Operations EVP
            Leonel Henrmquez Cartagena, Commercial Banking EVP
   
            BANCO WIESE SUDAMERIS
            Dionisio Derteano,  
            102 Esquina con Miguel Seminario
            Lima 27, Peru       
            Phone: +51-1-211-6243
            Fax: +51-1-440-4832  
            Home Page: http://www.bws.com.pe/index.shtml
            Contact:  
            Luis F. Wiese de Osma, Chairman
            Eugenio Bertini, Chief Executive Officer

            BANCO DE COMERCIO
            Jr. Lampa 560, Lima
            Tel. 428-3430
            Fax: 426-8454
            Tarjeta de Cridito: 428-0146
            Home Page: http://www.bancomercio.com/


NUEVO MUNDO: Braces for A Protracted Liquidation Process
--------------------------------------------------------
The liquidation process of the defunct Peruvian bank Banco del
Nuevo Mundo, which was suspended in April, may take two years to
complete, reports Business News Americas, citing a spokesperson
from the banking regulator's office.

The Supreme Court, which will approve the liquidation, is still
studying evidences backing a new legal motion filed by the bank's
former owner, the local Levy group, seeking to regain the bank's
ownership.

Speculation is rife among local market observers that the Supreme
Court will rule in favor of the regulator because the
government's prestige is at stake.

Levy group, which controls Nuevo Mundo, lodged a legal battle to
prevent the bank from being liquidated or sold, claiming it was
capable of financially cleansing Nuevo Mundo on its own.

The high-profile case scared off potential investors and Nuevo
Mundo finally went into liquidation in October last year, after
the Levy group lost in the courts.

The liquidation process proceeded until April this year when the
former owners made a last ditch attempt to save the bank by
taking their case to the Supreme Court.

Nuevo Mundo was intervened by regulators in December 2000 after a
run on deposits triggered by former President Alberto Fujimori's
surprise flee to Japan.

Bank liquidations in Peru are usually drawn-out affairs because
the parties involved can appeal to different bodies within the
judicial system, local rating agency Apoyo & Asociados
Internacionales banking analyst Johanna Izquierdo said.

In some extreme cases liquidation processes have been going on
for up to 20-years, she noted. Apoyo & Asociados Internacionales
is an affiliate of international rating agency Fitch Ratings.

An analyst from a local brokerage also noted that liquidations
are complicated due to the difficulty of recovering loans and
other assets, as the legal framework for collecting on debts is
very weak.

CONTACT:  BANCO DEL NUEVO MUNDO
          Av Paseo de la Repzblica 3033,  
          27 Lima, Peru
          Phone: 472-5121
          Fax: 440-2940


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

BWIA: Privatization Contributes Largely to Survival
---------------------------------------------------
A decision by the previous PNM government to privatize BWIA
helped the Trinidad national airline to withstand the effects of
the September 11, 2001 attacks against the United States, says
Prime Minister Patrick Manning.

"What was necessary was judicious policy initiatives, proper
organization, visionary planning and commitment to excellence on
the road ahead," Manning said.

"Recent initiatives have vindicated our initiatives," he said.
"In many respects, while so much around the world is crumbling,
Trinidad and Tobago has been holding strong and our flag has been
flying high."

Manning told the airline's staff that "you remain a symbol of our
native spirit which involves the determination to triumph
notwithstanding the odds".

BWIA posted an after-tax loss of US$66.5 million for the year
ended December 31, 2001.

CONTACTS:  BWIA West Indies Airways
           Phone: + 868 627 2942
           E-mail: mailto:mail@bwee.com
           Home Page: http://www.bwee.com/
           Contacts:
           Conrad Aleong, President and CEO (Trinidad)
           Beatrix Carrington, VP Marketing and Sales (Barbados)
           Paul Schutz, Chief Financial Officer (Trinidad)


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

GALICIA URUGUAY: Parent Proposes Liquidation
--------------------------------------------
Argentina's Banco de Galicia y Buenos Aires SA proposed to
liquidate its wholly owned Uruguayan subsidiary, Banco Galicia
Uruguay SA, reports Bloomberg.

The unit, whose operations were suspended by regulators in Feb.
following a run on deposits, reportedly offered last week to pay
depositors 3% of their savings in cash and the remainder in bonds
or other securities.

However, the Uruguayan central bank slammed the offering, saying,
"The initial payment of only 3% of every obligation appears
insufficient."

The central bank's objections may make it more expensive for
Banco de Galicia to proceed with the liquidation plan.
Nevertheless, the Central bank said the Argentine bank can still
go ahead with the plan if depositors accept it.

However, about forty Galicia Uruguay depositors demonstrated
Monday in front of the central bank to show protest against the
proposal and demanded a cash payment of 40% of their deposits.

Galicia Uruguay needs to convince 75% of its 13,000 depositors to
accept the plan. A depositors' meeting is scheduled for July 23.

Galicia Uruguay, the country's biggest non-government bank by
deposits, had about US$1 billion of deposits, US$1.67 billion in
assets and US$231 million in shareholders equity as of Dec. 31.

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

          BANCO GALICIA URUGUAY S.A.
          World Trade Center
          Luis A. Herrera 1248 Piso 22 Montevideo
          Uruguay
          Tel.:(+598-2) 628-1230
          www.bancogalicia.com.uy


                                   ***********

        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
written permission of the publishers.

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

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


* * * End of Transmission * * *