/raid1/www/Hosts/bankrupt/TCRLA_Public/021211.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

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

        Wednesday, December 11, 2002, Vol. 3, Issue 245

                         Headlines


A R G E N T I N A

METRORED: Won't Draw Additional Funding From Brasil Telecom
REPSOL YPF: Shares Drop Over Argentina Revenue Capture Plan
* Banks Bid For Argentina's Debt Advisory Counsel


B E R M U D A

MRM: Court Rules Business Commutation Agreement Binding
TYCO INTERNATIONAL: Sues Kozlowski Anew, Seeking Disgorgement


B R A Z I L

AES CORP.: Extends Exchange Offer Date Expiration
AES CORP.: Reaches Minimum Condition of Exchange Offer
ELETROPAULO METROPOLITANA: Seeks Suspension Of Dividends
ELETROPAULO METROPOLITANA: Merrill Lynch Cuts to "Sell"
ESCELSA: EDP Announces Successful Consent Solicitation

NET SERVICOS: Shares Plunge Following Moody's Ratings Cut
VARIG: Business as Usual for Customers Flying On United Airlines
VARIG: Moves To Restructure Debt With Fuel Distributor


C H I L E

ENAMI: VP Meets With Sonami Reps To Discuss Sale Implications


C O L O M B I A

SEVEN SEAS: Granted Additional Extension of Cure Period
* Fitch Rates Colombia's Sovereign Bond 'BB'
* Colombia May Get $2B IMF Accord In January


M E X I C O

BITAL: HSBC To Inject $800M In New Funds
EL PASO: Sells Samalayuca II Power Plant Interest to GE
GRUPO TMM: Mexican Fiscal Court Denies TFM's VAT Claim
IUSACELL: Fails to Meet Requirements, Warns of NYSE Suspension


P E R U

EDEGEL: Covers Debt Payments With $5.68M Short-Term Paper Issue


T R I N I D A D   &   T O B A G O

BWIA: UAL Bankruptcy May Threaten Alliance


V E N E Z U E L A

PDVSA: Strike Prompts Moody's Securities Ratings Review
PDVSA: Board Members Resign Hoping To End Worsening Strike


     - - - - - - - - - -


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


METRORED: Won't Draw Additional Funding From Brasil Telecom
-----------------------------------------------------------
A MetroRed Telecom top executive denied speculation that
Brazilian fixed line operator Brasil Telecom could provide
additional funding for the corporate communications provider.
CFO Julio Mazzarella told Business News Americas that MetroRed
would derive new funding only from MetroRed's existing
shareholders.

In August, the Brasil Telecom board approved the acquisition of a
19.9% stake of MetroRed Brazil. The new funding will come
primarily from Fidelity Investments and BankBoston's Boston
Ventures.

Simultaneously, Mazzarella also confirmed that Argentine business
group Coinvest had agreed to bail out MetroRed Argentina from
bankruptcy, not UK-based banking group HSBC, as suggested by the
local press. HSBC is already an indirect investor in the unit
through its investments in Argentine investment fund Metrocom, as
well as a minority investor in MetroRed Telecom.

Coinvest was formed early this year by former directors of fixed
line telco Telefonica de Argentina, CEI Citicorp Holdings and the
Exxel Group.

The sale of MetroRed Argentina's assets - initially valued at
US$9 million - didn't go through Friday as scheduled because
Argentine judge Fernando Ottolenghi closed the unit's bankruptcy
case last Thursday.

Mr. Mazzarella added that it is hard to place a value on MetroRed
Argentina's total debt since some loans have been converted to
pesos and others remain dollar denominated, such as a US$30
million loan from BankBoston, of which US$4 million is already
paid off. Local press put the figure at ARS112 million
(US$31.4mn), while Mazzarella doubted they reach US$50 million.

CONTACT:  METRORED TELECOMUNICACIONES
          Paseo Col>n 746
          Piso 4 (C1063ACU)
          Buenos Aires
          Argentina
          Phone: (5411) 4876-7700
          Fax: (5411) 4876-7767
          Home Page:  metrored@metrored.com.ar


REPSOL YPF: Shares Drop Over Argentina Revenue Capture Plan
-----------------------------------------------------------
Shares of Repsol YPF SA, Europe's fifth-biggest oil company, fell
as much as 3.2% to EUR12.07 on reports that Argentina's central
bank wants oil companies to keep all of their export revenue in
the country, up from the current 30%. According to Spanish paper
El Mundo and Argentine paper Clarin, central bank chief Aldo
Pignanelli ordered lenders to require oil exporters to channel
their revenue through the central bank.

However, Mr. Pignanelli, who announced the measure on Thursday,
the day he resigned, didn't make the order official. Companies
and the government are in talks, and oil companies can still take
70% of export revenue out of the country, Clarin said.

Repsol's shares have dropped 26% this year after Argentina
devalued its currency and slapped restrictions on oil companies
in an effort to shore up its banks.

"The most recent measures in Argentina had all been positive for
Repsol and had brought calm to the market, and whether this one
goes forward or not, it's a reminder of the risk of being in
Argentina," said Enrique Soldevila, an analyst at BPI SGPS SA.
"Still, the government seems to be on the companies' side on
this."

CONTACT: Repsol YPF SA
         Head Office
         Paseo de la Castellana 278
         28046 Madrid
         Spain
         Tel  +34 91 348 81 00
         Fax  +34 91 348 28 21
         Telex  48162 RESOLE
         Web  http://www.repsol.com/
         Contacts:
         Alfonso Cortina de Alcocer, Chairman
         Jose Vilarasu Salat, Vice Chairman
         Antonio Hernandez, Vice Chairman


* Banks Bid For Argentina's Debt Advisory Counsel
-------------------------------------------------
Seven international banks submitted bids to become Argentina's
adviser on the restructuring of the US$95 billion of bonds, which
the country had defaulted on last December.

The bidders include Bank of America Corp., Morgan Stanley,
Acciones Grupo Wall Street Securities SA, Lazarde Freres & Co.
LLP, Credit Lyonnais SA, UBS Warburg LLC and Dresdner Bank AG,
according to a report from Bloomberg News, Monday.

The report also indicates that the winning bidder may get the job
in January next year. An earlier Bloomberg report said that the
government hopes to start renegotiations by February.

Argentine Finance Secretary Guillermo Nielsen said, "Over the
next weeks, we will analyze the technical capacity of these
banks."

Analysts say that the winning bidder may be receiving a fee of
US$100 million or more.

Argentina needs to reach an agreement with its creditors on the
biggest default ever committed in history in order for the
country to regain access to international credit markets which
may help pull it out of the worst recession in a century, said
the report.

The negotiation is also part of the requirements the
International Monetary Fund is asking in order to grant the
country a new aid package.

The report indicated that a number of the world's largest banks,
including Credit Suisse First Boston and Citigroup Inc. were
excluded from advising the country because they helped the
government borrow in the 24 months before last December's
default.

Earlier, the government had discouraged the said banks from
bidding.



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

MRM: Court Rules Business Commutation Agreement Binding
-------------------------------------------------------
A Pennsylvania court ruled that the commutation agreement between
subsidiaries of Mutual Risk Management is binding and should go
ahead, saying it was in the best interest of all parties.

According to the Royal Gazette's Monday edition, the agreement
would see Mutual's rent-a-captive group - the IPC companies -
transfer reinsurance contracts and the money to support them to
MRM's US insurer - Legion. Legion and sister company Villanova
are currently under state-regulated rehabilitation after
Pennsylvania insurance regulators took over control of the
companies for financial reasons in March.

According to the report, the said agreement had first been
proposed in April but negotiations with insurance regulators
meant the letter of intent was not agreed until July. But just
ahead of its being signed into effect, insurance commissioner
Diane Koken, who had been seeking Legion's liquidation, backed
down on signing the agreement. The commutation would put the
Legion group into a solvent position and could keep it from wind-
up.

The agreement would see the IPC Companies commute 120 reinsurance
contracts and the money to support them to Legion.  The report
indicated that a payment of US$130 million in support of the
contracts and about US$100 million held in trust would be
transferred with the contracts.

The ruling was good news from MRM, which had negotiated to get
the commutation agreement put in place, but the Company's new
chief executive is not very enthusiastic about it, saying the
Pennsylvania Department of Insurance would likely file an appeal.

However, Ezekiel was quoted in the report saying, "If the
commutation is successfully completed it will do two things: It
will make the evaluation of the IPC companies in Bermuda a lot
more certain as we would have got a number of liabilities off our
books and paid."

"And it will provide Legion with the liquidity to meet claims
payments and keep the company going. We think it is important for
both companies and it would put Legion in a positive cash flow
position. When it went into rehabilitation it had a surplus in
excess of $400 million but a severe cash flow problem brought
about by its inability to collect from its reinsurers, " he
added.

CONTACT:  MUTUAL RISK MANAGEMENT INC.
          P.O. Box HM 2064
          44 Church Street
          Hamilton  HM HX
          Bermuda
          Tel: (800) 772-0849 or (441) 295-5688
          Homepage: http://www.legioninsurance.com
          Contacts:
          Angus H. Ayliffe, Chief Financial Officer
          Fran Tucker, Investor Relations

          Legion Insurance Company (In Rehabilitation)
          Villanova Insurance Company (In Rehabilitation)
          Legion Indemnity Company
          One Logan Square
          Suite 1400
          Philadelphia, PA  19103
          Tel:   215.979.7879
          Fax:  215.963.1205
          Contacts:
          Joseph M. Boyle, Acting President
          Paul Forbes, Senior Vice President - Underwriting
          Andrew Walsh, General Counsel
          Steve Zielinski, Senior Vice President - Claims
          Gregg Frederick, Senior Vice President - Reinsurance



TYCO INTERNATIONAL: Sues Kozlowski Anew, Seeking Disgorgement
-------------------------------------------------------------
Bermuda-based conglomerate Tyco International Ltd filed more
charges on Monday, against its former chief executive Dennis
Kozlowski and former finance chief Mark Swartz, for allegedly
making dozens of "short-swing" stock trades.

According to a report from the Associated Press on Monday, the
Company is seeking disgorgement of more than US$40 million in
profits, plus unspecified fees and costs associated with the
case.

The rules of the Securities and Exchange Commission provide that
the Company may seize any "short-swing" profits made by corporate
insiders who buy and then sell the firm's stock within a six-
month period, according to the report.

The two former executives are facing charges of grand larceny and
enterprise corruption for allegedly embezzling million in company
funds. Both are currently out on bail.

Kozlowski's legal counsel did not return calls to comment on the
lawsuit, said the report.

However, Charles Stillman, Swartz' lawyer said that he and his
client will "vigorously contest" the lawsuit, adding that they
are disappointed that the Company saw it fit to file the said
charges against his client.

Tyco shares, which had suffered a decline this year, fell another
46 cents in Monday's trading at the New York Stock Exchange,
closing at US$16.24 each.

CONTACT: TYCO INTERNATIONAL LTD.
         Corporate Office
         The Zurich Centre, Second Floor
         90 Pitts Bay Road
         Pembroke HM 08, Bermuda
         Phone: 441-292-8674
         Home Page: http://www.tyco.com
         Contacts:
         Gary Holmes (Media)
         Tel +1-212-424-1314
                 or
         Kathy Manning (Investors)
         Tel +1-603-778-9700



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

AES CORP.: Extends Exchange Offer Date Expiration
-------------------------------------------------
The AES Corporation (NYSE: AES) announced Monday that it had
extended the expiration date of the exchange offer relating to
its outstanding $300,000,000 8.75% Senior Notes due 2002 ("2002
Notes") and $200,000,000 7.375% Remarketable or Redeemable
Securities due 2013, which are puttable in 2003 ("ROARs"), from
5:00p.m., New York City time, on December 6, 2002 to 5:00p.m.,
New York City time, on December 9, 2002.

The AES Corporation has been informed by the exchange agent that,
as of 5:00 p.m., New York City time, on December 6, 2002,
approximately $233,768,000 in aggregate principal amount of its
2002 Notes and $172,869,000 in aggregate principal amount of its
ROARs had been tendered in the exchange offer. These amounts
represent approximately 78% and 86% of the outstanding 2002 Notes
and ROARs, respectively. Consummation of the exchange offer is
subject to a number of significant conditions including the
condition that 80% in aggregate principal amount of the 2002
Notes and 80% in aggregate principal amount of the ROARs are
validly tendered.

The offering of the new senior secured notes in the exchange
offer is being made only to "qualified institutional buyers" and
"persons other than a U.S. person" located outside the United
States, as such terms are defined in accordance with Rule 144A
and Regulation S of the Securities Act of 1933, as amended, and
two individuals affiliated with AES who are accredited investors.

The new senior secured notes will not be registered under the
Securities Act of 1933, or any state securities laws. Therefore,
the new senior secured notes may not be offered or sold in the
United States absent an exemption from the registration
requirements of the Securities Act of 1933 and any applicable
state securities laws. This announcement is neither an offer to
sell nor a solicitation of an offer to buy the new notes.

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


AES CORP.: Reaches Minimum Condition of Exchange Offer
------------------------------------------------------
The AES Corporation (NYSE:AES) announced that its exchange agent
informed the company that, as of 5:00 p.m., New York City time,
on December 9, 2002, approximately $240,013,000 in aggregate
principal amount of its outstanding 8.75% Senior Notes due 2002
("2002 Notes") and $172,869,000 in aggregate principal amount of
its outstanding 7.375% Remarketable or Redeemable Securities due
2013, which are puttable in 2003 ("ROARs") had been tendered in
the exchange offer.

These amounts represent in excess of 80% and approximately 86% of
the outstanding 2002 Notes and ROARs, respectively.

Although the minimum condition has been satisfied, consummation
of the exchange offer remains subject to a number of significant
conditions, which have not yet been satisfied, including AES'
concurrent entry into new senior secured credit facilities to
refinance its existing credit facilities.

AES also announced that it had extended the expiration date of
the exchange offer relating to its 2002 Notes and ROARs from
5:00p.m., New York City time, on December 9, 2002 to 5:00p.m.,
New York City time, on December 11, 2002.

The offering of the new senior secured notes in the exchange
offer is being made only to "qualified institutional buyers" and
"persons other than a U.S. person" located outside the United
States, as such terms are defined in accordance with Rule 144A
and Regulation S of the Securities Act of 1933, as amended, and
two individuals affiliated with AES who are accredited investors.

The new senior secured notes will not be registered under the
Securities Act of 1933, or any state securities laws. Therefore,
the new senior secured notes may not be offered or sold in the
United States absent an exemption from the registration
requirements of the Securities Act of 1933 and any applicable
state securities laws.

This announcement is neither an offer to sell nor a solicitation
of an offer to buy the new notes.


ELETROPAULO METROPOLITANA: Seeks Suspension Of Dividends
--------------------------------------------------------
Eletropaulo Metropolitana SA, which distributes power to 5
million people in Sao Paulo, is urging shareholders to approve a
proposal to suspend dividend payments. The company is looking for
any means to conserve cash, reports Bloomberg.

"This measure is justified by the extreme effort the company is
making" to solve its financial problems, Eletropaulo said in a
statement to the Sao Paulo stock exchange.

Eletropaulo needs to conserve cash as it tries to free itself
from financial distress caused by a 38% plunge in Brazil's
currency against the dollar this year. The radical currency
fluctuation drove up cost of making payments on foreign currency
debt.

For months now, the unit of U.S.-based AES Corp. has been trying
to negotiate more time to make payments on about US$1 billion in
foreign currency debt. Eletropaulo gave banks and investors until
Wednesday to respond to proposals to swap commercial paper for
longer term debt. Last week, banks agreed to extend payments for
24 months on a US$191-million loan that had been due in August.


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 Gonzalves Jr., VP Finance/Investor Relations


ELETROPAULO METROPOLITANA: Merrill Lynch Cuts to "Sell"
-------------------------------------------------------
Merrill Lynch sees a possibility that Eletropaulo Metropolitana
will be able to refinance its US$100 million of commercial paper
coming due on December. Even so, Merrill Lynch downgraded its
stock recommendation on the Brazilian utility to `sell' from
`neutral' on expectation that "debt issues are likely to continue
to weigh on the stock," reports Dow Jones.

Although Eletropaulo's future financing needs "should be sharply
lower" than the nearly US$665 million of debt that it had to
repay this year, the utility has "increasingly little room to
maneuver," Merrill said. The Brazilian economy is shrouded with
uncertainty and this puts pressure on Eletropaulo's earnings.

"While the most likely outcome is that the company eventually
gets an extension (on its debt deadlines,) and, in the end, is
able to refinance (the debt), this is not assured. And, continued
difficult access to the capital markets could be problematic,"
Merrill said.


ESCELSA: EDP Announces Successful Consent Solicitation
------------------------------------------------------
EDP - Electricidade de Portugal, S.A. ("EDP") announced Monday
that it has achieved the requisite consents under its previously
announced offer to purchase and consent solicitation relating to
any and all of Escelsa - Espirito Santo Centrais Electricas, S.A.
("ESCELSA") 10% Senior Notes due 2007 (the "Notes"). The consent
solicitation expired yesterday, December 5, 2002, at 5:00 p.m.,
New York time (the "Consent Date"). The tender offer will expire
at 11:59 p.m., New York time, on Thursday, December 19, 2002 (the
"Expiration Date"), unless it is extended or earlier terminated.

Holders of 198,737,000 principal amount of Notes, or
approximately 71%, tendered their Notes and delivered related
consents. The settlement of the tender offer and consent
solicitation will take place on or as soon as practicable after
the Expiration Date.

If EDP accepts the tendered Notes for payment, a holder of Notes
who has tendered Notes and delivered related consents prior to
the Consent Date will receive the sum of (i) the price of the
8.00% Brazil Capitalization Bond (C-Bond) due April 15, 2014
(pls. refer to Note 1) plus (ii) 5% of the face value of the
Notes tendered, but in no event will exceed US$ 770 per US$ 1,000
principal amount of Notes tendered, and ESCELSA will effect the
deletion of substantially all the protective covenants and
related default provisions in the respective Indenture.

Additional Notes may be tendered (without related consents) prior
to the Expiration Date. If EDP accepts those tendered Notes for
payment, a holder of Notes who has tendered Notes prior to the
Expiration date will receive the sum of (i) the price of the
8.00% Brazil Capitalization Bond (C-Bond) due April 15, 2014
(pls. refer to Note 1) plus (ii) 3% of the face value of the
Notes tendered but in no event will exceed US$ 750 per US$ 1,000
principal amount of Notes tendered.

EDP commenced the offer to purchase and consent solicitation on
November 20, 2002, pursuant to the offer to purchase and consent
solicitation statement. This press release is not an offer to
purchase, a solicitation of an offer to sell or a solicitation of
consents with respect to the Notes. The tender offer and consent
solicitation was made only by EDP's offer to purchase and consent
solicitation statement dated November 20, 2002.

    EDP - ELECTRICIDADE DE PORTUGAL, S.A.

Additional information

UBS Warburg LLC is acting as the Dealer Manager for the Offer and
Consent Solicitation. The Offer and Consent Solicitation are
being made pursuant to an Offer to Purchase and Consent
Solicitation Statement and related Letter of Transmittal and
Consent, which more fully set forth the terms of the Offer and
Consent Solicitation. Additional information concerning the terms
of the Offer, tendering of Notes and conditions to the Offer and
Consent Solicitation, may be obtained from Ralph Cimmino or David
Knutson at UBS Warburg LLC by dialing toll free in the United
States (888) 722-9555 at extension 8035 or +1 203 719 8035/1575.
Copies of the Offer to Purchase and Consent Solicitation
Statement and related documents may be obtained from Edward
McCarthy at DF King & Co., the Information Agent, at 77 Water
Street, 20th Floor, NY 10005 by dialing toll free from within the
United States (800) 714 3305 or +1 212 493-6952.

Note 1:

The price of the 8.00% Brazil Capitalization Bond (C-Bond) due
April 15, 2014 will be calculated by the Dealer Manager using an
average bid-side price for the named security based on prices
appearing on the Tullet, Eurobroker and Garban screens, or any
other recognized quotation source selected by the Dealer Manager
in its sole discretion if these pages are unavailable or
manifestly erroneous, as of 3:00 p.m. New York City time, two
days prior to the Expiration Date.

CONTACT:  Electricidade de Portugal, S.A.
          Investors Relations Department:
          Pedro Pires, Director
          Goncolo Santos
          Elisabete Ferreira
          Cristina Requicha
          Rul Antunes
          Tel.: +351-21-001-2834
          Fax.: +351-21-001-2899
          ir@edp.pt
          URL: http://www.cdp.pt


NET SERVICOS: Shares Plunge Following Moody's Ratings Cut
---------------------------------------------------------
Shares of Net Servicos de Comunicacao S.A. tumbled 3 centavos, or
7.5%, to 37 centavos after Moody's Investors Service cut its
rating on Brazil's largest cable operator to Ca, the second-
lowest level. The announcement affects about US$97.7 million of
debt. The rating outlook is stable.

Moody's downgraded the ratings due to the mounting liquidity
crisis at Net. The ratings service noted management's
unanticipated election to miss the requisite interest payment on
certain of the Company local currency debt obligations, as
scheduled on December 2, 2002.

On the same date, the Company announced that it expects to
present a new debt-restructuring proposal to creditors during the
second half of January 2003.

"The ratings are constrained by the continuing negative impact of
the economic slowdown on Brazilian consumer disposable income, as
well as heightened competitive pressures, especially from DBS
providers in the pay-TV business and from ADSL services provided
by incumbent wireline service providers in the broadband Internet
access business. The ratings also continue to broadly incorporate
the Company's high leverage, the mismatch between its local
currency revenues and its foreign currency denominated debt and
programming costs, and ongoing elevated capital expenditure
requirements to maintain its system, most of which will still
remain even after the anticipated restructuring," Moody's said.

Nonetheless, the ratings are supported by the Company's leading
position within the Brazilian pay-TV service provider space of
the Brazilian market; the large size, scope and relatively
advanced technological state of the Company's cable operations,
which serve the most prosperous and populous regions of Brazil;
and recent efforts to reduce its cost structure, which are
anticipated to contribute to more value creation over the longer
term.

The stable rating outlook reflects Moody's expectation that the
ratings will not need to be lowered further following completion
of the assumed restructuring scenario. A successful restructuring
of the Company's debt obligations could actually positively
impact the Company's ratings.

As of September 2002, Net had BRL1.394 billion (approximately
US$340 million) in total funded debt, with 29% being short term
in nature. EBITDA leverage was 5.3x and EBITDA interest coverage
was 1.3x. The Company generated negative retained cash flow
(EBITDA-capex-interest expense-taxes) of approximately R$20M in
the first nine months of 2002.

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

CONTACTS: Marcio Minoru Miyakava
          (5511) 5186-2811
          minoru@netservicos.com.br

          Lu Yuan Fang
          (5511) 5186-2637
          lfang@netservicos.com.br


VARIG: Business as Usual for Customers Flying On United Airlines
----------------------------------------------------------------
VARIG Brazilian Airlines reassured its customers traveling on
United Airlines that they can continue booking with complete
confidence that their travel plans will not be disrupted by
Monday's announcement that United has filed for protection under
Chapter 11 of the U.S. Bankruptcy code.

"It is business as usual for United Airlines and VARIG is fully
supportive of our Star Alliance partner United, and we have every
confidence in their ability to successfully restructure and later
emerge as an even stronger partner," said Vicente Cervo, VARIG's
Director - North America. "United's filing has no impact on
codeshare flights operated by United in cooperation with VARIG,"
he added.

Cervo pointed out that Chapter 11 filings by U.S. airlines allow
the carriers to operate their flight schedules without
disruptions, and United will continue to operate normally.

CONTACT:          VARIG Brazilian Airlines, Miami
                  Jeff Kriendler, 305/866-2115


VARIG: Moves To Restructure Debt With Fuel Distributor
------------------------------------------------------
The Brazilian airline company Varig, which is carrying a debt
load of US$764 million, is now in negotiations with BR
Distribuidora to restructure its debt with the fuel distributor,
reports O Globo. Varig's debt with BR is estimated at BRL140
million.

The report follows the recent agreement reached between the
ailing airline and Infraero to restructure part of its BRL340-
million debt with the airports management company. Varig is
currently working to reduce debts with the government.

Recently, Economist Roberto Gianetti da Fonseca said that Varig
would not survive beyond December if a restructuring plan is not
implemented soon. Mr. Fonseca is acting as mediator between Latin
America's biggest airline and its creditors.

The Varig group, which also includes the Rio Sul and Nordeste
regional airlines, generates more than US$3 billion per year,
which should serve to ensure smooth negotiations on its debt.

However, a negotiated agreement struck last month between the
administrative council and creditors was rejected by the Ruben
Berta Foundation, which controls 87% of the airline. Leaders of
the employee-controlled foundation disagreed with the new
repayment schedule, objecting to the plan's favoring certain
creditors over others. The foundationsaid they sought new loans
from the BNDES development bank instead.

The foundation's refusal to accept the deal prompted the
resignation of Varig's president and board of directors. Now,
creditors are pushing to expedite debt negotiations, while the
Brazilian government, which has offered to kick in US$300 million
to help resolve the matter, says the Company must restructure
itself before it will pour in any more money.

The Company's new interim president, Manuel Guedes, described the
situation at the Company as delicate but he stressed that the
US$900-million debt Varig struggled under early this year had
dropped to US$764 million by September and can be renegotiated.

Varig, Brazil's flagship airline, has a fleet of 100 planes,
employs 15,000 people and serves 110 domestic and 27
international destinations.

CONTACT:      VARIG (Viacao Aerea Rio-Grandense, S.A.)
              Rua 18 de Novembro No. 800, Sao Joao
              90240-040 Porto Alegre,
              Rio Grande do Sul, Brazil
              Phone: (51) 358-7039/7040
                     (51) 358-7010/7042
              Fax: +55-51-358-7001
              Home Page: www.varig.com.br/english/
              Contacts:
              Dorival Ramos Schultz, EVP Finance and CFO
              E-mail: dorival.schultz@varig.com.br

              Investor Relations:
              Av. Almirante Silvio de Noronha,
              n  365-Bloco "B" - s/458 / Centro
              Rio de Janeiro, Brazil

              KPMG Brazil
              Belo Horizonte
              Rua Paraba, 1122
              13th Floor
              30130-918 Belo Horizonte MG
              Telephone 55 (31) 3261 5444
              Telefax 55 (31) 3261 5151
                       or
              Brasilia
              SBS Quadra 2 BL A N 1
              Edificio Casa de Sao Paulo SL 502
              70078-900 Braslia - DF
              Telephone 55 (61) 223 2024
              Telefax 55 (61) 224 0473

              BAIN & CO
              Primary Contact: Wendy Miller
              Two Copley Place, Boston, MA 02116
              USA
              Phone: +1-617-572-2000
              Fax: +1-617-572-2461
              Email: miles.cook@bain.com
              URL: http://www.bain.com



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

ENAMI: VP Meets With Sonami Reps To Discuss Sale Implications
-------------------------------------------------------------
Jaime Perez de Arce, vice president at Chile's state minerals
company Enami, met with the representatives of the national
mining society Sonami last week to discuss the implications of
the sale of the Ventanas copper smelter-refinery to state copper
corporation Codelco.

The meeting, according to Business News Americas, is the latest
in a series of Enami efforts to gain the support of all
interested sectors for the sale of Ventanas. The move was
originally proposed in the country's congress as a way to deal
with Enami's US$300-million debt.

Sonami, led by president Hernan Hochschild and VP Alfredo Ovalle,
is seeking a guarantee on processing capacity allocated to small-
and medium-scale miners at the smelter.

Meanwhile, reports by the local press suggest that the planned
sale would result in significant changes to the Mejillones
smelter project.

According to mining minister Alfonso Dulanto, Ventanas would
become part of the planned smelting and refining project at
Codelco and "evidently this means that as a part of Codelco's
smelting and refining capacity, the Mejillones smelter project
may take on a different role", he said.

Ventanas' transfer to Codelco would have favorable effects, as it
would optimize operations at the two state entities, the minister
said.

CONTACT:  ENAMI (Empresa Nacional de Mineria)
          MacIver 459,
          Santiago, Chile
          Phone: 637 52 78
                 637 50 00
          Fax:   637 54 52
          Email: webmaster@enami.cl
          Home Page: www.enami.cl/
          Contact:
          Jorge Rodriguez Grossi, President



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

SEVEN SEAS: Granted Additional Extension of Cure Period
-------------------------------------------------------
Seven Seas Petroleum Inc. (Amex: SEV) announced Monday that in
connection with its continuing efforts to sell its producing
properties in Colombia, the Company has obtained an additional
extension of time to cure a potential default under its Note
Purchase and Loan Agreement with Chesapeake Energy Corporation
until the close of business on December 11, 2002. This extension
applies to the Company's previously announced failure to make the
$6,875,000 semiannual interest payment on its 12.5% $110 Million
Senior Subordinated Notes due November 15, 2002.

Seven Seas Petroleum Inc. is an independent oil and gas
exploration and production company operating in Colombia, South
America.

Statements regarding anticipated oil and gas production and other
oil and gas operating activities, including the costs and timing
of those activities, are "forward looking statements" within the
meaning of the Securities Litigation Reform Act. The statements
involve risks that could significantly impact Seven Seas
Petroleum Inc. These risks include, but are not limited to,
adverse general economic conditions, operating hazards, drilling
risks, inherent uncertainties in interpreting engineering and
geologic data, competition, reduced availability of drilling and
other well services, fluctuations in oil and gas prices and
prices for drilling and other well services and government
regulation and foreign political risks, as well as other risks
discussed in detail in the Seven Seas Petroleum Inc.'s filings
with the U.S. Securities and Exchange Commission.

CONTACT:  Seven Seas Petroleum Inc.
          Daniel Drum, Investor Relations
          Tel.: +1-713-622-8218


* Fitch Rates Colombia's Sovereign Bond 'BB'
--------------------------------------------
Fitch Ratings said Monday that it has assigned a 'BB' rating to
the Republic of Colombia's US$500 million global bond maturing
January 15, 2013. Fitch rates Colombia's long-term foreign
currency obligations 'BB' and local currency (Colombian peso)
obligations 'BBB-'.

On August 29, 2002, Fitch Ratings revised its Rating Outlook to
Negative from Stable on the Republic of Colombia's sovereign
ratings, citing a deterioration in external financing conditions
and rising government debt levels. Fitch is closely monitoring
whether legislation currency before congress will result in
substantive fiscal deficit reduction and a return of investor
confidence and economic growth.

External financing conditions for Latin American sovereigns
remain unfavorable. In this environment, concerns about
Colombia's security problems, muted growth prospects, and
widening fiscal deficits have increased its borrowing costs and
led to a weakening of its currency, raising Colombia's external
financing burden.

Colombia has sizable external financing needs of US$7.6 bln in
2003, or 42% of expected CXR (current external receipts, a broad
measure of exports), which compares unfavorably with most other
'BB'-rated sovereigns. Likewise, net public external debt to CXR
at 71% is higher than most 'BB'-rated sovereigns. In recent
years, the Colombian government has increased its use of external
sources of financing, and by May of this year, 27% of public debt
constituted externally sourced market debt. Given its sizable
external financing needs, Colombia remains vulnerable to a
further deterioration in market conditions emanating, for
example, from Brazil. Furthermore, with more than 50% of exports
directed to the US market, Colombia is exposed to the risk of
continued sluggish conditions there.

Persistent fiscal deficits and slow economic growth have
underpinned an increase in Colombia's gross general government
debt to an expected 53% of GDP at year end from 24% in 1998,
versus a median level for 'BB' peers of 45% in 2002. Net of
social security assets and debt held by other public sector
entities, government debt measures 47% of GDP. In order to
stabilize debt at current levels, authorities will have to seize
on their strong mandate from the May elections and enact
substantive fiscal and pension reform. Their agenda will be
especially challenging given the need for additional spending on
security and social programs in order to support social stability
and a more attractive environment for investment.

Fitch's analysis of debt dynamics indicates that a primary
surplus (before interest expenses) of 1% of GDP at the general
government level would be necessary over the medium term to
stabilize the debt-to-GDP ratio at current levels. A surplus of
this magnitude could engender a virtuous cycle of lower borrowing
costs, improved private sector confidence, currency stability and
stronger economic growth. Conversely, if the adjustment falls
short, debt would continue its rise, further weakening sovereign
creditworthiness.

Early information from authorities on next year's budget
assumptions suggest that it may meet the needed 1% primary
surplus, but considerable obstacles to its passage remain. Gross
public sector financing requirements for next year would still
exceed a substantial US$7 billion, indicating potential
refinancing risk.

Should the new administration succeed in passing a fiscal program
that supports medium-term debt sustainability while funding
necessary security and social program expenditures, and if new
policies engender greater private sector confidence that supports
both improved growth prospects and balance of payments stability,
then sovereign creditworthiness could stabilize. Alternatively,
if the budget falls short of the necessary primary surplus, or if
the government is unable to deliver improved security, the
ratings could be downgraded.


* Colombia May Get $2B IMF Accord In January
--------------------------------------------
International Monetary Fund Managing Director Horst Koehler said
that the lender expects to sign a US$2 billion standby loan
agreement with Colombia in January, reports Bloomberg News.
The agreement would replace a three-year accord which expires
later this month. The old accord gave the country access to as
much as US$2.7 billion, boosting investor confidence.

The new accord would enable the country to draw on the funds in
case of a balance of payments crisis.

Mr. Koehler has expressed his confidence that the basic
structures and decisions within the program will be adopted. He
added that the IMF's decision to make the money available would
lead to greater private investment in Colombia.

The country needs to limit inflation, narrow the fiscal deficit
and maintain a minimum level of reserves in order to avail of the
accord.

Some pension and tax reforms would also be required, according to
the report, adding that some of these reforms may have to undergo
popular referendum.

The government is seeking to pass tax, labor, and pension reforms
to allow the administration to lower the deficit in the future.
According to the government, reforms and budget cuts will lower
the country's fiscal deficit to 2.4 percent next year from an
estimated 4.2 percent this year.



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

BITAL: HSBC To Inject $800M In New Funds
----------------------------------------
Grupo Financiero Bital SA, Mexico's fifth largest bank, expects
to receive additional capital of US$800 million from HSBC
Holdings PLC after the UK-based owner board approved the planned
contribution. Mexican officials once estimated a lesser amount of
US$500 million that Bital needed to shore up its ailing finances
after acquiring a failed state-owned bank.

Some analysts said the higher amount is more appropriate in a
country where the banking system has collapsed twice in the last
20 years.

"In a region where the economic environment remains somewhat
fluid and uncertain there may be a real justification for a more
prudent level of capitalization," Barrington Pitt Miller, an
analyst at Banc of America Securities in London who gives HSBC
stock a `market perform' rating.

HSBC last month acquired more than 90% of Bital in a tender offer
worth US$1.14 billion. The world's second-biggest bank is
injecting capital into the Mexican bank in order to meet
government regulations for backing for loans and deposits.

CONTACT:  HSBC
          London
          Richard Beck or Adrian Russell, 44/20-7260-6757/8211

          New York
          Linda Stryker-Luftig, 212/525-3800

          Hong Kong SAR
          Gareth Hewett or Viginia Lo, 852/2822-4929/4930

          GF Bital
          Mexico City
          Hill & Knowlton
          Jose Antonio Tamayo or Juan A Lozano, 52/55-5729-4010


EL PASO: Sells Samalayuca II Power Plant Interest to GE
-------------------------------------------------------
El Paso Merchant Energy, a business unit of El Paso Corporation
(NYSE: EP), announced Monday it has entered into an agreement to
sell its 40-percent interest in the Samalayuca II power project
to an affiliate of GE Structured Finance, another partner in the
project. The 700-megawatt power plant is located near Ciudad
Juarez, Mexico. It is comprised of three natural gas-fired
combined-cycle units and provides electricity to the Comision
Federal de Electricidad for distribution to the state of
Chihuahua, Mexico.

The transaction is subject to customary approvals and is expected
to close by year-end. This sale is part of El Paso's initiative
to sell non-core assets, pay down debt, and further strengthen
the company's balance sheet. This transaction increases El Paso's
announced or completed asset sales to over $3.7 billion in 2002.

El Paso Corporation is the leading provider of natural gas
services and the largest pipeline company in North America. The
company has leading positions in natural gas production,
gathering and processing, and transmission, as well as liquefied
natural gas transport and receiving, petroleum logistics, power
generation, and merchant energy services. El Paso Corporation,
rich in assets and fully integrated across the natural gas value
chain, is committed to developing new supplies and technologies
to deliver energy. For more information, visit
http://www.elpaso.com.

CONTACT:  El Paso Corporation
          Communications and Government Affairs:
          Norma F. Dunn, Senior Vice President
          Office:  +1-713-420-3750
          Fax: +1-713-420-3632

          Investor Relations:
          Bruce L. Connery, Vice President
          Office:  +1-713-420-5855
          Fax: +1-713-420-4417


GRUPO TMM: Mexican Fiscal Court Denies TFM's VAT Claim
------------------------------------------------------
Grupo TMM, S.A. ("Grupo TMM") (NYSE: TMM) and Kansas City
Southern ("KCS") (NYSE: KSU), owners of the controlling interest
in TFM, S.A. de C.V. (TFM), announced that the upper chamber of
the Federal Tribunal of Fiscal and Administrative Justice (the
"Fiscal Court") has issued a ruling denying TFM's right to
receive a value added tax (VAT) refund from the Mexican Federal
Government. TFM has not yet received the decision of the Fiscal
Court and, therefore, cannot comment on the specific reasoning
behind the Fiscal Court's decision. The companies intend to
review the decision once it is served upon TFM, and to take all
legal steps necessary to protect the interests of the companies'
shareholders. Based on the advice of TFM's legal counsel, who
have carefully reviewed the prior favorable decision of the
appellate court, the partners remain confident of TFM's right
under Mexican law to receive the VAT refund.

Headquartered in Mexico City, Grupo TMM is Latin America's
largest multimodal transportation company. Through its branch
offices and network of subsidiary companies, Grupo TMM provides a
dynamic combination of ocean and land transportation services.
Grupo TMM also has a significant interest in Transportaci¢n
Ferroviaria Mexicana (TFM), which operates Mexico's Northeast
railway and carries over 40 percent of the country's rail cargo.

KCS is a transportation holding company that has railroad
investments in the United States, Mexico, and Panama. Its primary
holding is Kansas City Southern Railway. Headquartered in Kansas
City, Missouri, KCS serves customers in the central and south
central regions of the U.S. KCS's rail holdings and investments
are primary components of a NAFTA Railway system that links the
commercial and industrial centers of the United States, Canada,
and Mexico.


IUSACELL: Fails to Meet Requirements, Warns of NYSE Suspension
--------------------------------------------------------------
Iusacell, Mexico's third-largest mobile operator, admits it is
financially fragile. The company is not ruling out the
possibility of having its shares suspended from the New York
Stock Exchange, relates Mexico City daily El Universal.

The Company's ADRs on the NYSE have not fared well. At
US$0.67/ADR, they have fallen below the exchange's US$1/ADR
limit. According to Iusacell finance VP Russell Olson, while a
reverse stock split might provide a temporary solution, it would
not address the heart of the matter.

"There is a real possibility of leaving the New York Stock
Exchange," he said.

Meanwhile, the executive also announced that it is working to
restructure its debt in order to avert a default. Mr. Olson said
cash flow and revenues would allow the Company to meet debt
payments and complete forecasted capital expenditures of US$130
million next year and US$150 million for 2004.

According to Mr. Olson, the Company would announce the debt
restructuring process between January and February 2003. In
November, Iusacell retained US investment bank Morgan Stanley to
advise on debt restructuring alternatives.

INVESTOR CONTACTS:  Russell A. Olson
                    Chief Financial Officer
                    Tel: 011-5255-5109-5751
                    Email: russell.olson@iusacell.com.mx

                    Carlos J. Moctezuma
                    Manager, Investor Relations
                    Tel: 011-5255-5109-5780
                    Email: carlos.moctezuma@iusacell.com.mx



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

EDEGEL: Covers Debt Payments With $5.68M Short-Term Paper Issue
---------------------------------------------------------------
A financial analyst at Edegel revealed that the Peruvian
generator Edegel issued on the local market Friday PEN20 million
(US$5.68mn) worth of paper maturing in 270 days, relates Business
News Americas. The notes carry a 4.5% interest rate, Edegel
financial analyst Gloria Mena said. The proceeds of the sale will
be used to fund a range of existing obligations, including one
that came due Tuesday.

The placement was the first in a PEN50-million issue that Edegel
has registered with the Lima stock exchange. The next placement
will be in 1Q03, but the size of the placement still remains
unclear because the Company has not worked out its cash flow
needs yet, Mena said.

Earlier, Edegel proposed to sell to the Colombian ISA
(Interconexion Electrica S.A) part of its share in its power
transmission lines in order to pay off part of its debt with its
Chilean parent, Endesa Chile, which is looking to prop up its
ailing finances.

Endesa Chile is controlled by Enersis S.A., which revealed plans
this year to sell some of its assets to help ease debts of
US$10.8 billion. That sum includes a US$1.4 billion loan payment
to Enersis' parent, Spain's largest power group, Endesa. Edegel's
total current debt stands at US$275 million, while Endesa's
stands at US$4.5 billion.

According to Edegel Managing Director Jose Griso, the Company was
doing well despite economic woes across Latin America, posting
PEN18.6 million (US$5.1 million) in net profits for the third
quarter of 2002.

"Edegel has a phenomenal (financial) position and very low debt.
But we are a unit of another company and ... that company (Endesa
Chile) has a high debt level," he said.

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

CONTACT:  ENERSIS
          Investor Relations:
          Ricardo Alvial
          Chief Investments & Risks Officer of Enersis
          Email: ram@e.enersis.cl
          Phone: (562) 353-4682
          Contacts:
          Susana Rey, srm@e.enersis.cl
          Ximena Rivas, mxra@e.enersis.cl
          Pablo Lanyi-Grunfeldt, pll@e.enersis.cl



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

BWIA: UAL Bankruptcy May Threaten Alliance
------------------------------------------
BWIA Corporate Communications Director Clint Williams said
yesterday that the airline is worried about the bankruptcy of
United Airlines (UAL). United Airlines had filed for Chapter 11
bankruptcy protection early Monday morning, according to a report
from Reuters. UAL, which the news described as having the biggest
bankruptcy in the global airline industry, will continue to fly
worldwide while attempting to reorganize.

The Trinidad Guardian's Monday edition quoted Williams saying,
"It (the bankruptcy) could impact negatively on the airline's
domestic/US route."

BWIA had formed an alliance with UAL in July 2000 to complement
each other's operations. According to Williams, if UAL goes into
receivership, its destinations may be altered, and result to a
reduction in the number if flights.

UAL's strong foothold gave BWIA opportunity to increase its
presence in North America, under the alliance. In return, UAL
could extend its services into the Caribbean, benefiting from
BWIA's position as the region's largest carrier.

However, Williams said that BWIA was not able to take full
advantage of the code sharing after the US Federal Aviation
Administration downgraded Trinidad and Tobago to Category Two
status. The downgrade had limited the code sharing, causing BWIA
to lose US$900,000 in potential revenue, claims Williams.

As of now, BWIA would be keeping an eye on the developments of
UAL's bankruptcy, while seeking alliances with other airlines.

CONTACT:  UAL CORP.
          John Springer
          Manager-Investor Relation
          Email: cliff.hew@ual.com
          Tel (847) 700-7501
              or
          Solange Cobbs
          Investor Relations Assistant
          Email: solange.cobbs@ual.com
          Tel (847) 700-7365




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

PDVSA: Strike Prompts Moody's Securities Ratings Review
-------------------------------------------------------
Moody's Investors Service placed under review for possible
downgrade the credit ratings of the various securities linked to
Petroleos de Venezuela (PDVSA).

Under review are the following:

- PDVSA's Baa1 local currency and Ba1 foreign currency ratings;
- PDVSA Finance Ltd, rated Baa2;
- PDV America, Inc., rated Ba1; and
- Ratings for debt of the four heavy oil projects known as
Petrozuata, Cerro Negro, Sincor, and Hamaca, all rated Ba1.

The senior debt ratings of CITGO Petroleum Company, PDVSA's U.S.
based refining and marketing subsidiary, are confirmed at Baa2
with a negative outlook.

Moody's is reviewing the ratings in response to quickly evolving
developments in order to assess further impairments to PDVSA's
operations and debt servicing capabilities relative to the strike
and upheaval in Venezuela.

"Strikes by unions and most of the direct employees of PDVSA have
spread to operations throughout the country, that most of the
crude oil and product exports have ceased, and that production
and refining are running at much reduced rates. As inventories
build and storage capacity becomes full, the various production
and refining operations will have to be shut in, including the
four heavy oil projects, which have been functioning at near
normal rates for the past week," Moody's noted.

Moody's verified that PDVSA's treasury department continues to
function under contingency plans.

PDVSA Finance Ltd. has sufficient funds in a liquidity account in
New York to meet the next debt service payment due February 14,
2003.

All of the heavy oil projects operate separately from PDVSA,
including their treasury functions. Petrozuata and Cerro Negro,
both of which are operating as completed standalone projects,
have fully funded reserve accounts to meet their next debt
service payments on April 1, 2003 and on June 1, 2003,
respectively. Sincor and Hamaca have not achieved financial
completion and are still operating under sponsor guarantees. Both
have fully funded reserve accounts sufficient to meet their next
debt service payments on February 14, 2003.

"Duration of the current political crisis and the shut down of
PDVSA's operations are critical issues for the outcome of the
review," Moody's said.


PDVSA: Board Members Resign Hoping To End Worsening Strike
----------------------------------------------------------
Seven senior board members at Venezuela's state oil company PDVSA
handed in their resignations over the weekend, reports Business
News Americas. Those that resigned were vice presidents Jorge
Kamkoff and Jose Rafael Paz Calles, as well as directors Ludovico
Nicklas, Nelson Nava Hernandez, Arnoldo Rodriguez Ochoa, Hugo
Hernandez Rafalli and Clara Coro Fernandez.

In a statement, they said that their resignations were a possible
way of ending Venezuela's general strike, which has entered its
second week, and which has virtually shut down the country's
state-run oil company, reducing production by 40%, according to
industry sources.

Exports have halted, and gas shortages are being felt throughout
the country.



               ***********


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 Oona G. Oyangoren, 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 * * *