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

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

            Tuesday, January 23, 2001, Vol. 2, Issue 16

                             Headlines




A R G E N T I N A

ANDRE: To Slash 865 Jobs This Year


B R A Z I L

CAEMI: Interested Companies To Submit Proposals Until January
CESP PARANA: To Push Through Privatization by End-March or April
COPENE: Ultra To Increase Bid for Copene
GUIA LOCAL: On The Hunt For A New Partner
TELEMAR: Telecom Italia Wants 25 Percent Controlling Stake


C H I L E

GENER: Seeks Shareholder Approval On Argentine Asset Sale


M E X I C O

AEROMEXICO: Country's Travel Agencies Plan To File Lawsuit
BUFETE: To Sign Formal Agreement With Grupo Serbo
CINTRA: Tourism Industry Leaders Demand Immediate Breakup
HYSLAMEX: Dismayed over Government Price Cap on Natural Gas
ICA: Sells 11.75-Percent Of Stake In Airport Group
QUIMICA DEL REY: To Shut Down Magnesium Oxide Plant By February
UNEFON: Exceeds Subscriber Growth Target
UNEFON: Telefonica Denies Acquisition Rumors




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

ANDRE: To Slash 865 Jobs This Year
---------------------------------
Andr,, which last year shed nearly 600 jobs, announced plans to
cut another 865 this year through the sale of its Argentine
industrial operations and a reduction in the size of its head
office and international network, FT.com reported Monday. The
decision signals a belated recognition that the company no longer
has the financial resources to match its traditional grain trading
rivals.

Formerly one of the world's biggest grain traders, the company
said it would just concentrate on its core business of buying,
selling, financing and shipping agricultural commodities. In a
press conference held Friday last week, the company disclosed a
loss of $285 million in 1999 and another $209 million in 2000.

The 1999 deficit reflected heavy trading losses primarily in
Chicago, and last year's losses were mainly due to restructuring
charges following a review by Friedrich Sauerl"nder, who's been a
chief executive since October. He said that last year's planned 15
per cent reduction in staff had not gone deep enough and the
business risks had not been thoroughly analyzed. He further added
that the company had suffered from several years of unsatisfactory
performance and substantial one-time losses. "It had been living
off its reserves for quite some time", he said. "Without the
restructuring we all know that we cannot survive."



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

CAEMI: Interested Companies To Submit Proposals Until January
------------------------------------------------------------
Mining companies which have shown interest in Caemi will likely  
submit their proposals to the Frering brothers through late
January, South American Business Information said Friday. The
short list of suitors includes: CVRD (Companhia Vale do Rio Doce),
Rio Tinto (England), Anglo American (South Africa) and the Swedish
LKAB. The Frering brothers are expected to sell their 60 percent
equity stake in the company. The transaction will likely happen by
March since Mitsui, the Japanese trading company which owns the
other 40 percent of Caemi, has at least 30 days to exercise its
first right of refusal. However, market analysts believe that the
Japanese company will not exercise their right. Instead Mitsui may
sieze the opportunity to sell off some or all of its own shares.
Caemi also holds operating units in Brazil and has estimated
assets worth R$2.2 billion.


CESP PARANA: To Push Through Privatization by End-March or April
----------------------------------------------------------------
Sao Paulo Energy Secretariat advisor Virginia Murano confirmed in
a BNamericas.com report released Friday that the Sao Paulo state-
based generator Cesp Parana will push through with its
privatization by the end of March or April, as opposed to delaying
the process. According to Murano, there is no truth to the rumors
that there will be a delay in the privatization of Cesp because of
the privatization of Parana state integrated power company Copel.

The sale of Cesp, which was first scheduled for December 6 last
year, was delayed when a series of problems forced interested
companies to pull out from the negotiations. However, Murano
stressed that these problems have now been resolved.

In December, the minimum bid price was set at US$890 million
(R$1.7 billion). The state's privatization committee (PED) is
expected to decide in its next meeting the exact date of the
privatization, as well as a new minimum price. Among the companies
interested in the upcoming privatization are, US-based companies
Duke Energy, AES and Southern; France's EDF, Portugal's EDP,
Spain's Endesa, Belgium's Tractebel and Brazil's VCB.


COPENE: Ultra To Increase Bid for Copene
----------------------------------------
A source at Ultra says the local group is ready to raise its
original bid of US$822 million in the sale of Copene, Gazeta
Mercantil said Friday. As previously reported, the group would bid
for Copene in partnership with the Brazilian development bank
BNDES (Banco Nacional de Desenvolvimento Economico e Social).
According to analysts and Copene's business consultants, Ultra's
initial bid in December was "fairly reasonable."


GUIA LOCAL: On The Hunt For A New Partner
-----------------------------------------
Left by its main investors, TPI, information and services portal
Guia Local is now searching for a new investor, South American
Business Information said Friday. TPI acquired a 20-percent stake
in August 2000 and pledged to raise R$6.5 million by the end of
the period in exchange for the control of the portal. Guia
registered a R$250,000-turnover last year and to date, books
short-term debt of R$600,000. The company admits it is currently
facing a delicate situation.


TELEMAR: Telecom Italia Wants 25 Percent Controlling Stake
----------------------------------------------------------
Executives at Telecom Italia are now in Brazil to negotiate for a
25 percent stake in fixed-line phone operator Tele Norte Leste
Participacoes SA (Telemar), unidentified sources close to the
companies said in a Bloomberg report released Friday. Giulia
Nobili, the executive in charge of Telecom Italia's international
activities, is reportedly in the country to discuss the matter
with Telemar's controlling shareholders.

A possibile deal suggested has Telecom Italia selling its stake in
Brasil Telecom Participacoes SA to investment fund Opportunity
Asset Management and, in turn, the Italian operator would buy
Opportunity's stake in Telemar.



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

GENER: Seeks Shareholders' Approval On Argentine Asset Sale
-----------------------------------------------------------
Gener, Chile's second largest power producer, said in a statement
to the Santiago Stock Exchange that it would ask shareholders to
approve the sale of all its power assets in Argentina, Reuters
said Friday. "Gener's board has agreed to call a shareholders'
meeting on Feb. 5 at 1600 local (1900 GMT)," it said in a
statement. Gener's assets in Argentina include Central Puerto SA,
Interandes SA, Termoandes SA, and Hidroneuquen SA, a shareholder
of Hidroelectrica Piedra del Aguila SA.



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

AEROMEXICO: Country's Travel Agencies Plan To File Lawsuit
----------------------------------------------------------
Mexican travel agencies are planning to file a lawsuit against
leading Mexican airline Aeromexico, Reforma/Infolatina reported
Friday. The action is in response to the airline's decision to
reduce commissions it will pay on international and domestic
ticket sales. Reportedly, the Mexican travel agency association
launched a series of meetings in which they were reviewing a
variety of legal avenues available. However, the Aeromexico
believes, based on the fact that their contract reserves the right
of the airline to establish the ticket sales commissions it pays,
any lawsuit by the association has very little chance of success.


BUFETE: To Sign Formal Agreement With Grupo Serbo
-------------------------------------------------
Cash-strapped Mexican construction company Bufete appears set to
sign a formal agreement with Grupo Serbo, headed by Sergio
Bolanos, according to a report published Friday by
Reforma/Infolatina. The move will see Grupo Serbo take a stake in
the heavily indebted firm, with the assumption of all of Bufete's
liabilities. Bolanos will also be named chairman of the board.
According to estimates, Bufete's bank debts stand at $165 million.
As previously reported, discussions concerning the restructuring
of the company's debt will immediately follow after the signing of
the agreement.


CINTRA: Tourism Industry Leaders Demand Immediate Breakup
---------------------------------------------------------
The leaders of the Mexican tourism industry want the
administration of Vicente Fox to breakup state-owned airline
holding company Cintra immediately, Reforma/Infolatina reported
Friday. According to National Tourism Business Council President
Isaac Finkler, the existence of Cintra has led to high fares for
domestic flights, stunting the development of Mexico's tourism
industry and encouraging Mexican tourists to travel abroad rather
than inside their own country.

"There's an urgent need to bring domestic airfares into line with
international standards in order to retain consumption by domestic
travel," Finkler said.


HYSLAMEX: Dismayed over Government Price Cap on Natural Gas
-----------------------------------------------------------
The government's decision last week to cap the price of natural
gas at $4 per million British thermal units (BTUs) for the next
three years didn't seem to satisfy Mexico's Hyslamex. In a
Reforma/Infolatina report released Friday, the steelmaker said it
will not likely resume production any time soon at three other
plants in Monterrey and one in the central state of Puebla. They
want the administration of President Vicente fox to take further
action to ensure that the price of natural gas remains at a
reasonable level over the medium and long terms. In the mean time,
the company announced it does plan to restart operations at one
sponge-iron plant in the northern city of Monterrey.


ICA: Sells 11.75-Percent Of Stake In Airport Group
--------------------------------------------------
Empresas ICA, Mexico's largest construction company, announced it
has sold 11.75 percent of its stake in airport group Operadora
Mexicana de Aeropertos to Paris airports authority Aeroports de
Paris, Reuters said Friday. The transaction, which was valued at
$11.4 million, came after Aeroports de Paris exercised its option
to buy the portion of ICA's stake in the group. According to ICA,
proceeds from the transaction will be used to pay debt and for
other corporate uses.


QUIMICA DEL REY: To Shut Down Magnesium Oxide Plant By February
---------------------------------------------------------------
Quimica del Rey, a subsidiary of Industrias Penoles, is pushing
through with its plans to shut down its magnesium oxide plant next
month, Penoles chemicals division chief Alberto Ross Scheede said
in a Reforma/Infolatina report released Friday. The company is
taking this action despite the government's decision to cap the
price of natural gas in Mexico at $4 per million British thermal
units (BTUs) for the next three years. According to Ross, even if
the new price cap would afford important benefits to Mexican
industry as a whole, a price of $4 per million BTUs remained
prohibitive in the case of Quimica del Rey.


UNEFON: Exceeds Subscriber Growth Target
----------------------------------------
Unefon CEO Adrian Steckel announced that Unefon added 156,000 new
subscribers in its first year of operation, beating its target of
150,000 users by the end of the year, according to
Reforma/Infolatina report published Friday. Unefon currently
offers service in 12 cities and is now in the process of
establishing networks in six more cities. The company plans to
launch service in two metropolitan areas before the end of the
first quarter. Steckel, in a meeting with investors and analysts,
announced that the company's goal is to become the fastest-growing
mobile carrier in Mexico, pledging that it would continue to offer
affordable, high-quality services to its customers.


UNEFON: Telefonica Denies Acquisition Rumors
--------------------------------------------
An unnamed Telefonica spokesperson denied reports that the Spanish
company currently has any definite plans of acquiring a stake in
the Mexican mobile carrier Unefon, Reforma/Infolatina reported
Friday. The reports were based on recent public comments made by
major Unefon shareholder Ricardo Salinas Pliego, saying that the
two companies have resumed talks concerning the idea.

While Telefonica was believed to have withdrawn its proposal late
last year following its acquisition of Motorola's interests in a
number of Mexican mobile carriers, sources at Unefon's parent
company, Grupo Salinas, last week confirmed reports that
negotiations had resumed.




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 Janice Mendoza, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2746.

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