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

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

         Thursday, January 25, 2001, Vol. 2, Issue 18

                          Headlines



A R G E N T I N A

HIPARSA: Central Government Revises Bidding Rules


B R A Z I L

ERITMO.COM: Ceases Brazilian Unit


C H I L E

ESSAM/ESSAR: Government To Decide Fate Of Two Utilities


E C U A D O R

ANDINATEL/PACIFICTEL: Starts Privatization Process


M E X I C O

ALO.COM: Deal With New Strategic Partner Nears End
BANCRECER: Two More Foreign Firms Express Interest
BUFETE: Creditors Sign Agreement With Bolanos
CINTRA: Chief Executive Denies Allegations
CONFIA BANK: Citibank Admits 75 Percent Integrated So Far
CONVERSE: To Close Mexican Plant March 31
GRUPO SIDEK: Signs Agreement To Sell First Group Of Hotels
HYSLAMEX: Cash Flow and Annual Sales Volume Down In 2000
UNEFON: To Continue Talks With Foreign Suitors
VITRO: Anticipates Preliminary FY 2000 Figures


P E R U

LA PAMPILLA: Government Keen On Finalizing Sale 1H01


V E N E Z U E L A

MAVESA: Polar To Acquire Via Public Offering


     - - - - -


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

HIPARSA: Central Government Revises Bidding Rules
--------------------------------------------------------
Company Chairman Ernesto Urcera told BNamericas.com in a report
released Tuesday that the bidding rules for the sale of iron ore
miner Hiparsa are undergoing final revision by the central
government. Price Waterhouse Cooper and Ambiente y Mineria
(Aymsa) are drawing up bidding rules, and several companies have
already shown an interest in the auction.

"The minimum price in the auction is going to be very small, but
I don't want to reveal what it is so as not to upset potential
bidders," Urcera said. The company that wins the operating
concession will be expected to revive the Hiparsa complex. The
successful bidder will also have the opportunity to buy Hiparsa
outright at a later date. "The government is not interested in
finding partners or in holding onto anything. It is just
interested in reviving the complex and creating jobs in a region
that needs them badly," Urcera added.



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

ERITMO.COM: Ceases Brazilian Unit
---------------------------------
Latin music site Eritmo.com announced it has phased out its
Brazilian unit, which it operated since 1997, South American
Business Information said Tuesday. The Brazilian unit, which
demanded US$1.6 million, was the first to shut down and dismiss
23 employees. At present, the company is seeking partners to help
it continue operations in Mexico, Los Angeles, Puerto Rico,
Venezuela, Argentina and Spain.



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

ESSAM/ESSAR: Government To Decide Fate Of Two Utilities
-------------------------------------------------------
The final study of the Region VII waterworks company Essam could
be submitted to the economy minister Jose de Gregorio next week
after a thorough deliberation from the Chilean state business
administrator SAE, BNamericas.com said Tuesday. The government
will then decide Essam's fate. Although the content of the Essam
study has not been revealed, observers say it is highly likely to
recommend the inclusion of private capital.

The presidency already has a report that recommends the
incorporation of private capital to finance investment needs of  
Region IX utility Essar.

Essam will invest US$17.1 million this year with US$11.4 million
channeled into wastewater treatment. Essar plans to invest
US$15.3 million, designating US$4.1 million in sewage treatment.
Several companies have announced publicly they would be
interested in participating in an eventual auction for the two
regional utilities.



=============
E C U A D O R
=============

ANDINATEL/PACIFICTEL: Starts Privatization Process
--------------------------------------------------
Representatives of state-owned telephone companies Andinatel and
Pacifictel met with the Ecuadorian government to finalizing the
opening of the domestic telecoms market, reported South American
Business Information Tuesday. This will also mark the beginning
of the privatization process of the two companies. Breaking up  
the monopoly is seen crucial to the development of the telecoms
industry and services, according to representatives of the
process.




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

ALO.COM: Deal With New Strategic Partner Nears End
--------------------------------------------------
Mexican web portal Alo.com is about to reach an agreement with a
new strategic partner, Reforma/Infolatina said Tuesday. Word on
the street says this strategic partner is a Chilean media
company. Alo.com, with mounting pressures from BBVA-Bancomer
forcing it to make good on long-standing debts, is reportedly
planning to produce content in Mexico and have it distributed in
South America. Meanwhile, the web portal continues its
negotiations with Mexican radio broadcaster Radio 13 and hopes to
take a majority stake in the company.


BANCRECER: Two More Foreign Firms Express Interest
--------------------------------------------------
Dresdner Bank and Allianz are not the only foreign institutions
likely to bid for the remaining 51-percent in the government-
intervened Bancrecer's pension fund manager (Afore) when Mexican
bank bailout agency IPAB puts it on the block in several weeks'
time. In a Reforma/Infolatina report released Tuesday, two more
foreign-owned financial firms expressed interest in the deal,
namely, U.S.-based Citibank and Prudential Apolo. Dresdner Bank
and Allianz together hold a 49-percent stake in Afore.

In a related report, both Citibank and Grupo Financiero Inbursa
are also interested in bidding for Bancrecer bank, which will go
on sale at the same time as the pension fund manager.


BUFETE: Creditors Sign Agreement With Bolanos
---------------------------------------------
The creditors of Mexican construction company Bufete announced
they have signed an agreement with Grupo Serbo's Sergio Bolanos,
Reforma/Infolatina reported Tuesday. As a result, Bolanos will
take control of the cash-strapped Mexican firm. According to the
deal, Serbo will take an 80-percent stake.

Report has it that Serbo received an 80-million-dollar discount
on Bufete's bank debt, which is 50 percent of the total it owes
to banks. According to reports, Bufete's remaining post-discount  
80 million dollars in bank debt will be restructured to a term
greater than six years.


CINTRA: Chief Executive Denies Allegations
------------------------------------------
Juan Diez Canedo, CEO of government-owned Mexican airline holding
company Cintra, earlier this week, denied allegations that the
company is a monopoly, reported Reforma/Infolatina Tuesday.
According to him, average airfares charged by Cintra-controlled
airlines are comparable with airfares throughout North America.
The fact that Cintra's costs are higher than the industry
standard is evidence that the company does not enjoy monopoly
conditions, Diez explained.


CONFIA BANK: Citibank Admits 75 Percent Integrated So Far
---------------------------------------------------------
Citibank Mexico admitted that so far, it has integrated 75
percent of the failed local bank Confia, which it acquired in
August 1997, Reuters said Tuesday. "The idea is to finish it (the
merger) this year," Julio de Quesada, Citibank Mexico Chief
Executive Officer, said in a news conference. According to him,
Citibank was satisfied with the progress made in integrating the
two groups, although some analysts have questioned the efficiency
of the fusion process, given the amount of time it has taken to
date.

Confia, which authorities intervened after it got mixed up in a
fraud scandal, is located in the northern city of Monterrey. It
had 281 branches in Mexico and was bought by Citibank for nearly
$250 million. Confia had received government funding to help it
clean up its balance sheet.


CONVERSE: To Close Mexican Plant March 31
-----------------------------------------
Converse, which filed for bankruptcy protection from creditors
under Chapter 11 of the U.S. Bankruptcy Code earlier this week,
said it is planning to close its plant in Mexico. According to a
Reforma/Infolatina report released Tuesday, the plant, which is
located in the northern part of Mexico, is scheduled for closure
this March 31.

The company, in its bankruptcy filing in the District of
Delaware, listed assets of about $202 million and liabilities of
about $226 million. Converse creditors include First Union Corp.
(FTU.N) ($74.3 million), Chinese marketer Yue Yuen ($14 million),
University of Louisville basketball coach Denny Crum ($652,000)
and former NBA rebound champion Dennis Rodman ($400,000). The
almost-100-year-old company last year for a fifth-consecutive
year suffered losses, lower sales and growing liabilities.


GRUPO SIDEK: Signs Agreement To Sell First Group Of Hotels
----------------------------------------------------------
Grupo Sidek, S.A. de C.V. (OTC Bulletin Board: GPSAY) (OTC
Bulletin Board: GPSBY) ("Sidek") and Grupo Situr, S.A. de C.V.
("Situr") announced that the agreement to purchase the
controlling interest of the first package of hotels was signed.
The winner was Steadfast Properties who will buy through its
subsidiary AMX Resort Holdings, LLC. This transaction is expected
to close during the month of March, after the accomplishment of
all the conditions established in the purchase agreements.


HYSLAMEX: Cash Flow and Annual Sales Volume Down In 2000
--------------------------------------------------------
Mexican steelmaker Hyslamex in 2000, posted cash flow of $253
million, a 14-percent drop from what was recorded in 1999; and
annual sales volume of 2.7 million metric tons, a 4-percent
decline from the year earlier. In an El Economista/Infolatina
report released Tuesday, the company sent a statement to the
Mexican Stock Exchange saying that the deterioration in its
financial results began in the second half of last year.

Unfavorable factors cited for the revenue deterioration are:

     - A drop in steel prices in the United States;

     - An across-the-board slump in the company's major export
markets;

     - The relative strength of the peso, which limited the
company's ability to engage in price competition with foreign
rivals; and

     - A 400-percent increase in the price of natural gas


UNEFON: To Continue Talks With Foreign Suitors
----------------------------------------------
Mexican mobile telephone carrier Unefon announced it would resume
talks with several foreign suitors over the sale of a 49 percent
equity stake, reported Reforma/Infolatina Tuesday. This week,
Unefon top executive Adrian Steckel, together with his team, will
meet with AT&T representatives from Mexican long-distance carrier
Alestra. Next week, they will meet with Joe Grenuk, Vice-
President of Bell South.

According to reports, the majority shareholders of Unefon do not
plan to make a deal unless Telmex conducts IPOs in Mexico and
abroad for mobile spin-off American Movil (Telcel). They want to
know how much Telmex's former mobile division is worth on its own
before agreeing on a price for nearly half of Unefon.

Majority shareholders of Unefon include TV Azteca's Ricardo
Salinas Pliego, and Grupo Casa Saba's Moises Saba.


VITRO: Anticipates Preliminary FY 2000 Figures
----------------------------------------------
Vitro, S.A. de C.V. (BMV: VITRO A; NYSE: VTO) today announced the
most significant unaudited preliminary figures for the twelve-
month period ended December 31, 2000.

Consolidated net sales for fiscal 2000 were Ps$27,999 million,
flat when compared with Ps$27,906 million for 1999. In U.S.
dollars, consolidated net sales for the period rose year-over-
year by 8.7 percent to US$2,857million. Main drivers of sales
were within the businesses of Flat Glass, Acros-Whirlpool and
Crisa.

For the year, the Company posted consolidated EBIT of Ps$3,393
million and EBITDA of Ps$5,476 million, representing a year-over-
year 19.2 percent and 13.3 percent decline, respectively. In U.S.
dollars, consolidated EBIT and EBITDA for fiscal 2000 were US$345
million and US$557 million, respectively, a decline of 11.5
percent and 4.8 percent when compared with the previous year.
External factors such as the year-over-year increase in energy
costs and the strengthening of the peso during 2000 contributed
to the decline in operating and EBITDA margins.

An overview of the operating results for each of the five
business units follows.

--Flat Glass

Sales grew mainly driven by strong volume growth, particularly in
the construction industry, and by the acquisition of Harding
Glass. The decline in EBIT resulted from a combination of higher
year-over-year energy costs, a stronger peso, and additional
selling, general and administrative expenses and non-recurrent
charges, such as severance payments, in connection with the
Harding acquisition.



                          January - December

                 Constant Pesos            Nominal Dollars
                2000     1999     %       2000   1999   %

Con. N. Sales   9,745    9,216    5.7%    996    877    13.6%
EBIT            1,410    1,689  -16.5%    143    157    -8.5%   
EBITDA          1,949    2,208  -11.8%    198    205    -3.2%


--Glass Containers

Consolidated net sales declined mostly as a result of product
substitution in the soft drink segment, overcapacity at one of
the Company's vertically integrated beer customers and the
strength of the peso in the period. The decline in EBIT resulted
from price pressure in the soft drink and food segments, steep
increases in natural gas costs and some packaging materials, as
well as the stronger peso.

                          January - December

                 Constant Pesos            Nominal Dollars
                2000     1999     %       2000   1999   %

Con. N. Sales   7,295    7,822   -6.7%    745    742     0.3%
EBIT              877    1,106  -20.7%     89    103   -13.8%  
EBITDA          1,657    1,958  -15.3%    169    182    -7.6%


--Household Appliances

During the period, the Household Appliances business enjoyed an
expansion of its market share as a result of an improvement in
sales in terms of volume - nearly 17 percent - which outpaced
that of the entire sector - close to 14 percent. The decline of
EBIT in peso terms resulted mainly from stronger price
competition generated by lower priced imports, especially in the
refrigerator segment.

                      January - December

                 Constant Pesos            Nominal Dollars
                2000     1999     %       2000   1999   %

Con. N. Sales   5,541    5,351    3.5%    564    495    14.1%
EBIT              589      608   -3.2%     60     57     5.8%
EBITDA            844      874   -3.4%     86     81     6.1%


--Diverse Industries

The decline in sales reflects the December 1999 divestiture of
the Silicates operation, which represented 10 percent of the
business' net sales. At the same time, the business showed
improvement in export volumes and stronger sales, particularly
within the Plastic and Aluminum operations. EBIT declined as a
result of the strength of the peso. The increase in natural gas
prices affected particularly the soda ash and fiber glass
operations.

                      January - December

                 Constant Pesos            Nominal Dollars
                2000     1999     %       2000   1999   %

Con. N. Sales   3,018    3,320   -9.1%    307    307    -0.2%
EBIT              426      597  -28.6%     43     54   -20.5%
EBITDA            651      836  -22.1%     66     76   -13.5%


--Glassware

Sales for the year improved mainly as a result of the transfer of
production of some of Libbey's Canadian operations, which was
completed in 2000, special promotions of premium products related
to the summer Olympics, and volume increase, particularly in the
domestic markets. The decline in margins was mainly the result of
higher energy and packaging materials costs and the impact of a
strong peso on exports.

                      January - December

                 Constant Pesos            Nominal Dollars
                2000     1999     %       2000   1999   %

Con. N. Sales   2,282    2,149    6.2%    233    201    15.6%
EBIT              439      474   -7.3%     45     44     1.3%
EBITDA            637      639   -0.4%     65     60     9.2%


All figures provided in this announcement are in accordance with
Generally Accepted Accounting Principles in Mexico. All figures
are preliminary, unaudited and are presented in constant Mexican
pesos as of December 31, 2000. Dollar figures are in nominal US
dollars and are obtained by dividing nominal pesos for each month
by the exchange rate as of the end of that month.


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P E R U
=======

LA PAMPILLA: Government Keen On Finalizing Sale 1H01
----------------------------------------------------
A source connected to the Peruvian government revealed in a
BNamericas.com report published Tuesday that it is eager to
finalize sale of a 31-percent stake in the La Pampilla refinery
(Relapasa) in the first half of this year. The Lima Stock
Exchange (BVL) will host the sale, to be made in a single block
without restrictions on a single buyer picking up the entire
position. Local investment bank Banco Weise and JP Morgan have
worked on asset valuation and the sale model.

The sale was originally scheduled for the second half of last
year. However, legal problems brought about by the restructuring
of Relapasa's statutes to comply with Peru's new law for
mercantile societies delayed the date.



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


MAVESA: Polar To Acquire Via Public Offering
--------------------------------------------
Polar confirmed it would acquire 100 percent of the major food
processing firm Mavesa via a public offer, South American
Business Information reported Tuesday. Both companies have
already agreed on the terms of the public offer, which must be
approved to the securities & exchange commission CNV. The said
transaction, which is to be undertaken by Primor Inversiones that
manages Polar's food processing subsidiary Primor Alimentos, is
estimated at $500 million. From the necessary funds to acquire
Mavesa, 60 percent will come from Polar shareholders and 40
percent through a loan from Citibank and CAF guaranteed by the
brewery Cervecerias Polar.



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

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