TCRLA_Public/010126.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

         Friday, January 26, 2001, Vol. 2, Issue 19



LIAT LTD: Strikes Deal With Government Over Pay Arrangements


AMBEV: Salomon Begins With Outperform Rating
BOMBRIL: Clorox To Half of Premier Household Products Business
COSIPA FURNACE: Reaches Full Production Ahead Of Schedule
CVRD: S&P Raises Ratings on CVRD Finance Uninsured Exp Sec Nts
EMBRATEL: Announces that Priority is End-to-End Business


ENTEL: Selects Micromuse's Netcool Suite


RADIO 13: Denies In Talks With Regarding Acquisition
SERFIN: Citibank Mexico Looks To Hire Top Executive

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LIAT LTD: Strikes Deal With Government Over Pay Arrangements
Cash-strapped regional airline LIAT Ltd. announced it is paying
landing and navigational fees to regional governments after
striking a deal to reschedule long-outstanding debts, Caribbean
News Agency reported Tuesday.

Gary Cullen, LIAT's Chief Executive Officer, explained that each
of the shareholder governments was told last summer that the
airline was not in a position to pay its debt. The mounting
liability has accumulated since 1995. Instead, a payment system
would remain in place until the financial restructuring of the
company was addressed, he said.

In addition, the chief denied a recent report in the Antigua Sun
newspaper that, due to debt problems, one of LIAT's planes was
about to be seized by authorities on the British Virgin Island of
Tortola. He attributed that report to calculated rumor-mongering
by LIAT's competitors.

"That's without any foundation whatsoever and Tortola in fact is
encouraging us to improve our services and add more services.
There is a lot of rumor flying around, most of it extremely
negative about LIAT, and most of it is obviously engineered by
our competitors who are doing everything possible to undermine
the public's confidence in LIAT," Cullen explained.


AMBEV: Salomon Begins With Outperform Rating
Salomon Smith Barney began coverage of Companhia de Bebidas das
Americas (Ambev) with an outperform rating and a 12-month target
price of $30, implying an upside potential of 14 percent, Reuters
said Wednesday. Salomon expects AmBev's 2001 earnings before
interest, taxes, depreciation and amortization (EBITDA) to total
$895 million, which is 25 percent higher than last year. EBITDA
for 2002 is projected at $1.06 billion.

Ambev is the result of the recent union of Brazil's top brewers
Brahma and Antarctica.

BOMBRIL: Clorox To Half of Premier Household Products Business
The Clorox Company (NYSE:CLX) (PSE:CLX) today announced it has
entered into an agreement to acquire 50 percent of the leading
cleaning utensils and household cleaners business in Brazil.

"This transaction is a major step in expanding Clorox's business
in Latin America, which is a key element of our long-term growth
strategy," said Clorox Chairman and CEO Craig Sullivan. "It
provides Clorox with market-leading brands in the largest
category in the largest country in Latin America."

Under the terms of the agreement, Clorox will pay $200 million to
acquire, among other rights, a 50 percent stake in Detergentes
Bombril S.A., a new venture to be formed by Bombril S.A. and
Clorox. Bombril's assets that will transfer to the joint venture
include trademarks, three production facilities and approximately
1,900 employees. Bombril S.A., which was founded more than 50
years ago, had net customer sales of about $205 million in
calendar year 2000.

With its Bom Bril brand of steel wool, Bombril holds a strong No.
1 market position in cleaning utensils in Brazil, which is the
largest cleaning products category in that country and in Latin
America overall. Bombril also holds the No. 1 position in
disinfectant cleaners with Pinho Bril and other brands. In
addition, the Bombril portfolio includes other household
cleaners, fabric softeners and dishwashing liquid. Bombril also
has one of the most extensive distribution networks in Brazil.

The transaction is subject to various closing conditions,
including confirmatory due diligence and execution of a
shareholders' agreement that, among other things, will provide
for Clorox's role in the management of the joint venture. The
companies expect to finalize the transaction in May 2001. based
on preliminary estimates, the transaction would have a positive
impact on Clorox's fiscal 2001 cash earnings while diluting
earnings per share by about one cent.

"This agreement sets the stage for Clorox to gain the necessary
critical mass to compete effectively and efficiently in the vast
Brazilian market," Sullivan said. "Bom Bril is a 'megabrand' that
is well-known throughout Brazil, with market-leading positions in
categories that Clorox knows well -- steel wool, household
cleaners and disinfectants. The Bombril business has long been
profitable and brings strong management and a solid
infrastructure, including manufacturing facilities, an extensive
distribution network, systems and processes. I am confident
Clorox's experienced management team in Latin America will
successfully leverage this venture to accelerate the growth of
our Latin America platform."

This transaction follows Clorox's acquisition of Bon Bril
cleaning utensils in Colombia, Venezuela and Peru in March 2000.
As a result, Clorox will have rights to the Bom Bril and Bon Bril
brand names throughout most of South America and will be the
cleaning utensils category leader in the region. Among the other
products Clorox manufactures and markets in Brazil are Clorox
bleach, X-14 cleaners and SBP insecticides.

The Clorox Company is a $4 billion multinational manufacturer and
marketer of household products and products institutional
markets. Clorox has growing its business outside the United
States from 7 percent of sales eight years ago to 19 percent or
$771 million, in fiscal 2000. Latin America is the company's
priority region for international investment in the near term.

CESP: Government To Privatize 1H01
The Sao Paulo state government decided to have Companhia
Energetica de Sao Paulo (Cesp) sold in the first half of this
year, ahead of the privatization of Companhia Paranaense de
Energia (Copel), Brazil Financial Wire reported Wednesday. Copel,
the Paran  electric company, is expected to be privatized the
latter half of this year.

The Sao Paulo government is awaiting permission from the central
bank to raise $500 million on behalf of Cesp in order to extend
the company's short-term debt. According to Mauro Arce, the state
energy secretary, the minimum asking price for a controlling
stake in Cesp is currently set at R$ 1.739 billion, but this
amount should be revised following the roll-over of the utility's
maturing debts.

COSIPA FURNACE: Reaches Full Production Ahead Of Schedule
Luiza Mello, Cosipa spokesperson, said in a report
published Wednesday that the revamped No. 1 blast furnace at the
flat-steel company has reached full production about a month
ahead of schedule. With the efficiency and productivity gains
from new technology introduced during the revamping, the
furnace's capacity is now 1.6Mtpy of pig iron, compared to the
previous 1.4Mtpy.

"We felt confident that the ramping up [started in November]
would go well. And it did. There were no accidents or problems.
We hope the same will happen for blast furnace No. 2," Mello

Furnace No. 2 will be shutdown from June to September and be back
in November at a capacity of 2.9Mtpy, a 31 percent increase over
its previous production, Mello informed.

The updating and routine maintenance of the furnaces is part of a
US$400 million investment, which includes a new oxygen plant, new
continuous casting machine, and US$45 million of environmental
projects. The expansion and revamping follows a company
restructuring two years ago.

CVRD: S&P Raises Ratings on CVRD Finance Uninsured Exp Sec Nts
Standard & Poor's today raised its ratings on CVRD Finance Ltd.'s
uninsured future flow export securitization notes series 2000-1
due 2007 and series 2000-3 due 2010 to triple-'B' from triple-
'B'-minus. At the same time, Standard & Poor's affirmed its
triple-'A' rating on CVRD Finance Ltd.'s MBIA Insurance Corp.
(triple-'A' insurer financial strength rating) insured future
flow export notes series 2000-2 due 2007.
The rating action on the uninsured notes follows the upgrades on
Jan. 3, 2001 of the local currency rating of the Federative
Republic of Brazil to double-'B'-plus from double-'B' and of the
foreign currency rating to double-'B'-minus from single-'B'-plus.
The ratings upgrades are based on:

-- The strength of Companhia Vale do Rio Doce (CVRD), which is
headquartered in Brazil, as a major global producer and exporter
of iron ore and pellets;

-- Sufficient levels of overcollateralization, which support
higher ratings;

-- The structural enhancements in place to mitigate sovereign
risk, including off-shore accounts and the true sale of
receivables generated from the sale of iron ore and pellets to
CVRD Finance; and

-- The strength of the legal structure.

CVRD Finance is a bankruptcy-remote limited liability company.
Standard & Poor's expects that in the unlikely event of a default
by CVRD on its local currency debt, existing and future
receivables generated from the sale of iron exports to certain
designated customers would not be considered to be part of the
bankruptcy estate of CVRD. Given CVRD's leading position in the
global iron ore market and the strong overcollateralization
levels, it is likely that even if CVRD is filed into bankruptcy,
the company would continue to operate and would be able to
generate a sufficient amount of receivables to service the notes
in a timely manner.

CVRD is the largest producer and exporter of iron ore in the
world, with a 22% market share (including subsidiaries and joint
ventures) of the sea-borne iron ore trade. The company operates
two separate iron ore complexes with total reserves of
approximately 24.9 billion metric tons. Besides iron ore and
pellets, which accounted for 54% of its consolidated revenues in
1999, CVRD also has diversified operations in transportation,
nonferrous minerals, aluminum, forest products, and steel.

CVRD benefits from its leading position in the global iron ore
market as the largest integrated supplier of the product in the
world, world-class and prolific iron ore reserves, a relatively
diversified product mix, and a sound financial profile, all of
which provide relative insulation against potentially adverse
macroeconomic conditions in the country.

However, low geographic diversification of its mining assets,
which are all based in Brazil, and the risk inherent in operating
in Brazil limit the company's financial flexibility when compared
with that of companies operating in more stable economies,
Standard & Poor's said.


CVRD Finance Ltd.                                Rating
Series                                        To         From
Uninsured future flow export securitization
notes series 2000-1 due 2007                  BBB        BBB-
Uninsured future flow export securitization
notes series 2000-3 due 2010                  BBB        BBB-


CVRD Finance Ltd.
Series                                           Rating
MBIA Insurance Corp. insured future
flow export notes series 2000-2 due 2007         AAA

EMBRATEL: Announces that Priority is End-to-End Business
Embratel Participacoes S.A. (Embratel Participacoes or the
"Company") (NYSE: EMT) (BOVESPA: EBTP3, EBTP4), the Company that
holds 98.8 percent of Empresa Brasileira de Telecomunicacoes S.A.
("Embratel"), today announced that it will not be submitting bids
for the PCS licenses currently being auctioned in Brazil, to
focus on the provision of end-to-end services, building upon its
current strength in the business, data and internet markets.

Embratel's strategy is to leverage existing strengths and invest
to ensure its ability to provide local services as well as
continuing to add value to its customers from January 2002

Since 1998, Embratel has invested over R$700 million in local
infrastructure, resulting in the largest alternative network to
the local telcos. Embratel has over 600 route km and 50,000 fiber
km of metropolitan fiber, including urban rings and more than 14
thousand buildings connected via fiber and digital radio. By
2002, we will have invested R$2 to R$3 billion.

A large portion of Embratel's investment this year will be
dedicated to local access. Embratel's metropolitan network is
being extended to other major cities like Campinas, Vitoria,
Florianopolis, other mid-size cities in the state of Sao Paulo
and Brazil. Local deployment will use different technologies,
including fiber, fixed-wireless and digital links to ensure high
quality and efficient installation and quick to market. Embratel
will also invest to virtually double network points of presence
and will actively look for opportunities to participate in
building centric services. Compliance with our 2003
universalization obligations for network and other services will
be completed by the end of this year.

The company is confident that Anatel will enable unbundling of
local facilities, thereby promoting real competition at the local
level. Once rules are specified, we will be able to define the
level of investments.

With this focus in mind, Embratel has chosen not to bid for
licenses in today's process in Brazil. Over the past six months,
the company analyzed this opportunity very carefully in terms of
economics, synergies and potential to share risks through
partnerships. The rationale for not bidding is based on the
following considerations:

(1) Embratel has chosen to deploy capital in local business at
this time;

(2) given the current funding environment, the optimal situation
may have been to share risks through partnering and the
opportunities were limited;

(3) the low probability of obtaining a national license at a
price that would earn adequate returns for shareholders.

Embratel believes it will benefit by maintaining its strategic
and financial flexibility as this dynamic market evolves. The
company will continue to closely analyze investment opportunities
in the mobile and other sectors.

Embratel is best positioned to serve new demand from the winners
in the PCS bid who will need nationwide backbone, infrastructure,
and customer support services. In addition, Embratel is ready to
distribute mobile services using its nationwide market presence.

Embratel will continue to provide a wide variety of data
services, Internet, International and Basic Telecommunication
services in the Brazilian market as well as proceeding the
expansion to the South American market, leveraging and
complementing WorldCom activities and assets.


ENTEL: Selects Micromuse's Netcool Suite
Netcool(R)/ISMs(TM)and Netcool(R)/Reporter(TM) Enhance Customer
Service Level Agreements For Largest Internet Services Provider
in Chile

Micromuse Inc. (Nasdaq:MUSE), the leading provider of realtime
fault management and service assurance software, today announced
that ENTEL S.A. has selected Netcool(R) applications to provide
realtime monitoring of service availability and response times
for its rapidly expanding Internet network.

Entel provides a complete suite of Internet communications
services in targeted markets throughout Chile.

"As the Chilean telco market space becomes more competitive, it
was important for Entel to be able to monitor our customer's
network service levels and allow them to understand the services
they are offering from the user's perspective," said Cesar
Abuauad, Director of Internet Services of Entel, Chile. "Our
customers expect us to provide the best products on the market to
help them offer higher levels of service to their own customers.
Netcool's rapid deployment and highly scaleable service assurance
capabilities are helping us become more proactive when it comes
to meeting our customers needs."

In addition to Netcool/OMNIbus(TM), Micromuse's flagship
application, Entel will also deploy Netcool/Internet Service
Monitors(TM) (Netcool/ISMs) to provide realtime Internet service
availability and response time information for 18 different
Internet protocols and applications including RADIUS, DNS, HTTP
and FTP. Netcool/ISMs help commercial and non-commercial Internet
service providers improve the manageability of their Internet
connections, corporate intranets, and extranets by regularly
testing each service at user-defined intervals. The data provided
by Netcool/ISMs can be easily graphed against pre-defined
service-level metrics to help Entel obtain realtime and
historical evidence of service levels.

Once deployed, the Netcool applications will help Entel monitor
its Internet Access Services simulating customers accessing the
Internet through either analog and ISDN modems or dedicated
connections (leased line, Frame Relay, etc.). Netcool/ISMs will
be distributed in different cities across the country to
determine if the same Quality of Service (QoS) is provided to any

"As Latin American Telco markets have deregulated, providers have
had to deal with the shift from being a monopoly to competing for
customers," said Adrian Rowland, Micromuse's Director Internet
Strategies. "They need business tools to help them understand the
service levels they are providing their clients. Micromuse's
Netcool suite gives them information as to which customers are
affected and which services are being affected, precisely where
the problem is located and then it suggests the best way to fix

Additionally, Entel selected Netcool/Reporter(TM), a highly
flexible reporting tool, to provide internal users, such as
operational, marketing and executives, with varied information
views in order to help improve QoS. AMR Telecomunicaciones,
Micromuse's authorized systems integrator in Chile, will handle
implementation and support of the Netcool solution for Entel.


RADIO 13: Denies In Talks With Regarding Acquisition
Grupo Radio 13, a Mexican radio broadcast company, admits it is
currently in talks with the web portal, according to a
Reforma/Infolatina report published Wednesday. However, Grupo
Radio 13 strongly denied any discussions of a potential majority
acquisition by the web portal. Rather, talks are centered on a
possible content-sharing agreement and's sponsorship of a
radio program called "Entorno," hosted by well-known local
financial analyst Ernesto O'Farrill. In addition, Radio 13 said
that reports claiming the company is struggling financially are
not true. In fact, it plans to launch new programming backed by
more-extensive infrastructure and a major advertising campaign on
Feb. 12.

SERFIN: Citibank Mexico Looks To Hire Top Executive
Citibank Mexico is likely to hire Serfin bank top executive
Adolfo Lagos to run its retail banking operations,
Reforma/Infolatina said Wednesday. As a result, Lagos would be
reporting directly to the management of Citibank in New York.
Government-intervened Grupo Financiero Serfin, Serfin's parent
company, was acquired by Spanish-owned Santander Mexicano in May
last year.

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.

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 301/951-6400.

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