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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, February 22, 2001, Vol. 2, Issue 37

                           Headlines




B A R B A D O S

TRANSPORT BOARD: Pay Increase Unlikely For 600+ Workers


B R A Z I L

BARRAMAR: Three Creditors In Talks Over Acquisition
CELESC: Government To Split Generating and Distribution Assets
CESP: Interested Companies Unlikely To Participate In Auction
CVRD: Refuses To Concede To BHP
SEARA ALIMENTOS: Registers Profits In 2000


C H I L E

EDELNOR: Mirant Confirms Plan To Sell Off 82-Percent Stake


M E X I C O

BUFETE INDUSTRIAL: Begins Alliance Talks With Serbo
CHRYSLER: Jim Schroer Named Exec VP of Global Sales, Marketing
FEMSA: Plans New Layoffs At Its Local Branch
GRUPO MASECA: Gets $400M Syndicated Loan


V E N E Z U E L A

CORIMON: Anticipates Profits
VENEPAL: Smurfit Wants To Run Old Partner


      - - - - - - - - - -


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B A R B A D O S
===============

TRANSPORT BOARD: Pay Increase Unlikely For 600+ Workers
-------------------------------------------------------
Looks like financially-strapped Transport Board can't fulfill its
promise to pay increases to more than 600 of its employees,
Caribbean News Agency reported Monday. The state-run company
agreeably signed an industrial contract with the Barbados Workers
Union (BWU), but it did not have the resources to meet the third
tranche of retroactive salaries and wages due on February 23. The
Board is reportedly for the approval of the BWU to defer payment
of the third and fourth tranches until April 30 and May 31 this
year.



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B R A Z I L
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BARRAMAR: Three Creditors In Talks Over Acquisition
---------------------------------------------------
Three Creditors of Barramar, a company recently declared
insolvent, are contemplating acquisition strategies. News of the
talks was announced in a South American Business Information
report published Monday. Alcatel, Pegasus and Telefonica are
reportedly in discussions to structure a potential deal.
Barramar's estimated debt is R$120 million with Alcatel, its main
creditor.

The negative event at Barramar could harm both Telefonica and
Pegasus. Both companies advanced US$60 million to the company for
the construction of pipelines. Telefonica may face a serious
problem if it is unable to fulfill Anatel (Agencia Nacional de
Telecomunicacoes) goals.

Meanwhile, Barramar stopped expansion efforts for its telephone
services networks through fiber optic cables.


CELESC: Government To Split Generating and Distribution Assets
--------------------------------------------------------------
The Santa Catarina government decided to split the generating and
distribution operations of Centrais Eletricas de Santa Catarina
(Celesc), South American Business Information reported Monday.
The government will also form of a holding company with
subsidiaries in both segments, in addition to the
telecommunications area. The decision to divide the operations is
seen as step toward eventual privatization likely to happen by
2002. The privatization permits the expansion of the generating
division that currently supplies only 3.6 percent of 2,200 MW
electric power distributed by Celesc.

Currently, Celesc owes some R$95.2 million to suppliers. The
company is planning to sell off R$110 million worth of Casan
(Companhia Catarinense de Aguas e Saneamento) stock to settle its
liabilities. Celesc acquired Casan shares previously as payment
for amounts owed by Casan to Celesc.


CESP: Interested Companies Unlikely To Participate In Auction
-------------------------------------------------------------
Mounting speculation indicates that power companies Duke Energy,
AES, Tractebel and Endesa Spain will not participate in the
March-April privatization auction of Brazil's Sao Paul state-
based generator Cesp Parana, according to an article in the
Business News Americas.

"What we do know is that, up until last week, the company was
participating in the Cesp sale, which does not mean we will
participate in the process, given that these decisions are always
taken at the last moment," an Endesa source remarked. Meanwhile,
Duke, AES and Tractebel all refused to give comments concerning
the matter.

Information in the data room revealed that the company is saddled
with liabilities totaling $4 billion, which, together with the
necessary expansion costs and the bidding price, would mean the
winner could only start recovering investments in six years.
According to reports, the huge debt and lenghty investment
recovery period may have been enough to scare away the suitors.

According to Banco Pactual analyst Pedro Batista, one or two
interested companies will certainly not participate in the
auction. Batista says they'll decline not because Cesp is not an
attractive company for investors but because of the price that
control of the company may bring at auction.


CVRD: Refuses To Concede To BHP
-------------------------------
For Companhia Vale do Rio Doce (CVRD), the battle with
Australia's BHP is not yet over. The company is preparing to
enter another bidding war that begins in the next few days for
the purchase of Ferteco Mineracao. The announcement by Jorio
Dauster, president of the Brazilian mining giant, came in a
Gazeta Mercantil report released Tuesday. CVRD lost to the
Australian minerals company in a bid for a stake in Caemi.

"The game is only finished when it's over, and we are still in
the middle of play," he said in a dry tone. The strategy is not
to admit defeat until the Caemi case is decided. According to
Dauster, the decision sits now with Mitsui, which has the right
of preference in the deal, showing that the issue is a tenuous
one for the company at this moment.

"We are certainly going to make a firm proposal to buy," he said.
Ferteco is the third largest iron ore producer in Brazil, with
capacity to produce 18.4 million tonnes a year of concentrated
sinter feed, concentrates, pellets and granulates.


SEARA ALIMENTOS: Registers Profits In 2000
------------------------------------------
Brazilian food producer sees bright light ahead as it posted
profits totaling R$5.031 million in 2000, reversing previous
year's loss of R$29.092 million, Brazil Financial Wire said
Monday.

Last year's profit came on net revenues of R$ 910.827 million,
which increased 11.83 percent. It recorded gross profit of R$
231.302 million in 2000, against 1999's R$209.995 million

Operating expenses were at R$ 157.966 million, a 7.24-percent
increase from the previous year. Net financial expenses were cut
by 58.95 percent, to R$101.986 million. Operating results moved
from red to black, with 1999 losses of R$40.228 million becoming
a profit of R$ 1.036 million in 2000.

As of Dec. 31, the company's net equity was R$ 227.22 million.



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C H I L E
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EDELNOR: Mirant Confirms Plan To Sell Off 82-Percent Stake
----------------------------------------------------------
Mirant, formerly Southern Energy, disclosed plans to sell off an
82-percent stake in the Chilean power company Empresa Electrica
del Norte Grande S.A. (Edelnor), according to South American
Business Information report Tuesday. Edelnor's total liabilities
amount to 235.426 billion pesos, of which, 27.129 billion are
current liabilities. According to Mirant, Edelnor is prepared to
make the US$14.6 million payments that will be due next month.

Less than two weeks ago, TCR-LA reported that Fitch downgraded
the company's local and foreign currency ratings from `B-` to
`CCC' as a result of a continuing poor financial performance and
short-term liquidity concerns. According to Fitch, the company's
liquidity position is very tight given estimated cash on hand and
required expenditures and payments in 2001.



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

BUFETE INDUSTRIAL: Begins Alliance Talks With Serbo
---------------------------------------------------
Struggling Mexican construction firm, Bufete, revealed it has
begun alliance talks with private company Corporativo Serbo in an
effort to advance its financial restructuring, Reuters said
Tuesday.

"We have been in talks with (Serbo) for some time now.
Unfortunately we still don't have anything formalized," Erick
Quieones, the troubled firm's financial director, said, refusing
to give further details.

Last year, Bufete also held alliance talks with Mexican
construction company Grupo Iconsa and U.S. building and
engineering firm Enron, but unfortunately, couldn't close a deal
with either of them.


CHRYSLER: Jim Schroer Named Exec VP of Global Sales, Marketing
--------------------------------------------------------------
Chrysler Group has named James C. Schroer Executive Vice
President of Global Sales and Marketing, effective February 26,
2001. Schroer (49) is joining Chrysler after having been Vice
President - Global Marketing at Ford Motor Company since June,
1999. At Chrysler, he will be in charge of the entire Sales and
Marketing organization, including the company's Chrysler, Dodge
and Jeep dealer network, at a time when the full Chrysler Group
Turnaround Plan is being put in place.

At the same time, the company is announcing that Gary Dilts (50)
has been named Senior Vice President, Sales and Field Service,
responsible for car and truck sales, dealer development
activities, customer service, field operations and customer
relations activities. Dilts has been Senior Vice President of the
e-Connect Platform Team since January, 2000, and has over 20
years experience in the Chrysler Sales organization.

The company is also announcing that George E. Murphy (45) is
joining the Chrysler Group as Senior Vice President, Global Brand
Marketing, in charge of all Marketing operations, including brand
and corporate advertising, customer relationship marketing,
motorsports, product marketing plans and research activities.
Murphy has been with the Ford Motor Company since 1999, as
General Marketing Manager - Ford Division. He was previously with
General Electric for more than 10 years, most recently as Vice
President of Worldwide Product Management for GE Lighting.

Dilts and Murphy will both report to Schroer, succeeding M. John
MacDonald (56) and Arthur C. (Bud) Liebler (58), respectively,
who have decided to leave the company under its early retirement
plan.

"We are extremely pleased Jim Schroer is joining our company to
lead our Sales and Marketing organization," said Chrysler Group
President and Chief Executive Officer Dieter Zetsche. "This is a
critical time for the Chrysler Group. We know we need the full
support of our 4,365 dealers in order to execute our Turnaround
Plan. Jim Schroer is the right leader to complement our
experienced team in Sales and Marketing. He has a great deal of
expertise in developing and marketing global brands and heading
up a large organization of professionals at an international
company."

Schroer joined Ford in 1996, after serving as Executive Vice
President of Sales and Marketing at RJR Nabisco. He has a
bachelor's degree in economics from Carleton College and a
master's degree in business administration from Harvard
University.

"I am very eager to start helping Chrysler get back on the road
to profitability, and then on to much greater success," said
Schroer. "Together, we will work to re-energize the Chrysler
Group and make great things happen for our customers, dealers,
employees, and shareholders."

In a related announcement, the company has appointed Thomas
Hausch (35) as the head of International Sales and Marketing,
with responsibility for all Chrysler Group activities outside
North America, and reporting to Jim Schroer. Hausch joined
Mercedes-Benz in 1985 as an assembly line employee at the
Sindelfingen plant. After earning his business engineering and
master of business administration degrees, he re-joined Daimler-
Benz in 1993. Most recently he was in charge of Mercedes-Benz
Passenger Car sales and marketing activities for Northern and
Southern Europe, before moving to the Chrysler Group in December,
2000, as a project manager in the Turnaround Team.

Dieter Zetsche also praised the efforts of the entire Sales and
Marketing area. "Together with our strong Chrysler Group Sales
and Marketing team, these four leaders will further ensure the
success of our Turnaround Plan," said Zetsche. "I would like to
express the thanks of the entire DaimlerChrysler Board of
Management to Bud Liebler and John MacDonald for their long years
of tireless and dedicated efforts on behalf of the company."


FEMSA: Plans New Layoffs At Its Local Branch
---------------------------------------------
Mexican company Femsa is planning new layoffs after reducing
mainly management personnel, according to an article in the South
American Business Information published Monday. Femsa, the main
bottling company of Coca-Cola in Argentina, began to restructure
its local branch in 2000 and appointed Ernesto Silva as Director
of the local unit.

Femsa started its Argentinean operations in 1994. Since then, the
company has been affected by constant reduction of prices
established by The Coca-Cola Company, which is in charge of the
strategic decisions of the Mexican company. The company's crisis
in Argentina was provoked by cheap soft drink brands forcing
Coca-Cola to reduce its prices to remain competitive in the
market.


GRUPO MASECA: Gets $400M Syndicated Loan
----------------------------------------
Mexico's Grupo Maseca (GRUMA), last week, acquired a three-year
syndicated loan of US$400 million from a group of 20 banks
including Bank of America, Rabobank, Standard Bank of London, ABN
Amro, Bank One, Societe General, Citibank, BBVA Bancomer and
Banamex, according to a South American Business Information
report. GRUMA will use the loan to restructure short-term debt
obligations and reduce costs associated with its $750-million
debt. According to reports, no single bank in the syndicate will
finance more than 10 percent of the total loan package.

GRUMA SA de CV through its subsidiary Grupo Industrial Maseca SA
is the leading producer of corn flour in Mexico and the largest
producer of tortillas in the United States. GRUMA owns twenty-
three corn flour production plants, including two in the United
States and five in Central and South America. The company also
owns thirteen tortilla production plants in the United States.
Last year, 45 percent of its sales and 50 percent of its cash
flow came from the US. It is said to have invested almost US$800
million in the last few years.



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

CORIMON: Anticipates Profits
----------------------------
After reporting losses for the last two years, Venezuelan
industrial group Corimon is likely to see a turnaround in its
results and expects to report profits at the end of its financial
year beginning in April 2001. However, the year ending March 2001
will manage only operating and not net profits, with a strong
boost to sales.

Corimon has begun specializing in paint, its core product. The
company has reportedly sold off its hypermarket (DIY) chain
Construcentro and is currently in talks with Pequiven for a
possible sale of a 26-percent stake in local alcohol producer
Pralca (Productora de Alcohol).

Corimon has been the topic of recent widespread takeover
speculation.


VENEPAL: Smurfit Wants To Run Old Partner
-----------------------------------------
In an effort to secure their permission to take over the reins of
troubled Venezuelan paper group Venepal, Paper group Smurfit has
met with the banking creditors of the troubled company. The
meeting was announced in a South American Business Information
report Tuesday. Accordingly, talks between the companies are
going well. If Smurfit is successful, it could buy into its old
partner and carry on with their old project Veneston, abandoned
due to Venepal's debt difficulties.  

Venepal, which struggled with financial problems for the last two
years dealing with US$58 million in restructured debt, has until
September 2001 to find a new partner. If the effort proves to be
futile, bank creditors could exercise their right to own a
controlling 64 percent of the firm.



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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