TCRLA_Public/010306.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

            Tuesday, March 6, 2001, Vol. 2, Issue 45



EDENOR: EDF Acquires Control Of Electricity Distributor


COTEL: Superintendence Prolongs Intervention For Another 3 Months


BANESPA: Anticipates Reporting US$1.3B Loss In 4Q00
CESP: Brazilian Court Lifts Injunction Blocking Reservoir Filling
CESP: EDP Awaits Terms Of Privatization
CHRYSLER: To Phase Out Campo Largo Plant
COPEL: 4Q00 Results To Be Released By Mid March
COPENE: Bidding Invitation To Be Published Later This Week




CHRYSLER: To Dismiss 2,700 Employees
CINTRA: Sell-off Seen Delayed Until Year-End
GRUPO DESC: S&P Affirms Lowered Ratings
BANCO INVERLAT: IPAB To Decide Which Shareholders Remain
XEROX CORPORATION: Another Shareholder Lawsuit Filed


ANTELCO: Paraguayan Government Delays Sale To November

     - - - - - - - - - -


EDENOR: EDF Acquires Control Of Electricity Distributor
Electricite de France (EDF) became the majority shareholder of
the company when it acquired the shares of Endesa and Repsol-YPF
in electricity distributor company Edenor, South American
Business Information said Friday. The recent move will increase
EDF's ownership from 31 percent to more than 80 percent in
Edenor. Consequently, EDF will start providing added value
services to industries, hotels and hospitals and will be in
charge of the maintenance and administration of their electricity
installations. The company will also provide Internet access
through electrical wires through a commercial division called EDF
Global Solution.

Edenor is the largest electric distribution company in Argentina
in terms of customers served and sales volume. The company has
had a 95-year exclusive concession since September 1992 to
distribute electricity in the northwestern half of the greater
Buenos Aires area and the northern portion of the city of Buenos


COTEL: Superintendence Prolongs Intervention For Another 3 Months
According to a South American Business Information report Friday,
the Bolivian telecoms Superintendence has decided to extend its
intervention in Cotel, the country's largest fixed line operator,
for another 3 months. The company, which has debts amounting to
US$32 million, has been looking for a strategic equity partner to
ensure its future. Early last month, the auction of a controlling
stake in the line operator was abandoned when none of the 15
registered bidders presented an offer. The Bolivian government
will reportedly launch another round of international tender
offer for Cotel.


BANESPA: Anticipates Reporting US$1.3B Loss In 4Q00
Formerly state-run Banespa may be reporting a US$1.3-billion net
loss for the fourth quarter of 2000, Antonio Klapfka, a banking
analyst at ABN Amro Securities Brasil, said in a Business News
Americas report Friday edition. Klapfka revealed that US$1.17
billion of which would come from higher provisioning and an
expected restructuring charge in the wake of Spanish group Banco
Santander Central Hispano's (BSCH) November acquisition of
Banespa. Several analysts are in doubt whether BSCH will ever see
a healthy return on its investment when it paid nearly four times
the minimum bid price of US$940 million for the acquisition of

Previously, TCR-LA reported that the Brazilian Supreme Justice
Court (STJ) issued a final ruling preventing Banespa from keeping
the Sao Paulo state government's court accounts.  

CESP: Brazilian Court Lifts Injunction Blocking Reservoir Filling
The privatization process of Cia. Energetica de Sao Paulo (Cesp)
can now be resumed after the Brazilian high court lifted an
injunction that prevented the utility from filling a reservoir at
the company's Sergio Motta hydroelectric plant. The decision was
announced in a Bloomberg report released Friday. The final ruling
issued by Judge Paulo Costa Leite of the Brazilian Superior
Justice is a key condition for what could be the world's biggest
privatization sale likely to happen next month.

Concern about filling the reservoir with water was the primary
reason the six bidders withdrew from the sale of CESP in
December. A lower court had ruled the company didn't have the
proper environmental permits to fill the reservoir, which is
needed to expand output of electricity by 20 percent.

The six original interested bidders were U.S.-based firms Duke
Energy Corp., AES Corp. and Southern Energy Co., and Portugal's
Electricidade de Portugal, France's Electricite de France and
Spain's Endesa. In January Sao Paulo energy secretary Mauro Arce
said Belgium's Tractebel and Brazilian group VBC made up of
Votorantim, Bradesco bank and Camargo Correa may also bid for the

CESP: EDP Awaits Terms Of Privatization
Electricidade de Portugal (EDP) will not make a decision whether
to bid in the sale of the power firm CESP until Brazil sets terms
for the company's delayed privatization, a spokesman from the
Portuguese utility said in a Reuters report Friday edition.

"EDP continues to observe developments and if CESP should be put
up for sale again, we will study the situation just like other
situations we are studying in Brazil," the spokesman said.

EDP was one of the six original interested bidders, alongside
U.S.-based firms Duke Energy Corp, AES Corp and Southern Energy
Co, and France's Electricite de France and Spain's Endesa.

CHRYSLER: To Phase Out Campo Largo Plant
Chrysler will be phasing out its Campo Largo plant, located at
the state of Parana in Brazil, South American Business
Information reported Friday. The company currently operates with
11.5 percent of its installed capacity at Parana, with daily
production of 28 Dodge Dakota pickup trucks. Early last month,
the company announced plans to halt the production of the trucks
and would produce a new vehicle to replace it. However, its plan
to produce a new vehicle at the Campo Largo plant suffered a
setback as it had to comply with the Brazilian motor vehicles
legislation. The law stipulates that the truck maker should
comply with the same nationalization level foreseen for Dakota,
50 percent until the end of 2001 and 60 percent until December

COPEL: 4Q00 Results To Be Released By Mid March
Brazil's Parana state integrated power company Copel (Companhia
Paranaense de Energia) is expected to release its 2000 fourth
quarter results by mid March, according to a South American
Business Information report Friday. Copel, which would probably
go on the auction block in November of the current year, may
report a 21 percent reduction of net profit to R$133 million,
analysts said. Between January and September 2000, the company
posted R$288.6 million in net profits. Its preferred stock soared
by 4.2 percent when it announced a 94-percent increase in profits
in the third quarter of 2000.

Copel is likely to be privatized as a whole - distribution,
generation and transmission - which is a further incentive for
investors. All the financial resources obtained from the sale of
the company will not be used to pay debts. Instead proceeds will
be invested in education, health, security, transport and
generating projects, in compliance with the 1998 law regarding
the use of funds obtained from such a sale.

COPENE: Bidding Invitation To Be Published Later This Week
Brazilian central bank's (BC) director of Public Finances, Carlos
Eduardo de Freitas announced the invitation to bid for shares of
petrochemical company Copene should be published by the end of
this week, Brazil Financial Wire reported Friday. The shares to
be sold are owned by Odebrecht, Conepar and Mariani. Freitas
informed that the company data room should be open for about 15
days. He also added that the only party interested in buying the
controlling stake in Copene so far, is the Ultra group.

"But that doesn't mean other parties won't express an interest,"
he stressed, reemphasizing that the shares would probably only be
sold at the end of the month.


Name:        Colombiana de Tejidos S.A. (Coltejer)
             CRA. 42 # 54A - 161
             Autopista Sur
             Itagui, Colombia
             (57) 3731133
SIC:         Textile Mill Products (2200)
Assets:      $792.6 million
Liabilities: $568.3 million
Type of Business: Coltejer was founded by Alexander Echavarria on
             October 22, 1907, Coltejer annually processes 30,000
             tons of fiber cotton, polyester, linen and nylon) in
             186,776 bobbins and produces 100 million square
             meters of fabric in 1,305 looms.

Trigger Event: In view of its incapacity to meet the volume of
             debt, interest rates, and other conditions of
             remuneration, specially the repayment structure of
             the same, a Reorganization Agreement was executed in
             favor of the company with the purpose of maintaining
             it as source of payment of its debt and avoid its
             liquidation, under the provisions of Law 550 of
             December 30, 1999.

             Coltejer S.A. has suffered economic hardships during
             the past years due to a decrease in demand for its
             products; by virtue of the country's difficult
             economic situation and of other factors that include
             the opening of the national market, the revaluation
             of the Colombian Peso, and contraband.

Notes:       A copy of the company's Reorganization Agreement is
             posted on their website at

** Editors' Note: "Company Profile" is a new feature of the TCRLA
designed to provide relavent context to existing and future
company-specific news. Stay tuned as we develop a searchable,
central archive location of Profiles for the troubled companies
we track.


CHRYSLER: To Dismiss 2,700 Employees
In order to meet its goal of cutting about 5,000 salaried workers
and save $2.5 billion over the next three years, Chrysler, the
struggling unit of DaimlerChrysler AG will permanently dismiss
2,700 white-collar workers, Reuters reported Friday. The other
cuts came from 2,285 salaried workers who took the company's
early retirement offer, which expired last week, Jodi Tinson, a
spokeswoman from Chrysler, said.  

The company designed a $3.6-billion plan to shed 26,000 jobs or
20 percent of its total workforce. In addition to the salaried
cuts, the company is eliminating 19,500 factory jobs and 1,800
temporary positions. According to Chrysler, each white-collar job
cut would cost the company $82,000, while each hourly job cut
would cost about $40,000. The automaker anticipates losing
between $2 billion and $2.5 billion this year even with the job
reductions and a host of other cost-saving measures.

CINTRA: Sell-off Seen Delayed Until Year-End
The sale of the struggling Mexican airline holding company
Cintra, which controls both leading airlines Aeromexico and
Mexicana, could be delayed until the end of the year, according
to the national transport ministry in a South American Business
Information report Friday edition. The Mexican pilots'
association, on the other hand, wants the sale to go as quickly
as possible since the process is already set in stone.
Conventional wisdom holds that the association is generally
opposed to the sale process. However, the two groups agree that a
new stability is needed so as to compete in the international

The national transport ministry will work closely together with
IPAB, Mexico's bank bailout and deposits insurance agency, and
the treasury to warrant a successful and painless sell-off.  

GRUPO DESC: S&P Affirms Lowered Ratings
Standard & Poor's today affirmed its triple-'B'-minus local and
double-'B'-plus foreign currency corporate credit ratings on Desc
S.A. de C.V. The local currency outlook is stable.

The foreign currency outlook is positive. The foreign currency
corporate credit rating and outlook mirror those of the United
Mexican States.

At the same time, Standard & Poor's affirmed the double-'B' plus
rating on Dine S.A. de C.V.'s US$150 million guaranteed notes due

Issued in October 1997, the rating assigned to these notes relies
heavily on the unconditional guarantee from Desc, and reflects
Desc's structural subordination.

The ratings reflect the strong market shares and operating
profiles of Desc's core business lines, automotive parts and
chemicals, and these products' significant export sales.

Several strategic associations with international partners
provide the company with access to modern technology and
facilitate exports; these partners and licensed technologies
provide for almost 50% of Desc's operating profit.

Desc's moderate financial policies and credit profile are
balanced by the cyclical nature of the automotive and chemical
industries, by lower-than-expected results from its restructured
food business, and by its relatively leveraged real estate
operations, the latter clearly the company's most volatile

Desc's main subsidiaries are:

-- Unik S.A. de C.V., the subholding company of its auto parts
operations and responsible for 47% and 63% of Desc's sales and

-- Girsa S.A. de C.V., whose chemical and petrochemical products'
sales represented 34% of Desc's sales and 23% of its EBITDA
during 1999.

Desc's food business (still known as Agrobios) increasingly
depends on branded packaged products; it provided for an
additional 15% of sales but only 7% of Desc's EBITDA, while the
real estate operation contributed to the balance (4% of sales and
7% of Desc's consolidated EBITDA)

Unik, one of the largest independent auto parts producers in
Mexico, has strong domestic market shares and significant exports
(in excess of 60% of sales).

Unik has a number of important partnerships, including Dana Corp.
and TRW Inc.

Using licensed and proprietary technology, Unik's main lines are
relatively high-value-added products.

The company has positioned itself within NAFTA as a major
supplier of light and medium transmissions. Given this position
and low cost status, Standard & Poor's expects no significant
deterioration in Unik's operations as a result of the current
slowdown in auto sales in the U.S. economy.

On the other hand, Girsa's most important product lines are
synthetic rubber, phosphates, carbon black, polystyrene, and
consumer products such as glue.

The company has significant market shares in the domestic market,
but its exports (roughly 30% of sales) are also important.

Key factors for Girsa's credit profile will be at what pace it
will be able to pass-on the higher prices of several of its
commodities to its customers, and thus how Girsa gradually
improves profitability in those lines whose raw material prices
are still depressed.

Standard & Poor's expects that Girsa's credit profile will not
show a significant change in the next few years, and that several
of its products might be near the bottom of their now highly
irregular cycles; in the meantime, Girsa's ratings benefit from
being part of Desc's business portfolio.

In 1999 and 2000, Desc's sales were US$2.4 billion, up from
1998's US$2.2 billion and 1997's US$2.0 billion.

The company's EBITDA margin steadily improved to 21% by the end
of 1996 from 1994's 15%, as a result of high commodity prices and
a cheap Mexican peso.

However, this margin declined again to about 15% as of the end of
2000, from 18% in 1999 and 19% in both 1998 and 1997, for several

-- The consolidation of the businesses acquired in 1996-1997;

-- The drop in petrochemical prices beginning in 1997;

-- The margin reduction created by basic petrochemicals' sudden
price rebound since around October 1999, an effect that will last
until Girsa is able to reflect such increases in its own
products' selling prices;

-- The sharp slowdown in retail car sales in the U.S. in November
and December 2000, partially offset by January and February
sales, which were better than expected; and

-- The strength of the Mexican peso (specifically, against the
U.S. dollar) since late 1998, which, along with domestic
inflation, makes peso-denominated costs more expensive.

Accordingly, Desc's EBITDA interest coverage improved to 4.5x,
5.3x, and 5.4x by 1996, 1997, and 1998 (respectively), from about
3.6x in the challenging economic environment of 1995. Afterwards,
this ratio declined to 3.9x in 1999 and 3.1x by year-end 2000.

The downturn was mainly based on the narrowing of Girsa's
conversion spreads since April 2000, the strength of the Mexican
peso, and a below average fourth quarter for Unik.

As a result of the acquisitions referred above and capital
investments realized, Desc's debt to capitalization ratio
resulted in only a moderate increase to 43% in 1998 from 36% in

Since then, this ratio has been close to 40%. Similarly, Desc's
debt to EBITDA ratio gradually increased to about 2.5x by year-
end 1999 from 2.0x in 1996, and by year-end 2000 it increased
significantly to 3.5x.

Over the next few years, these ratios will show a gradual but
steady recovery to the levels shown prior to the slowdown of the
petrochemicals and autoparts industries.

Higher EBITDA results and earnings retention and cash flows are
expected to take sometime to fully recover before they allow for
a significant debt reduction (considering that no cash-flow will
be destined to re-acquire Desc's shares).

Accordingly, it is expected that planned investments will be
financed mainly through internally generated resources.

However, potential strategic acquisitions could boost leverage
ratios, further endangering Desc's credit profile in relation
with its current ratings.

Desc's currency exposure, relevant to its dollar-denominated
debt, is partially mitigated by its significant export sales and
dollar-denominated domestic sales.



The local currency outlook reflects Desc's competitive
challenges, cyclical market conditions, and ongoing investment

However, the company's moderate financial policies and strong
business position might help to offset the downside risk
associated with the current downturn in its most significant
industrial activities.

The foreign currency outlook reflects the outlook of the United
Mexican States.

BANCO INVERLAT: IPAB To Decide Which Shareholders Remain
Mexican bank bailout agency IPAB will have to choose which of the
3,000 will remain as minority shareholders in Banco Inverlat,
according to a South American Business Information report Friday.
Those selected according to certain criteria will receive their
pro-rata share of the 9 percent in the new Grupo Financiero
Scotiabank Inverlat. IPAB controls 45 percent of Inverlat, 9
percent of which belongs to Inverlat shareholders. Scotiabank of
Canada, on the other hand, controls the remaining 55 percent.

Inverlat was taken over by government authorities in 1995, who
injected nearly $5 billion to clean up the bank's balance sheet.  
Scotiabank first took a 10 percent stake in Inverlat in 1995 for
some $175 million. Then, last November it finished negotiations
it had with IPAB raising its stake in Inverlat to a majority 55
percent for a further $40 million.

XEROX CORPORATION: Another Shareholder Lawsuit Filed
The Law Firm of Cauley Geller Bowman & Coates, LLP announced
today that it has filed a class action in the United States
District Court for the District of Connecticut on behalf of all
individuals and institutional investors that purchased the common
stock of Xerox Corporation ("Xerox" or the "Company") (NYSE:XRX)
between February 15, 1998 and February 6, 2001, inclusive (the
"Class Period").

The complaint charges that the Company and certain of its
officers and directors violated the federal securities laws by
reporting false financial results during the class period and
failing to adhere to the standard accounting practices the
company claimed to follow. Specifically, the complaint alleges
that Xerox improperly recognized revenues from its leasing
operations by booking up front those lease payments attributable
to future supplies and services, boosted short-term results by
overstating the value of future payments from leases originated
in developing countries, and failed to write off mounting bad
debts and improperly classifying transactions in its Mexico
operations, which resulted in $119 million in charges in the
second and third quarters of fiscal 2000.

On June 16, 2000, Xerox issued a statement about the
"irregularities" in Mexico, falsely portraying them as an
aberration perpetrated by rogue executives. But on February 6,
2001, a Wall Street Journal article reported allegations of
accounting fraud that went far beyond Mexico. Meanwhile, Xerox
shares fell from as high as $124 a share during the Class Period
to just $4.43 a share, resulting in hundreds of millions of
dollars in losses to Class members. The company's accounting
practices are now the subject of a Securities and Exchange
Commission (SEC) investigation.


ANTELCO: Paraguayan Government Delays Sale To November
The difficulty in contracting an investment bank to recommend the
best privatization strategy for the state operator Antelco
prompted the Paraguayan government to postpone the sale from
September 28 to November. This was announced by government-
appointed Antelco manager Oscar Stark in a Business News Americas
report published Friday. Morgan Stanley Dean Witter (MSDW) was
previously selected to manage Antelco's privatization. However,
last month, the U.S.-based investment bank declined the contract
citing reasons that the team, which made the proposal for
Antelco, was dissolved and its proposal could not be sustained by

The new selection process will start with a shortlist of Salomon
Smith Barney (US); ABN AMRO (Netherlands); Unibanco (Brazil);
Credit Agricole Indosuez (France); BBVA (Spain); and Sudameris
(Italy). Proposals are due April 2, with the contract to be
signed by May 7.

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
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Information contained herein is obtained from sources believed to
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