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

            Monday, March 26, 2001, Vol. 2, Issue 59

                           Headlines



B R A Z I L

BRASIMAC: To Complete Restructuring Program
CESP: Posted Losses Of R$414.3M In 2000
CVRD: BHP-Billiton Merger Won't Affect Management, Negotiations
iG: Stockholders Approve Acquisition Of Data Center
LIGHT: To Take Out A 3-Year, US$150M Loan
LIGHT: Consolidated Results, Gross Profit Down, Net Loss Up


C H I L E

TELEX-CHILE: Reports Increase In Losses


M E X I C O

ASISTA.COM: To Liquidate Assets
ATLANTICO: IPAB And Bital To Reach Final Agreement In A Week
BANCRECER: IPAB To Sell Troubled Bank Soon
CHRYSLER: Layoffs Spur Union Protests, Grievances
CHRYSLER: Twiggs, Middleton File Suit For Recycling Lemons
CHRYSLER: Spends $5 Billion Cash Reserves In Last Half Of 2000
CINTRA: Aeromexico And Mexicana To Be Sold Second Semester 01


V E N E Z U E L A

MADECO: Reports Better Performance In 2000


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B R A Z I L
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BRASIMAC: To Complete Restructuring Program
-------------------------------------------
Brasimac, the Sao Paulo-based retail furniture and appliance
chain which sought bankruptcy in February 1999, is completing its
restructuring program, South American Business Information said
Thursday. The process, conducted by Itau, is designed to help the
company manage R$110 million in debts. Brasimac currently
operates 153 stores including 2 new stores to be inaugurated in
Rio de Janeiro this month. The chain generates sales of R$350
million annually. The company reportedly hopes to sell a 40-
percent stake for US$25 million to obtain capital to back its
investments.


CESP: Posted Losses Of R$414.3M In 2000
---------------------------------------
Sao Paulo-based Companhia Energ‚tica de Sao Paulo (Cesp), the
power utility company slated to go into private hands in May this
year, posted 2000 net losses of R$414.30 million, reversing
previous year's profit of R$29.20 million, Brazil Financial Wire
said Thursday. Net revenues fell 14.2 percent, to R$ 1.33
billion, while gross profits increased by 25.6 percent, to R$
588.86 million. The company reduced net financial expenses by
64.2 percent, to R$ 896.35 million. Foreign exchange net losses
were also cut by 76 percent, to R$ 524.30 million. Its operating
losses reached a total R$ 307.49 million, down 85 percent. The
loss per thousand-share lot equaled R$ 4.42.


CVRD: BHP-Billiton Merger Won't Affect Management, Negotiations
---------------------------------------------------------------
Some analysts believe that the management of CVRD, as well as its
negotiations to acquire mining company Caemi, will not be
affected by the BHP-Billiton merger, South American Business
Information reported Thursday. Likely scenarios see Billiton
selling off its stake in CVRD in the medium or long term because
of BHP's high iron ore production. However, other analysts
anticipate that BHP and Billiton will raise their stakes in CVRD
next year, when restrictions on foreign capital in CVRD will be
due.

South American Business Information also reported that CVRD may
reach a production of 200 million m tons of product per year
through the acquisition of Caemi and Ferteco. Due to the
untangling process with CSN (Companhia Siderurgica Nacional), the
company will commence a restructuring process, which is being
outlined by McKinsey.


iG: Stockholders Approve Acquisition Of Data Center
---------------------------------------------------
The stockholders of Telemar approved the company's acquisition of
Internet access provider iG's data center, South American
Business Information reported Thursday. The transaction, which
demanded R$40 million in investments, was made via Telemar's
subsidiary TNext. Meanwhile, Telemar Acesso also acquired iG's
structure for Internet access for R$10 million. Telemar expects
the deal save R$212 million in interconnection fees in 2002. iG
is controlled by Opportunity and GP Participacoes.


LIGHT: To Take Out A 3-Year, US$150M Loan
-----------------------------------------
Power company Light will take out a 3-year, US$150-million
syndicated loan led by Salomon Smith Barney, South American
Business Information said Thursday. Each of the unnamed banks
reportedly will lend between US$25 million and US$30 million. The
loan will be used to refinance R$200 million debts due this
April. Light, which issued US$150 million in bonds just last
month, has R$500 million in debts coming due this year.


LIGHT: Consolidated Results, Gross Profit Down, Net Loss Up
-----------------------------------------------------------
Electric power distribution company Light posted the following
consolidated results in 2000, according to a Brazil Financial
Wire report released Thursday:

* Net losses - R$ 272.05 million (7.4 percent increase from 1999)
* Net revenues - R$ 7.54 billion (21.8 percent increase from
1999)
* Gross Profits - R$ 1.09 billion (9.6 percent decline from 1999)
* Net financial losses - R$ 1.56 billion (24.8 percent increase
from 1999)
* Operating losses - R$ 465.64 million (1.090 percent from 1999)

Light's net equity stood at R$ 2.18 billion as of December 31,
2000.


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

TELEX-CHILE: Reports Increase In Losses
---------------------------------------
Chilean long-distance operator Telex-Chile announced in a South
American Business Information report Thursday that its 1999
losses of 18.534 billion pesos swelled to 19.406 billion pesos in
2000. Non-operating losses increased from 1.193 billion pesos to
18.281 billion pesos over the period. However, operating losses
dropped from 17.303 billion pesos to 1.7 billion pesos. Sales and
administrative costs were down by 26.256 billion pesos, while net
operating revenues decreased by 11.249 billion pesos.

Losses at its subsidiary, Chilesat Servicios Empresariales S.A.,
increased by 605 million pesos, to 5.916 billion pesos. Chilesat
posted non-operating losses of 8.977 billion pesos in 2000,
against non-operating profits of 7.267 billion pesos in 1999.
Operating profits reached 2.218 billion pesos in 2000, compared
to operating losses of 13.1 billion pesos in 1999. Net operating
revenue at the company decreased by 8.838 billion pesos over the
period, while sales and administrative costs decreased by 23.885
billion pesos.



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

ASISTA.COM: To Liquidate Assets
-------------------------------
Asista.com, the Latin American business-to-business e-
marketplace, which received $8.5 million in venture capital a
year ago from J.P. Morgan Capital and Morgan Stanley Dean Witter
Private Equity, is liquidating its assets. The announcement came
from the company's chief financial officer, Alain Marcus, in an
ABI World Thursday edition. Marcus refused to comment on the
reasoning behind the company's financial situation, adding that
he is unsure of the company's future.

Asista, which earlier signed a contract with Latin American
systems integrator Grupo ASA to implement and integrate different
Asista services in Mexico, Argentina and Brazil, claimed it is
the only multi-seller digital trading hub operating in Latin
America's three biggest markets.


ATLANTICO: IPAB And Bital To Reach Final Agreement In A Week
------------------------------------------------------------
Mexican bank bailout agency IPAB and Grupo Financiero Bital are
expected to announce within a week that they have reached a final
agreement over Bital's drawn-out acquisition of government
intervened bank Atlantico. An unnamed Bital top executive is
credited as the source in a Reforma/Infolatina report Thursday
edition. According to him, the announcement would likely be made
before or on the opening day of the bankers' convention on March
29. Meanwhile, IPAB chief Julio Cesar Mendez also revealed that
Bital and IPAB are close to striking a deal.


BANCRECER: IPAB To Sell Troubled Bank Soon
------------------------------------------
The Mexican banking protection institute, IPAB, is now ready for
the sell-off of government-intervened bank Bancrecer, South
American Business Information said Thursday. According to the
report, Deutsche bank will act as the financial agent in the
sale, which includes its loan portfolio, as well as its network
of almost 600 branches. The government-intervened institution
lists assets of more than US$8 billion, almost US$6 billion of
which are loans that have not been repaid (US$5 billion of which
have been transferred to IPAB which has injected over US$10
billion into the struggling bank). Bancrecer's 51 percent stake
in Afore Bancrecer pension group, as well as loans that have
`timed out', will be sold separately.


CHRYSLER: Layoffs Spur Union Protests, Grievances
-------------------------------------------------
The United Auto Workers union has filed several grievances over
31 layoffs by DaimlerChrysler AG's loss-making Chrysler unit, AP
Business News reported Thursday. The union argues that the
employees, mainly designers and graphic illustrators at
Chrysler's Jeep and Truck Engineering site, were laid off
improperly considering that their contract bars layoffs while
other contract workers remain on the job. Refusing to comment on
the matter, Chrysler only said that the U.S. division of the
world's fifth-largest automaker has been careful to operate
within the contract's bounds.

The layoffs are part of a $3.9 billion, three-year restructuring
of Chrysler, which lost $1.8 billion over the past two quarters
and now looks to cut 26,000 jobs, most of them this year.
Chrysler has said nearly all of the targeted 5,000 white-collar
jobs and 1,300 contract ones are to be eliminated by the end of
this month. The company also plans to cut 19,500 blue-collar jobs
over the next three years.


CHRYSLER: Twiggs, Middleton File Suit For Recycling Lemons
----------------------------------------------------------
DaimlerChrysler's Chrysler Group and its dealers "have engaged
for years in reselling repurchased and reacquired vehicles
without properly disclosing" to subsequent buyers that they are
buying recycled lemons, according to a national class action suit
filed today in North Carolina. Chrysler and its dealers have
"engaged in a widespread and conscious pattern of
misrepresentations and obstruction of justice," according to the
suit, which seeks treble compensatory, as well as punitive
damages.

"Reselling repurchased lemons, at the highest possible price and
far too frequently without disclosure appears to us to be a major
part of Chrysler's business practice. It contributes millions
every year to the automaker's bottom line. We hope that this
class action will halt the practice," said Doug Abrams, lead
attorney in the lawsuit.

The seven North Carolina residents who are suing Chrysler after
buying recycled lemons, are represented by law firms that include
two recent past presidents of the American Trial Lawyer's
Association, Howard Twiggs of Raleigh, North Carolina and Richard
Middleton of Savanah, Georgia. They are working with H.C.
Kirkhart, another North Carolina attorney, who specializes in
lemon litigation.

Doug Abrams, a senior partner in the firm Twiggs, Abrams,
Strickland and Rabineau, is also representing another North
Carolina couple suing Chrysler for failing to disclose that they
were buying a recycled lemon. In that case, now more than a year
old, Chrysler has been accumulating sanctions at the rate of
$5,000 a day since early December 2000. Sanctions in that case
now approach $300,000. Recently, the North Carolina Court of
Appeals, affirmed a decision by trial judge Narley Cashwell, that
a binder of damaging Chrysler documents should be made public.

Reacting favorably to the suit, Rosemary Shahan, founder and
executive director of C.A.R.S. a California consumer group, said
"Instead of looking for loopholes to squeeze lemons through,
Chrysler should focus more on improving its products." A
recognized leader in the national effort to end lemon laundering,
Shahan is Safetyforum.com's "Resource of Record" for Lemon
Laundering.

Each of the seven plaintiff's in the class action suit bought
previously owned Chrysler vehicles from an authorized Chrysler
dealer without being told that Chrysler had just months earlier
bought back the vehicle from a previous owner because repeated
attempts to repair the vehicle had failed.

The lawsuit claims that Chrysler and its authorized dealers
"caused consumers to overpay for their vehicles" because they
failed to disclose the vehicle's problem-filled history. In fact,
the suit alleges, the plaintiffs "would have elected not to
purchase the vehicles in the first instance if they had received
proper disclosure."

The suit accuses Chrysler "as part of a nationwide pattern of
misconduct," of calculating the additional profit and benefits it
would receive by failing to disclose to subsequent buyers that
they were buying a recycled lemon. Whenever Chrysler has been
sued by individual consumers, it "has engaged in an intentional
and flagrant pattern of discovery abuse and obstruction of
justice in order to deter consumers from asserting their rights,"
the suit claims.

Twiggs, Abrams, Strickland and Rabineau are Safetyforum.com
"Attorneys of Record" for Lemon Laundering.


CHRYSLER: Spends $5 Billion Cash Reserves In Last Half Of 2000
--------------------------------------------------------------
Chrysler, a unit of DaimlerChrysler AG, burned through $5 billion
of its $7.5 billion cash reserve in just five months last year on
plant upgrades and consumer incentives as its U.S. auto sales
fell far short of expectations. This was revealed by Chrysler's
controller and senior vice president James Donlon in an AP Online
News published Thursday. Donlon blamed the company itself for its
cash drain, saying that the money had not been diverted to other
uses in the troubled DaimlerChrysler empire. Donlon cited that
Chrysler's selling of 200,000 fewer cars and trucks consumed $2
billion from Chrysler's cash reserves. Plant upgrades to build
new models drained another $1 billion, while discounts on new
vehicles chewed up an additional $2 billion more. Donlon's public
accounting of where the money went from last July through
December comes as loss-making Chrysler wages a three-year, $3.9
billion turnaround effort, including plans to cut 26,000 jobs.

The company, which lost $1.8 billion over the past two quarters,
expects an operating loss between $2 billion and $2.5 billion
this year. It hopes for a return to profitability in 2002.

Now, Donlon said, "We're spending the Chrysler cash in new
investments on the Chrysler side, both for powertrains and
vehicle programs, at a higher rate than in previous years. That's
what is causing the imbalance -- not diversions, either outright
or behind-the-scenes ... None of that is going on."


CINTRA: Aeromexico And Mexicana To Be Sold Second Semester 01
-------------------------------------------------------------
IPAB, Mexican banking protection institute, wants to privatize
Cintra-controlled airlines Aeromexico and Mexicana de Aviacion in
the second semester of this year, according to a South American
Business Information report published Thursday. The banking
institute, which hired Merrill Lynch to act as financial agent in
the airlines' sale, expects to get up to US$1.4 billion from the
forthcoming transaction. IPAB had wanted to sell Cintra in one
whole package but competition authorities insisted on the
separate sale of the two airlines. Foreign companies are
restricted by law to no more 25 percent direct and 49 percent
indirect ownership of the airlines.



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

MADECO: Reports Better Performance In 2000
------------------------------------------
Chilean metal wire and cable manufacturer Madeco posted better
results in 2000, reverting its 1999 operating loss of US$23.1
million into an operating profit of US$17.4 million last year,
according to its parent company Quinenco in a Business News
Americas report published Thursday. Quinenco also announced
Madeco increased its revenues from US$459 million in 1999 to
US$528 million in 2000. The improved performance of Madeco,
according to Quinenco, is partly due to an improved copper and
fiber optic cable sales in Brazil. Despite the improvement in
operating results, Madeco still posted a net loss of US$29.3
million in 2000, compared to a loss of US$95 million in 1999.




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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Information contained herein is obtained from sources believed to
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