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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

            Friday, March 30, 2001, Vol. 2, Issue 63

                           Headlines


B R A Z I L

CESP: PED Agrees Minimum Price Should Not Exceed US$850M
LIGHT: Real's Depreciation Seen Affecting First Quarter Earnings
OLVEPAR: Negotiates With Creditor To Lease Two Parana-based Units
TEC TOY: Ends Bankruptcy Process


C O L O M B I A

AVIANCA: Reports Losses, Merges With Aces


M E X I C O

GRUPO VITRO: To Benefit From Production Cuts At Libbey
HYLSAMEX: Seeks Partner To Share The Financial Pain


V E N E Z U E L A

SIVENSA: Could Shutdown Orinoco Iron Plant
SIVENSA: BHP To Write Off Investments At Orinoco Plant



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B R A Z I L
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CESP: PED Agrees Minimum Price Should Not Exceed US$850M
--------------------------------------------------------
After a meeting of the state's privatization committee (PED), the
Sao Paulo state government announced that the minimum price for
the Brazilian generator Cesp, slated for privatization in May,
will not be set above R$1.8 billion (US$850 million), Business
News Americas reported Wednesday. After a careful analysis of the
sale plan during the meeting, the PED agreed that the definitive
price would not be more than 10 percent above the amount of R$1.7
billion set in December during the first auction. The price, as
well as the schedule for the sale of the utility, would be
revealed at the body's next meeting on April 3, as agreed also in
the meeting.

Cesp has 6,319MW installed capacity, all hydroelectric. The
generator is the last of the three companies spun off from the
former Cesp for privatization: Duke bought Paranapanema and AES
purchased Tiete.


LIGHT: Real's Depreciation Seen Affecting First Quarter Earnings
----------------------------------------------------------------
L¡via Baiao, financial superintendent at Rio-de-Janeiro based
electric utility Light, expects that the company's first quarter
earnings will be greatly affected by the real's depreciation
against the U.S. dollar, Brazil Financial Wire revealed
Wednesday. Baiao revealed that the electric utility's
consolidated debt at the end of 2000 stood at R$4.95 billion, 63
percent of which comprised dollar-denominated financial
obligations. The power company recently announced that it will
take out a 3-year, US$150-million syndicated loan 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
obligations coming due this year.


OLVEPAR: Negotiates With Creditor To Lease Two Parana-based Units
-----------------------------------------------------------------
Olvepar, a soy processing company currently operating under
bankruptcy protection from creditors, is presently in talks with
Centro-Sul Servicos Maritimos Ltda. over its intent to lease its
two Parana-based units. Centro-Sul confirmed the news in a South
American Business Information report released Wednesday.
According to a source closely involved with the bankruptcy
process, Centro-Sul is a significant creditor of Olvepar. Aside
from the Ponto-Grossa-based unit, Olvepar holds another plant
with a daily capacity for 1,200 m tons of soy. The company owes
some US$100-million to banks and more than 2,000 farmers.


TEC TOY: Ends Bankruptcy Process
--------------------------------
Tec Toy S/A (formerly known as Tec Toy Industria de Brinquedos
S/A), a producer of videogames, games and electronic toys, is
finally emerging from the bankruptcy process, South American
Business Information revealed Wednesday. The company, controlled
by Dazcal family and Leo and Abe Kryss brothers, continues to
post negative results but has reduced its loss from R$10.968
million to R$547,000 in 2000. Net income increased from R$26.758
million to R$34.346million. Last November, the company launched
the video karaoke Sega, expecting to boost its results.



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C O L O M B I A
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AVIANCA: Reports Losses, Merges With Aces
-----------------------------------------
The Colombian airline Avianca ended the year 2000 with cumulated
losses of P$548,841mil and is under threat of liquidattion, South
American Business Information reported Wednesday. The airline is
in need of a US$210-million capital injection, a sum that is
being negotiated with the majority shareholder Valores Bavaria.
Avianca needs to settle its cash flow problems before it merges
with Aces, another Colombian airline, scheduled to take place on
April 19 of this year. The merger aims to form a holding company
to own shares in both companies, and the two airlines will
continue to operate with their current brand names. The company
to emerge from the partnership is supposed to offer extended
coverage and better services.

In a related story, Avianca now a new interim chairman as
Bernardo Quintero moves on to Ingenios Castilla y Rio Paila,
having left the airline with restructured finances and a partner
in Aces. Victor Machado will take over the helm of the Grupo
Bavaria-owned airline.



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M E X I C O
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GRUPO VITRO: To Benefit From Production Cuts At Libbey
------------------------------------------------------
The recent slowdown in U.S. economic activity has prompted
Vitrocrisa's U.S.-based partner Libbey to implement production
cuts. The reduction move should put Grupo Vitro at an advantage,
according to an Infolatina report on Wednesday. Vitrocrisa, a
subsidiary of leading Mexican glassmaker Grupo Vitro, will
reportedly step in to meet resulting supply shortfalls at Libbey.
As a result, Vitrocrisa exports this year reportedly will get a
$6million boost. The figure is equivalent to 2.5 percent of Grupo
Vitro's annual sales.

A previous TCR-LA article reported that Grupo Vitro will seek
shareholders' permission to refinance its liabilities by issuing
new debt. The group, showing some US$1.634 billion in total
liabilities at the end of 2000, wants to refinance about US$250
million.


HYLSAMEX: Seeks Partner To Share The Financial Pain
---------------------------------------------------
Mexican steel firm Hylsamex is stepping up efforts to save itself
from the financial problems plaguing the company by looking for a
partner, South American Business Information said Wednesday.
Currently, Hylsamex is in talks with 4 candidates, all of which
are said to be offering potential synergies. According to early
speculation, the firm to be chosen could be given control of the
company's operations. A sale of shares to an incoming partner may
take the form of partial sale or complete turnover depending on
the partner.

Hylsamex has been hit by the rising prices of energy needs, the
falling prices for steel worldwide and the shrinking of export
markets. Consequently, revenues dipped 14 percent in 2000 to
US$253 million while sales volume fell 4 percent to 2.7 million
tons of steel. The company even stopped production for a period
on certain production lines in Puebla and Monterrey in late 2000.
Hylsamex has restructured debt repayments with a syndicated loan
worth US$400 million.



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V E N E Z U E L A
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SIVENSA: Could Shutdown Orinoco Iron Plant
------------------------------------------
Siderurgica Venezolana Sivensa SA needs as much as $240 million
this year in order to continue operations at its Orinoco Iron
plant, Bloomberg reported Wednesday. Otherwise, it will be forced
to shutdown the plant and, as a result, could put the struggling
company at risk of bankruptcy. Orinoco is an equally owned joint
venture between Sivensa's subsidiary International Briquettes
Holding and Australia's BHP Ltd.. Continued operations at the
plant have already cost the companies $900 million although it
has barely operated at one-fourth capacity since it began
production in August 2000. Recent reports suggest that BHP was
considering closing the plant right away, a move that could cost
BHP more than $491 million and force financially-troubled Sivensa
into bankruptcy. The company is now in talks to restructure its
$245 million debt in hopes of returning to profitability.

Sivensa is struggling to repay the debt it accrued from buying
Siderurgica del Orinoco. The company fell into violation of
certain "ratios" in its debt agreement with banks earlier last
year, which caused the agreement to be amended Dec. 28. In
January, the company started a new round of negotiations with its
creditors.


SIVENSA: BHP To Write Off Investments At Orinoco Plant
------------------------------------------------------
A review conducted by Australia's BHP Ltd. at the Orinoco Iron
Plant showed that the Venezuelan hot briquetted iron plant won't
meet targets and doesn't justify further investment, prompting
BHP to take a charge of $410 million to write off its investment,
Bloomberg said yesterday.

"BHP will not invest further in this plant," said Ron McNeilly,
president of BHP Minerals. The action is appropriate given the
new information on the outlook for the investment and additional
spending, he said. However, BHP said it will keep its seats on
the board of the Orinoco joint venture (between Siderurgica
Venezolana Sivensa SA's subsidiary International Briquettes
Holding (IBH) and BHP) and help the project find alternative
sources of funding.

Losses at the Orinoco plant, which makes a concentrated iron
product used in steelmaking, widened fivefold in the three months
to December, prompting BHP last month to review the project.




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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