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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

            Monday, April 2, 2001, Vol. 2, Issue 64

                           Headlines


B R A Z I L

BANESTADO: Parana Government To Transfer Bad Debts
BESC: Brazilian Central Bank To Complete Restructuring
VARIG: Reports Losses In 2000 More Than Tripled From 1999
VARIG: Joins Aeroxchange, Aviation B2B e-Commerce Marketplace


C H I L E

ENAMI: To Decide Within A Month How To Invest Private Capital
GENER: Nearly 15 Firms Express Interest In Assets


M E X I C O

ATLANTICO: Financial Restructuring Secure With Looming Merger
GRUPO DINA: Employees To Strike If Wage Demands Not Met
HYLSAMEX: Alfa Chairman Defends Company's Modernization Project
UNEFON: TV Azteca, Azteca Holdings Complete Unefon Spin-Off
UNEFON: Initiates Process Of Buying Long-Distance Phone Company


V E N E Z U E L A

SIVENSA: IBH Reviews Orinoco Plant Financial, Operating Issues
SIVENSA: Plunges 41 Percent Amid Mounting Concerns
SIVENSA: Company Profile


      - - - - - - - - - -


===========
B R A Z I L
===========

BANESTADO: Parana Government To Transfer Bad Debts
--------------------------------------------------
The Parana government will transfer R$1.8 billion worth of bad
debts, which were assumed during the restructuring of Banco do
Eastado do Parana (Banestado), to its development agency.
According to South American Business Information Thursday, the
Parana government is to use the recovered debts to pay part of
the R$6 billion loan taken out from the central bank when it
originally conducted restructuring at Banestado.

Banestado was acquired by Itau last October in a deal worth
R$1.65 billion. The bank posted net profits of R$41.29 million
last year, compared to of R$535 million in 1999. Banestado's net
worth was reported at R$475 million last year, while total assets
amounted to R$6.5 billion. The bank is expected to invest R$70
million this year.


BESC: Brazilian Central Bank To Complete Restructuring
------------------------------------------------------
The Brazilian central bank is to complete the restructuring of
Banco do Estado de Santa Catarina, BESC, in prepration to auction
it by the end of this year, South American Business Information
said Thursday. So Far, restructuring of the bank has demanded
investments of R$780 million. The federal government, which
currently manages BESC, will provide the Santa Catarina
government with R$2.1 billion in credits to balance the bank's
financial situation. April 3 will be the deadline for firms
interested in advising on the bank's sale to submit proposals.

According to an earlier TCR-LA report, BESC, which reported
losses of R$64.4 million in 2000, down from losses of R$101.2
million in 1999, is set for auction because of lack of
investments in technology and a bloated workforce.


VARIG: Reports Losses In 2000 More Than Tripled From 1999
---------------------------------------------------------
Brazil's largest commercial airline Varig revealed its losses in
2000 more than tripled those of 1999. Last years numbers totaled
a loss of 179 million reais ($83 million), compared with 50
million reais ($23 million) in the previous year, Reuters
reported Thursday. The airline attributed mounting losses to its
debt of $1.3 billion, 80 percent of which is dollar denominated
requiring interest payments of $179 million. The real's loss of
value against the dollar worsened the debt burden last year.

"We have to resolve our debt situation because our operation is
going very well, with average seat occupation of 73 percent,"
said Manuel Guedes, head of investor relations. According to
Guedes, the company planned to reduce debt by selling part of its
newly created logistics company, VarigLog, and through cash flow.
Varig also said the rise in the price of jet fuel added 300
million reais ($140 million) to operating costs last year.

Varig is recovering from a crisis caused by falling passenger
numbers after the currency devaluation in 1999.


VARIG: Joins Aeroxchange, Aviation B2B e-Commerce Marketplace
-------------------------------------------------------------

Aeroxchange, the aviation industry's leading business-to-business
(B2B) e-commerce exchange, has added three more international
airline carriers to its growing fleet of airline affiliates.
These new affiliates have endorsed Aeroxchange as their preferred
aviation e-commerce exchange.

Varig Brasil, Icelandair and Thai Airways bring added diversity
to Aeroxchange while increasing the number of partner members to
26. The new affiliates gain immediate access to Aeroxchange's
first-to-market suite of services designed to reduce process time
and costs in the supply chain. Aeroxchange currently offers
strategic sourcing, inventory management, maintenance management
and rotable reliability tools from its www.aeroxchange.com site.
Future releases will continue to deliver solutions that integrate
buyers and sellers with supply chain management, e-procurement
and purchasing intelligence product suites.

"Partnership with these three leading international airlines
underscores Aeroxchange's commitment to build a robust, diverse
and global exchange," said R. Terrence Rendleman, Aeroxchange's
CEO. "Each airline contributes a unique quality to our forum and
furthers the establishment of Aeroxchange as the leader of the
business-to-business e-commerce marketplace for the global
aviation industry."

Varig Brasil is the largest airline company in Latin America,
with an average of 459 daily flights, transporting nearly 10
million passengers yearly. In addition to serving 34 cities
within Brazil, Varig flies to 19 countries on four continents. In
South America, Varig offers daily flights to Argentina, Bolivia,
Chile, Paraguay and Uruguay, and less frequent flights to
Colombia, Peru and Venezuela.

Aeroxchange is a multi-airline global e-commerce exchange with
founding member airlines in the Asia-Pacific region, North
America and Europe. Headquartered in Dallas, Aeroxchange formally
began operations in October 2000 and consists of founding members
Air Canada, All Nippon Airways, America West Airlines, Cathay
Pacific, FedEx, Japan Airlines, Lufthansa German Airlines,
Northwest Airlines, Scandinavian Airlines and Singapore Airlines.
Other confirmed participating airlines with equity participation
include Air New Zealand, Austrian Airlines Group and KLM Royal
Dutch Airlines. Non-equity participating affiliates include Egypt
Air, Gulf Air, Kuwait Airways, Mexicana Airlines, Middle East
Airlines, Qatar Airways, Saudi Arabian Airlines, Royal Jordanian,
Syrian Air and Virgin Atlantic. Aeroxchange is the first to
market functional product suites for the aviation marketplace and
offers comprehensive supply-chain management, e-procurement and
information services solutions for aviation goods and services.



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

ENAMI: To Decide Within A Month How To Invest Private Capital
-------------------------------------------------------------
Director Fernando Riveri disclosed in a Business News Americas
report published Thursday that the board of Chile's Enami has a
month to decide on how to invest private capital in the state
minerals processing company Estrategia. The company could sell
its Paipote copper smelter and Ventanas smelter/refinery,
however, that option is still subject to scrutiny. Separating
Enami's production activities from its role as promoter of the
small and medium scale mining sectors is a "done deal," according
to Riveri.

Enami, which posted a loss of US$29.3 million in 2000, up from
US$24.3 million in the previous year, recently announced that it
has officially registered with regulatory authorities to issue
bonds worth $140 million.


GENER: Nearly 15 Firms Express Interest In Assets
-------------------------------------------------
Sources at Chilean electricity generator Gener revealed that
between 10 and 15 companies have shown interest in the company's
water transportation and port assets, according to South American
Business Information Thursday. Interested bidders have until May
16, 2001 to submit their bids. Gener has a 79.87 percent stake in
Puerto Ventanas, 21.18 percent in Cabo Forward, 26.7 percent in
Agunsa and 26.01 percent in Compania Chilena de Navegacion
Interoceanica (CCNI).



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

ATLANTICO: Financial Restructuring Secure With Looming Merger
-------------------------------------------------------------
The financial restructuring of government-intervened Banco del
Atlantico is virtually secured. The process is the result of
efforts by Mexican Grupo Financiero Bital and Mexico's banking
protection institute, IPAB, who are widely believed to be heading
towards an agreement, South American Business Information
reported Thursday. Bital reportedly will inject $300 million of
fresh capital into the merged entity as soon as it reaches a
final agreement with IPAB. Bital, along with Atlantico, will move
on to complete a series of other commitments stemming from its
own capitalization.


GRUPO DINA: Employees To Strike If Wage Demands Not Met
-------------------------------------------------------
Failure to reach a wage agreement between the management and
labor union representatives of the struggling Mexican heavy-
vehicle maker Grupo Dina could result in a strike by the
employees, Infolatina revealed Thursday. Dina employees have
demanded a 40-percent increase in wages and have threatened to
lodge a strike on April 16 should the management fail to meet
their demands. However, company executives describe the idea of
meeting the current wage demand as financially suicidal. Dina
recently defaulted on a $6.5 million interest payment to
bondholders. At present, the plant is not producing trucks, so an
extended strike by workers could actually save the company money
in the near term.


HYLSAMEX: Alfa Chairman Defends Company's Modernization Project
---------------------------------------------------------------
Grupo Alfa Chairman Dionisio Garza Medina defended its subsidiary
Hylsamex's recent move of investing heavily in debt in order to
finance capital investment, Reforma/Infolatina reported Thursday.
Citing a Hylsamex plant in the northern city of Monterrey, Garza
Medina explained that if it hadn't been for the modernization of
the plant, Hylsamex now would be closed.

"We've got the debt problem but we're still operating," he added.

Last week, Hylsamex confirmed it was looking to sell either a
large minority stake or a majority stake in the company at the
instruction of its shareholders, who are seeking to maximize the
company's value as quickly as possible. Garza disclosed the
company had held informal talks with major steel-industry players
who could be interested in buying into the company.


UNEFON: TV Azteca, Azteca Holdings Complete Unefon Spin-Off
------------------------------------------------------------

TV Azteca, S.A. de C.V. (NYSE: TZA) (BMV: TVAZTCA), the second
largest producer of Spanish-language programming in the world,
announced today that the Company and Azteca Holdings have
completed the transactions with their Noteholders that were
required in order to enable TV Azteca to spin off its investment
in Unefon to its shareholders.

TV Azteca has received the formal consent of a majority of the
holders of its Senior Notes due 2007 and its Senior Notes due
2004, and Azteca Holdings has received the formal consent of a
majority of the holders of its Senior Secured Notes due 2002.
Accordingly, both TV Azteca and Azteca Holdings executed the
supplemental indentures governing their respective Notes on March
27, completing the solicitation process that began on February
12, 2001.

Subject to receiving these consents, TV Azteca had previously
authorized the granting of Rights to TV Azteca shareholders to
acquire a proportional interest in TV Azteca's shareholding in
Unefon. These Rights are exercisable in December 2002 at an
aggregate exercise price of approximately US$177 million. The
exercise date will be accelerated in the event of a strategic
sale of or tender offer for Unefon or if the Board of Directors
otherwise determines to do so.

Separate Rights attached to TV Azteca shares have also been
granted to acquire TV Azteca's interest in a newly formed
company, known by the trade name "Telecosmo," which will acquire
Unefon's 3.4 and 7 GHz frequency licenses. These Rights have an
aggregate exercise price of approximately US$32 million and will
become exercisable within four to six years. The exercise date of
these Rights will also be accelerated in the event of a strategic
sale of or tender offer for Telecosmo or if the Board of
Directors otherwise determines to do so.

TV Azteca will promptly pay consent fees to Noteholders who gave
their consent prior to the consent solicitation deadline. These
fees are the equivalent to 2 percent of the principal amount of
the Notes to holders of the Senior Notes due 2004 and of the
Senior Notes due 2007. Azteca Holdings will pay consent fees
equivalent to 0.5 percent of the principal amount of the Notes to
consenting holders of its Senior Secured Notes due 2002.


UNEFON: Initiates Process Of Buying Long-Distance Phone Company
---------------------------------------------------------------
Mexican wireless telephone company Unefon revealed in a Reuters
report released Thursday that it has commenced the process of
buying Mexican long-distance phone company RSL COM NET. The deal,
valued at $20 million, would yield Unefon 1,458 miles (2,353
kilometers) of fiber-optic network, an international gateway to
the United States and two call-switching centers, allowing it to
develop "a greater variety of wireless telephone services.

In a statement, Unefon, which is majority controlled by Mexican
broadcaster TV Azteca and the Saba family, said that the sale
cannot be completed until it is approved by both the anti-
monopoly agency as well as Mexico's federal telecommunications
commission (Cofetel).



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

SIVENSA: IBH Reviews Orinoco Plant Financial, Operating Issues
--------------------------------------------------------------

International Briquettes Holding (IBH) reported March 28, 2001
that it is reviewing financial and operating issues at Orinoco
Iron, its 50%-owned affliliate, with The Broken Hill Proprietary
Company (BHP), one of whose subsidiaries owns the other 50% of
Orinoco Iron. IBH and the BHP subsidiary also each own a 50%
interest in two other companies as part of the IBH/BHP joint
venture.

Orinoco Iron has constructed a hot briquettted iron (HBI) plant
in Puerto Ordaz, Venezuela. The facility has a design capacity of
about 2.2 million metric tonnes of HBI per year. The construction
phase of the project was completed in August, 2000. However, a
series of mechanical failures has delayed the buildup of
production and added to project costs. As a result of increased
costs, lower than planned production rates and depressed prices
in the international markets, actual revenues and cash flows have
been substantially below amounts originally planned. As a result
of these and related factors, IBH anticipates that Orinoco Iron
may not be able to comply with certain requirements in its credit
facilities. At present, one of four production trains is in
operation. HBI production for the train has been running at an
average rate of about 1,540 metric tonnes per day over the last
30 days, which represents about 92% of the design capacity of the
train.

As of December 31, 2000 the net book value of IBH's investments
in the IBH/BHP joint venture was about US$ 98.3 million and in
addition it has guaranteed about $312 million of Orinoco Iron's
borrowings under its credit facilities. Additional funding will
be required in order for Orinoco to continue existing operations,
place the remaining three production trains in operation (two of
which are now ready to begin production) and for working capital,
debt service, purchases of spare parts and other purposes. The
amounts required will depend in part on the commercial and
business strategy to be followed by Orinoco in the future, but
are estimated by IBH to range between $220 million and $240
million for 2001. No commitments currently exist to provide this
funding from IBH, BHP or others. No assurance can be given as to
whether, and if so on what terms, any additional financing for
Orinoco Iron can be arranged. The operating and financial
condition of Orinoco Iron is expected to continue to have
material adverse consequences for the financial condition,
business and prospects of IBH. In particular, IBH is considering
whether the value of its investment in the joint venture has been
impaired by the changed circumstances at Orinoco Iron.

In another development, IBH also reported that on Sunday, March
25, the IBH/BHP joint venture began a temporary shutdown of its
RDI plant, which is a separate HBI facility at Puerto Ordaz with
a design capacity of about 400,000 metric tonnes per year which
began operations in 1976. The closing is due to maintenance
requirements at the facility and unfavorable market conditions
for the plant's HBI production. No decision has been made as to
how long the plant will be closed.


SIVENSA: Plunges 41 Percent Amid Mounting Concerns
--------------------------------------------------
Mounting concerns over Venezuelan steelmaker Siderurgica
Venezolana Sivensa SA's financial health has caused the company's
shares to plunge 41 percent last week, Bloomberg reported
Thursday. Concerns were raised after its partner, Australia's BHP
Ltd., announced it would write off its investment in the Orinoco
iron plant. According to BHP, it would take a charge of $410
million to write off its investment in the Orinoco Iron hot
briquette iron plant, a 50-50 venture with Sivensa subsidiary
International Briquette Holding.

"Sivensa will now enjoy 100 percent of the fruits from Orinoco
Iron," said John Tumazos, an analyst with Sanford C. Bernstein &
Co. in New York. "The question is what they're going to taste
like."

Recent reports indicate that financially-strapped Sivensa needs
as much as $240 million this year in order to avoid closure of
Orinoco and to escape bankruptcy. The company announced that
lower-than-expected production levels at the plant and record low
international iron prices might force Orinoco to violate some
credit obligations. The plant has barely operated at one-fourth
capacity since it began production in August 2000.

"To be successful, you need production, a good sales price and a
good sales volume," Tumazos said. "It would take a miracle to
make them all work."


SIVENSA: Company Profile
------------------------
Name: Siderurgica Venezolana Sivensa SAICA-SACA
      Edeficio Torre America Piso-12
      Avenida Venezuela, Urb Bello Monte
      Caracas, Venezuela 1050

Telephone: (582) 7076145

Website: http://www.sivensa.com.ve


Type of Business: Siderurgica Venezolana Sivensa SAICA-SACA
(Sivensa) and its subsidiaries are engaged in
the manufacture, sale and export of steel
products, automotive parts, and wire products
for use in the construction, automotive and
petroleum sectors.

Industry:         Miscellaneous Metal Products Manufacturer

Employees:        7,312

Trigger Event: 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 in December 28.
   In January, the company started a new round of
   negotiations with its creditors.

Chairman:             Henrique Machado Zuloaga

CEO:                 Oscar Augusto Machado

Corporate Director:  HCTOR J. PEĽA
of Legal Affairs

Last TCRLA Headline DATE: Friday, March 30,2001, Vol. 2, Issue 63





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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