TCRLA_Public/010412.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

            Thursday, April 12, 2001, Vol. 2, Issue 72

                           Headlines



B R A Z I L

BANESPA: First 4 Months Under New Management Yield Good Results
CVRD: Close To Striking A Deal To Acquire Caemi And Ferteco


C O L O M B I A

PAZ DEL RIO: To Be Charged With Royalty Fee From Now On


M E X I C O

AEROMEXICO: Delta Wants Maximum Allowable Stake In Airline
CINTRA: Garcia Sees Poor Timing For Privatization
HYLSAMEX: Merger With Imsa Not Possible For Now
INTERMET: To Close Mexican Machining Plant
MATTEL: New Chief Executive Paid $12.5M While Jobs Go To Mexico
VITRO: Announces Preliminary First Quarter 2001 Results


P E R U

CARSA: Creditors Approve 1 Year Restructuring Extension


V E N E Z U E L A

SIVENSA: Orinoco Unit Defaults On $16.3M Payment Due March 30


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B R A Z I L
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BANESPA: First 4 Months Under New Management Yield Good Results
---------------------------------------------------------------
Brazilian bank Banco do Estado de Sao Paulo (Banespa) increased
its number of clients from 2.8 million to 3 million during the
first four months under Santander's management, South American
Business Information said Tuesday. During the period, the bank
also raised R$1.1 billion in new deposits and investment funds.
Banespa registered an increase in loans by 9 percent between last
November and March, to R$5.58 billion. Also, during that period,
consumer and leasing credits increased by 338 percent, to R$46
million. The bank was able to sell 230,000 life insurance
policies over that period, reaching a total of more than 1
million.

Recently, Banco Santander Central Hispano's successfully
concluded its public share offer for outstanding minority shares
of Banespa with 95 percent acceptance for ordinary shares and 96
percent for preferred shares. As a result, it now holds 98.3
percent of the shares with voting rights (ordinary shares) and
97.1 percent of the economic capital (preferred shares). The bid
was announced on December 28 for 67 percent of Banespa's total
capital, and took place between March 2 and April 2. The process
of allotting shares closed April 6 and financial settlement
concluded on April 11.


CVRD: Close To Striking A Deal To Acquire Caemi And Ferteco
-----------------------------------------------------------
In an effort to limit competition in the iron ore mining
industry, Cia Vale do Rio Doce (CVRD), the world's largest iron
ore exporter, is fighting hard to take control of Caemi Mineracao
e Metalurgia SA and Ferteco, according to a Sydney Morning Herald
report. Reportedly CVRD is close to striking a deal to acquire
the two companies, outbidding both BHP and Anglo American.

Caemi is the fourth largest mining company worldwide. It produced
27 million tons last year, but aims to lift that to 34 million
tons by the year 2004. Ferteco, on the other hand, is controlled
by Germany's Thyssen Krupp. Fertco's potential iron ore reserves
are estimated at 2 billion tons and its production capacity
amounts to 20 million tons.



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C O L O M B I A
===============

PAZ DEL RIO: To Be Charged With Royalty Fee From Now On
-------------------------------------------------------
Colombian steelmaker Acerias Paz del Rio, from now on, will be
charged a royalty fee for the exploitation of its iron, limestone
and coal mines, South American Business Information reported
Tuesday. Acerias is currently restructuring in accordance with
Colombia's law 550 for financially troubled companies. The
decision, which came from Consejo de Estado, will saddle the firm
with further production costs, complicating its future. Legal
experts involved in the case feel that Acerias has no right to be
the only beneficiary of the mines since a law was passed giving
those rights to Ecominas and Carbocol previously.

TCR-LA earlier reported that the Colombian steel company hopes to
secure partnership with a foreign investor in an effort to get
out from the financial troubles it has suffered over the last
year. Acerias posted losses amounting to P$48.818 billion in
2000.



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M E X I C O
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AEROMEXICO: Delta Wants Maximum Allowable Stake In Airline
----------------------------------------------------------
Delta Airlines, the United States' third-largest carrier,
revealed it wants to acquire a stake in Mexican airline
Aeromexico when the Mexican government puts it on the auction
block later this year, reported El Universal Tuesday. During a
visit to Mexico City last week, the airline's Executive President
Leo Mullin said that Delta is planning to acquire a 25 percent
stake (the maximum allowed under Mexican foreign investment laws)
in Aeromexico. Mullin met with Communications and Transport
ministry officials and Aeromexico executives during his visit.


CINTRA: Garcia Sees Poor Timing For Privatization
-------------------------------------------------
Timing is off for the scheduled privatization of Cintra,
according to Jorge Garcia, president of International Airlines
and Airport Consultants, in an Infolatina Tuesday edition. Garcia
said that Cintra is currently at its weakest, as high fuel prices
and low tariffs continue to hit the airline holding company. Fuel
costs have increased 34 percent during the final quarter of 2000,
while Cintra's yield fell by 9.2 percent. These two factors have
resulted to losses of 98.4 million pesos in the final quarter,
Garcia related, adding that the slowdown in economic growth this
year will only worsen the situation at the holding company.


HYLSAMEX: Merger With Imsa Not Possible For Now
-----------------------------------------------
According to the president of Grupo Imsa, Santiago Clariond, the
directors of the Monterrey-based steel and industrial
conglomerate have ruled out merging with fellow Mexican
steelmaker Hylsamex for now, Business News Americas related
Tuesday. However, they would not exclude a possible alliance
between the two at some point in the future. Before such a deal
could take place, Imsa suggests that Hylsamex must restructure
and reduce its debts. According to Clariond, although Hylsamex is
a magnificent company with an outstanding workforce, it has a
very serious debt problem. Imsa also pointed out the continued
involvement of Hylsamex in the multinational Amazonia consortium,
which has a major stake in loss-ridden Venezuelan steel company
Sidor. Hylsamex may have to cut its losses or divest of Amazonia
if it wants to merge with Imsa.

An Imsa-Hylsamex merger would take advantage of many synergies in
markets and distribution, and their value-added products
complement each other nicely, Clariond said. Together they could
focus on a wider range of specialized products for various
markets, he added.


INTERMET: To Close Mexican Machining Plant
------------------------------------------
INTERMET Corporation (Nasdaq: INMT) today announced that in the
company's continuing efforts to drive down costs and increase
efficiency, it plans to close its Reynosa, Tamaulipas, Mexico,
machining facility and substantially downsize a die-casting plant
in Pulaski, Tennessee.

The Reynosa Plant provides light-metal machining services for a
number of Mexican customers as well as for INTERMET's casting
operations. The facility employs 32 people. The Pulaski Plant
currently employs 178 people who manufacture and machine aluminum
and magnesium die castings.

Preparations for shutting down the Reynosa facility have begun
with a projected closing date in the second quarter of 2001.
According to Mike Ryan, INTERMET's Executive Vice President of
Operations, "Our decision to close the plant in Reynosa was based
on a strategy to reduce our fixed-cost structures and to remain
competitive in a global market. We will work with our customers
to redirect work to our other North American machining
facilities."

INTERMET plans to begin downsizing the Pulaski facility
immediately with significantly restructured operations scheduled
to be completed by the end of the second quarter of this year.
"After reviewing the Pulaski Plant's product and customer mix, we
concluded that it was in the company's best interest to
concentrate on core products," said Ryan. "We will outsource or
eliminate products that do not fit within our aggressive strategy
for future earnings growth. After restructuring, Pulaski will be
a more efficient and focused plant."

Ryan continued: "For the year 2001, these actions will have no
net effect on the company's financial performance. However, we
expect the efficiencies gained will have a positive impact on the
long-term profitability of INTERMET."

Ryan also said that while these decisions are always difficult,
"the need to remain competitive in a very demanding and rapidly
evolving industry requires us to take these measures."

With headquarters in Troy, Michigan, INTERMET Corporation is a
full- service supplier of powertrain, chassis/suspension and
structural components to the worldwide automotive industry. The
company has more than 7,000 employees at facilities located in
North America and Europe. More information about the company is
available on the Internet at www.intermet.com .


MATTEL: New Chief Executive Paid $12.5M While Jobs Go To Mexico
---------------------------------------------------------------
Toy maker Mattel revealed it paid its Chief Executive Robert
Eckert more than $12.5 million in cash and other compensation
last year, AP Business News reported Tuesday. In addition, the
company admitted it loaned the top executive $5.5 million, all of
which, plus interest, will be forgiven if he stays at the company
through May 18, 2004. These figures were released in the
company's proxy statement issued Monday, just days after the
company disclosed plans to close its last U.S. factory and move
980 jobs to Mexico.

Eckert joined Mattel in February last year after Jill Barad, who
was blamed for Mattel's ill-fated purchase of software maker
Learning Co. for $3.5 billion, was forced to resign. The unit has
been bleeding money until Mattel practically gave it away last
year, but not before analysts blamed the division for forcing
company stock down to five-year lows. Last fall, Mattel announced
a company-wide restructuring plan, which will see the dismissal
of several employees beginning this June.


VITRO: Announces Preliminary First Quarter 2001 Results
-------------------------------------------------------
Vitro, S.A. de C.V. (BMV: VITROA; NYSE: VTO) today announced
selected unaudited preliminary results for the three-month period
ended March 31, 2001.

Consolidated net sales for the first quarter were Ps$6,455
million, compared with Ps$6,397 million in the comparable quarter
last year. In U.S. dollars, consolidated net sales for the
quarter rose YoY by 5.6 percent to US$672 million. Main drivers
of these results were the positive performance of the businesses
of Flat Glass and Acros-Whirlpool, which offset the decline in
sales at the other businesses.

For the quarter, the Company posted consolidated EBIT of Ps$694
million and EBITDA of Ps$1,245 million, representing YoY declines
of 19.4 percent and 9.9 percent, respectively. In U.S. dollars,
consolidated EBIT and EBITDA for the quarter were US$72 million
and US$129 million, respectively, representing a decline of 15.0
percent and 5.2 percent, respectively, when compared with the
same period for the previous year. Even though operating margin
was relatively unchanged when compared with the fourth quarter of
2000 and EBITDA margin improved quarter-over-quarter, operating
and EBITDA margins declined YoY.

An overview of the operating results for each of the five
businesses, starting with the three core business units of Flat
Glass, Acros Whirlpool and Glassware, follows.

Flat Glass

Sales for the quarter rose mainly in connection with additional
sales from Harding Glass, which started to consolidate during
IIQ'00, and volume growth in the construction industry, which
partially offset the slight decrease experienced in the auto
segment. The YoY decline in EBIT resulted from a combination of
higher YoY energy costs, price and volume adjustments in some
segments of the auto industry and some additional administrative
expenses that resulted from the Harding acquisition.

Acros Whirlpool

Acros Whirlpool continued to enjoy sales growth in the first
quarter, as volumes maintained a positive trend in the domestic
market, especially in the refrigerator and washer segments, while
exports to Central America and the Caribbean also posted a
significant improvement. YoY operating margins were nearly flat
notwithstanding the continued competitiveness of the environment.

Glassware

Sales for the quarter decreased mainly as a result of reduced
demand, particularly in the industrial segments. A combination of
lower sales from Crisa's customers to their final consumer during
the quarter, and lower purchase orders as a result of reduction
on inventories accumulated during IVQ'00, magnified the effect on
sales. The decline in margins for the quarter was basically the
result of a YoY higher distribution costs, and reduced fixed cost
absorption as a result of lower sales.

Glass Containers

Consolidated net sales for the quarter declined YoY mainly as a
result of a capacity expansion at one of the Company's vertically
integrated beer customers and decreases in the food and
pharmaceutical segments. With respect to profitability, EBIT and
EBITDA declined YoY in absolute terms mainly in connection with
price pressures. However, it should be noted that for each of the
last two quarters, EBIT and EBITDA margins improved in excess of
40 and 100 basis points, respectively.

Diverse Industries

The decline in sales for the quarter was mainly due to the
ampoules business, which suffered a YoY contraction mostly as a
result of a decline in the demand in the domestic sector, and the
aluminum cans business, as a result of a decrease in domestic
consumption during the quarter. EBIT for the quarter declined
primarily as a result of the strength of the peso. The increase
in natural gas prices continued to affect YoY comparisons,
particularly in the soda ash operations.



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P E R U
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CARSA: Creditors Approve 1 Year Restructuring Extension
-------------------------------------------------------
Restructuring at the appliance retail chain Carsa will be
extended for another year following approval from creditors,
South American Business Information said in its report Tuesday.
The restructuring plan was initially approved in July 2000. Under
the terms of the plan, Carsa has been meeting its obligations and
honoring debt payments. Out of the US$50 million in debts owed
over a 15-year term, the company is expected to pay US$1 million
this year.

Carsa's largest creditors include BBV Banco Continental, Wiese
Sudameris, Banco Sudamericano and Banco de Comercio. The chain
generated sales of US$27 million in 2000 and predicts reaching
US$33 million in 2001. Currently, it has 41 branches in 26 cities
of Peru.



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

SIVENSA: Orinoco Unit Defaults On $16.3M Payment Due March 30
---------------------------------------------------------------
Steelmaker Siderurgica Venezolana Sivensa SA said its Orinoco
Iron unit missed a $16.3 million loan payment, thereby defaulting
on a $625 million loan, Bloomberg reported Tuesday. The payment
was due on March 30.

"Orinoco Iron's lenders under the facility sent a notice of
default but they have not yet declared the loans under the
facility to be due," Sivensa said in a press statement. Orinoco
Iron plant is a 50/50 joint venture between Sivensa's subsidiary
International Briquettes Holding (IBH) and Australia's The Broken
Hill Proprietary Company (BHP).

Sivensa, struggling under the weight of a hefty debt and
historically low steel prices, had been counting on Orinoco Iron.
If the Orinoco Iron project were be forced to close, it would be
deal a serious blow to Sivensa. The project is reportedly in dire
need of a $240-million cash infusion. Venezuela's state heavy
industries holding company, Corporacion Venezolana de Guayana,
earlier said it would help Sivensa in its search for fresh
capital funding and partners for Orinoco Iron after BHP wrote off
its A$410 million investment in the plant.




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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