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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, April 13, 2001, Vol. 2, Issue 73

                           Headlines



B R A Z I L

CESP: Bidding Terms Due Out April 17
CVRD: To Divest Assets in Yet Another Paper and Pulp Company
PAO DE ACUCAR: Retail Trade Chain Restructures


C H I L E

GENER: Rating Lowered to 'BBB'; Creditwatch Remains
INVERCAP: Sells Assets to Revert Losses


C O L O M B I A

DISTRAL: To Function Until After Easter at Least


E C U A D O R

EMELEC: Government Will Bear US$100M Debts of Power Distributor


M E X I C O

AZTECA: Posts Losses; Transport Ministry Prohibits Operations
HYLSA: To Keep Puebla Plant Open Against The Odds
SERFIN: Mancera Ernst & Young Discards BSCH's Claims


V E N E Z U E L A

EDC: Market Conditions Delay Eurobond Issue


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B R A Z I L
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CESP: Bidding Terms Due Out April 17
-------------------------------------
Bidding terms for the sale of the Brazilian power utility Cia.
Energetica de Sao Paulo (Cesp), which is slated to go on the
auction block on May 16, will be made public on April 17
according to Sao Paulo state energy secretary Mauro Arce in a
South American Business Information Tuesday edition.  Arce said
that no lawsuit currently challenges the impending sale of CESP,
which carries a minimum price tag of R$1.739 billion.

The Sao Paulo government's initial attempt to sell the company in
December failed owing to a lack of bidders who backed out over
concerns of pending environmental and financial issues.


CVRD: To Divest Assets in Yet Another Paper and Pulp Company
------------------------------------------------------------
As part of its strategy to focus on core mining activities, the
Brazilian mining company Cia. Vale do Rio Doce (CVRD) should
reach a deal to sell its ownership in the paper and pulp company
Cenibra by the end of the month, sources close to the deal said
in Tuesday's edition of the Brazil Financial Wire.

Sources say Japan Brazil Paper and Pulp Resources (JBP) should
exercise its pre-emptive right and acquire the 51.48% Cenibra
stake held by CVRD, who had sold its position in yet another
local paper and pulp company earlier this year.


PAO DE ACUCAR: Retail Trade Chain Restructures
-----------------------------------------------
Pao de Acucar group expects to reduce costs that had increased by
39% over the last quarter of 2000. Part of its strategy to reduce
its swelling costs of R$449 million is to hire outside
professional assistance. Accordingly, Companhia Brasileira de
Distribuicao (CBD) or Pao de Acucar group retained the consulting
firm of McKinsey, a Tuesday edition of the South American
Business Information said.

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C H I L E
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GENER: Rating Lowered to 'BBB'; Creditwatch Remains
---------------------------------------------------
Standard & Poor's today lowered its rating on Gener S.A. to
triple-'B' from triple-'B'-plus. The rating remains on
CreditWatch with negative implications, where it was placed on
Dec. 28, 2000, as a result of AES Corp.'s (double-'B'/Watch Pos)
acquisition of 61.57% of Gener on the Santiago stock exchange for
US$841 million. AES subsequently purchased an additional stake on
Jan. 2, 2001, via the exchange of 28.9 million ADRs of Gener for
AES common stock, raising its holdings in Gener to 96.5%.Empresa
Electrica Guacolda S.A. (triple-'B'-minus/Watch Neg/--) which was
simultaneously placed on CreditWatch with Gener, also remains on
CreditWatch.

AES and Gener are in the process of proposing a structure that
would insulate Gener from the weaker credit of AES. Per Standard
& Poor's policy, strong insulation would likely permit the
separation of a strong subsidiary from a weaker parent by one
rating category. Thus, a triple-'B' rating is the expected
ceiling for Gener's rating. Gener has indicated that its goal is
to maintain a minimal, investment-grade rating and thus, Standard
& Poor's expectation is that the final rating outcome will more
likely be a triple-'B'-minus. With no insulation, however,
Gener's rating would fall to that of AES', or double-'B'.

Standard & Poor's expects to resolve the CreditWatch listings for
Gener and Guacolda within a month.  


INVERCAP: Sells Assets to Revert Losses
-----------------------------------------
The Chilean holding company Invercap is looking at selling some
assets in an attempt to revert recent losses. Last year the
company posted a loss of US$2.9 million last year, just half of
the previous year's figure. Assets slated to be sold off include
the company's 10% stake in polypropylene manufacturer Petroquim,
according to Invercap president Roberto de Andraca in a Business
News Americas Tuesday report.  Andraca, continues to be hopeful
that the company could break even this year.


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

DISTRAL: To Function Until After Easter at Least
-------------------------------------------------
The troubled Colombian industrial group Distral Industrial will
weather it out until at least after Easter, a Tuesday edition of
the South American Business Information said.  Distral, with
debts totaling US$23 million, failed to reach an agreement with
its creditors at their April 4 meeting. This despite an attempt
by the company to prepare an acceptable restructuring deal prior
to the meeting.

Distral, who has been suspended in production terms since June of
last year, has been taken over by Fabricaciones Metalmecamicas
Andrinas y del Caribe (FMA) where several ex-Distral executives
are now employed. Unions Sintrame and Sintraindumecol shunned
foreign investors who were willing to put up Pesos $2.6 billion
and re-hire ex-Distral employees in favor of running the troubled
firm themselves.


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E C U A D O R
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EMELEC: Government Will Bear US$100M Debts of Power Distributor
---------------------------------------------------------------
The Ecuadorian government will not shoulder the whole US$279.3
million-debt of power distributor Emelec with power generating
companies, according to a Wednesday report from the South
American Business Information.  The government will only take
responsibility for the US$100 million-debt, which was incurred
when Emelec was under intervention by the electric council
Conelec from March to November 2000.  Former Emelec owners are to
take full responsibility for the remaining debt, which was
largely accumulated due to subsidies.


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M E X I C O
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AZTECA: Posts Losses; Transport Ministry Prohibits Operations
-------------------------------------------------------------
As a result of the Mexican transport ministry's prohibition to
start operations, the new Mexican airline Linea Areas Azteca has
already posted over US$1.7 million in losses for March, the South
American Business Information reported Tuesday.  The ministry has
yet to permit Azteca to start up. The company had already rented
space at airports as well as planes and is already paying a staff
of 250 workers.


HYLSA: To Keep Puebla Plant Open Against The Odds
-------------------------------------------------
Mexican steel group Hylsa-- who has been hit by rising natural
gas prices, unfair foreign competition and a slump in steel
prices-- is keeping its Xoxtla, Puebla plant open despite the
world sector depression, a Tuesday edition of the South American
Business Information said.  The company plans to re-trench and
battle through at Puebla, including installing a new US$110
million laminating mill which could more than double its
production of steel bars.

Hylsa has partially suspended its production of sponge iron, a
vital raw material for steel production, since September of last
year.


SERFIN: Mancera Ernst & Young Discards BSCH's Claims
--------------------------------------------------
Mancera Ernst & Young rejected claims made by Spain's BSCH over
the price of the Mexican bank Serfin since its May 23
acquisiiton. The Mexican banking savings protection institute
IPAB explained their position in a Tuesday report of the South
American Business Information.  BSCH sought a reduction in the
price it had originally paid for the Mexican bank siting
discrepencies in accounting after the deal was finalized. IPAB
had set aside some Pesos$2.405 billion should the legal offices
grant the Spanish bank's claims.


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V E N E Z U E L A
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EDC: Market Conditions Delay Eurobond Issue
--------------------------------------------
As a result of market volatility stemming from Argentina and
Turkey, Venezuela's leading private electricity firm Electricidad
de Caracas (EDC) delayed a 100-150 million issue of eurobonds
South American Business Information said Tuesday.  Resumption of
the offering could very well take place after the market
stabilizes.  EDC reportedly will not change the duration or the
pricing of the issue.





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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