/raid1/www/Hosts/bankrupt/TCRLA_Public/010417.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

            Tuesday, April 17, 2001, Vol. 2, Issue 75

                           Headlines



B R A Z I L

BRAZILIAN RESOURCES: Gets Aneel Approval For SD II Project
BRAZILIAN RESOURCES: Settlement Reduces Current Liability  
CETENCO ENGENHARIA: Increases Losses By 7 Percent


M E X I C O

CHRYSLER: May Launch Ad Campaign Saying Company "Not Dead Yet"
INTERMET: First-Quarter Results; Sales, Net Income Off Sharply
MOTOROLA: Posts Losses Of $206M 1Q01, Blames Slow Handset Sales


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B R A Z I L
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BRAZILIAN RESOURCES: Gets Aneel Approval For SD II Project
----------------------------------------------------------
A subsidiary of Brazilian Resources, Inc. ("BRAZILIAN") now has a
published approval from ANEEL for the project design report and
feasibility study on its proposed Sao Domingos II (SD II)
hydroelectric plant, according to Market News Publishing report
released Wednesday. ANEEL is Brazil's federal agency of electric
energy.

"The ANEEL approval guarantees exclusivity on our site. We can
now conclude negotiations on the power purchase agreement and
project financing, while moving to the next stage of project
development," said Daniel R. Titcomb, President and CEO of
BRAZILIAN.

In addition to the SD II project, BRAZILIAN has been pursuing the
development of a 12 MW greenfield site, and the acquisition and
expansion of several small operating hydroelectric plants.
Management believes this process may be expedited by a recent
announcement by the Brazilian government to encourage development
of new electric power generators.

Last year, the company reported losses from operations, negative
operating cash flow, significant deficiency in working capital
and default on certain debt agreements due to the acquisition of
gold properties. In order to keep it operating, the company
implemented plans to develop energy and infrastructure interests
in Brazil, particularly hydroelectric and telecommunications.


BRAZILIAN RESOURCES: Settlement Reduces Current Liability  
---------------------------------------------------------------
Brazilian Resources, Inc., a U.S.-based junior exploration and
development company, has extinguished debentures to reduce its
current liabilities by US$2.24 million as a result of a favorable
lawsuit settlement, according to a CCN Disclosure report released
April 10. Additionally, the company has eliminated a 2 percent
royalty payment on future production from its 100-percent-owned
Sabar gold property, sited in Quadriltero Ferrfero (Iron
Quadrangle), Brazil's most prolific mining camp.

The following is a brief history of the events leading to the
resolution of Jacobina Mineracao e Comercio Ltda. and William
Resources Inc. v. Brazilian Resources (the civil action).

William Resources (currently known as William Multi-Tech Inc.)
and Brazilian entered into a joint venture agreement in July,
1995, to acquire and explore the Sabara property in Minas Gerais,
Brazil.

William assigned its interest in the joint venture to its
subsidiary, Jacobina Mineracao e Comercio Ltda., and in 1997,
Brazilian purchased all of the interest of Jacobina and William
in the joint venture to increase its ownership in the Sabara
property to 100 per cent.

Under the purchase and sale contract with Jacobina, Brazilian
issued a series of 8 percent debentures totalling $2.75-million
(U.S.) with maturity dates from February, 1997, to June, 2001.
Three debentures totalling $1-million (U.S.) from this series
were paid in full. The remaining two debentures in the series
totalling $1.75-million (U.S.) (the debentures) had certain
conversion features, and were amended to mature in June, 1999. In
addition, Jacobina received a 2-per-cent net smelter royalty (the
NSR) payable after the first 50,000 ounces of gold production
from zones A and B of the Sabara property. Brazilian retained an
option to purchase the NSR for $1-million (U.S.) on or before 90
days after the commencement of commercial production.

Subsequent to the June, 1997, closing of the purchase and sale
agreement with Jacobina, Brazilian determined that there were
certain material errors, omissions or inconsistencies regarding
the purchase that entitled Brazilian to refuse to pay the
remaining $1.75-million (U.S.) principal or any accrued interest.
In December, 1998, William and Jacobina filed the civil action
against Brazilian in the United States District Court for the
District of New Hampshire, alleging, among other things, that
Brazilian was obligated to make payments under the debentures. In
January, 1999, Brazilian filed counterclaims against William and
Jacobina alleging, among other things, breach of contract, breach
of duty of good faith and fair dealing, and breach of fiduciary
duty.

Brazilian, certain of its officers, and William and Jacobina, and
certain of their officers and creditors, have entered into a
settlement agreement and release in which the debentures, marked
discharged, and all rights under the NSR are to be returned to
Brazilian. All parties have agreed to dismiss the civil action
and the counterclaims.

According to Jeffrey C. Kirchhoff, chief financial officer of
Brazilian: "As of Dec. 31, 2000, there was $490,000 (U.S.) of
accrued interest on the books related to the $1.75-million (U.S.)
debentures, so this settlement reduces our current liabilities by
$2.24-million (U.S.). After careful re-evaluation of the Sabara
property, Brazilian has been aggressively seeking operators as
joint venture partners. We expect the cancellation of the NSR and
its $1-million (U.S.) option to make the property more
marketable. Furthermore, management spent considerable time
during the first quarter of 2001 renegotiating other debt, mostly
related to our mining properties. The successful resolution of
this matter, eliminating the uncertainty and expense of further
litigation, should allow us to conclude with other creditors, and
expedite new business development."


CETENCO ENGENHARIA: Increases Losses By 7 Percent
-------------------------------------------------
Cetenco Engenharia, currently operating under bankruptcy
protection from creditors, saw its losses rise by 7 percent year
over year in 2000 to R$120,000, Gazeta Mercantil reported
Wednesday. Last year, the company's net revenue dropped from
R$14.719 million in 1999 to R$96,000, while costs of sales
services also dropped from R$12.654 million to R$407,000. Company
Accountant Jose Luis da Cruz attributed negative results to the
termination of work on the Tatui-Itapetininga highway in Belm,
Para state, in 1999. The company also posted an operating loss of
R$8.263 million, compared to an operating surplus of R$635,000 in
1999. According to Cruz, this loss is partly due to the company's
decision to adhere to the rules set up by Refis, a government tax
revenue recovery program.



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M E X I C O
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CHRYSLER: May Launch Ad Campaign Saying Company "Not Dead Yet"
--------------------------------------------------------------
The struggling unit of DaimlerChrysler AG, Chrysler, is planning
to launch a series of ads, designed by PentaMark, a unit of
Omnicom Group Inc., to prove that the company is still "alive and
kicking," Wall Street Journal reported Thursday.

George Murphy, Chrysler's new senior vice president of global
brand marketing and formerly with Ford Motor Co., favors the new
ad campaign but according to him, "The question is not if we do
it, but when we do it and how we do it. Now it's a debate: How
aggressively do you go after it?"

Meanwhile, James Schroer, also a Chrysler global sales and
marketing executive hired from Ford, suggests that the ads show
Chrysler dealing with its current problems while projecting
future growth. Commenting on potential buyers concerns over
whether Chrysler will survive, Schroer said, "This perception is
an enormous problem for us. If people think you're going away,
then they go somewhere else."


INTERMET: First-Quarter Results; Sales, Net Income Off Sharply
--------------------------------------------------------------
INTERMET Corporation (Nasdaq: INMT), a leading manufacturer of
cast-metal automotive components, today reported first-quarter
2001 sales of $224 million, down $78 million, or 26 percent,
compared with 2000 first-quarter sales of $302 million. The sales
shortfall is attributed primarily to significantly reduced
production volumes by North American automakers. Net income for
the first quarter was $339 thousand, or $0.01 per diluted share,
compared with $9.5 million, or $0.37 per diluted share, in the
first quarter of 2000. INTERMET's applicable tax rate for the
quarter was high reflecting non-deductible goodwill.

Chairman and Chief Executive Officer John Doddridge said that he
was pleased with INTERMET's performance in a particularly
difficult first quarter. "Although North American automotive
sales were reasonably good, inventory adjustments by the auto
companies significantly reduced vehicle builds, particularly at
our largest customer, DaimlerChrysler, which substantially
reduced our sales. Additionally, with our New River Foundry
capacity back on line plus the added capacity at several other
plants fully operational, our composite North American plants ran
at about 60-percent capacity during the first quarter. In our
capital-intensive business, to achieve breakeven with these
capacity-utilization levels in North America is a tribute to the
efforts of the men and women of INTERMET. Fortunately, our
European plants are still operating close to capacity.

"We remain hopeful that the North American slowdown will be
short-lived and the second half of the year will improve;
however, we continue to prepare for the worst in the event the
downturn continues for a longer period of time. We have reduced
our North American employment by 22 percent, while focusing on
cash flow and cost reduction. In certain cases, we are advising
our customers that on a number of low-margin products, there must
be price increases or we will request a resourcing of their
parts," Doddridge said. Earlier this week, INTERMET announced the
closing of its Mexican machining plant and the downsizing of a
die-casting plant in Tennessee, affecting about 120 people. As a
result, approximately $20 million in sales will be moved to other
INTERMET facilities or resourced. The company has taken a
restructuring charge against first-quarter earnings of $0.02 per
diluted share after taxes. Additionally, two other plants are
under consideration for closing or downsizing later this year,
according to Doddridge. "These measures will help us 'weather'
the downturn, and as we substantially lower costs, it provides an
opportunity to better position the company for a return to strong
profit growth as we emerge from the slowdown," he said.

"Also, as we have previously disclosed, energy costs,
particularly natural gas and propane, are affecting INTERMET and
our entire industry. We have aggressively implemented all
possible measures to reduce our energy consumption. Although
prices dropped slightly in February and March from the January
high, we are still trending toward $15 to $18 million in
additional annual energy costs compared with last year. The
application of an energy surcharge to our products thus far has
been met with limited success, but we continue to believe that
INTERMET and others in our industry ultimately must pass these
costs on to the end customer," said Doddridge

E. R. "Skip" Autry, Jr., Vice President of Finance, said that
INTERMET's $200-million term loan due in June will be replaced
with another loan or loans of a similar amount. "We are currently
in negotiations with lending institutions," he said. Autry also
pointed out that INTERMET's debt is up from end-of-year 2000
primarily because of $87 million cash on hand. "We also expect an
insurance payment of approximately $20 million early in the
second quarter, pushing our cash balance even higher. We plan to
use this cash to pay down debt following the arrangement of a new
loan agreement."

Doddridge said the Alexander City Foundry is now running better,
but still losing money. "We continue to work with our customers
to resolve many issues including pricing. There have been signs
of positive movement in this regard that could rule out the
planned discontinuation of certain part numbers," he said.

"For the second quarter, we should see some improvement in our
sales now that OEM vehicle inventories are in better shape.
During uncertain economic times, forecasting volumes is difficult
at best. However, based on current auto sales trends, we
anticipate revenues of $247 million for the second quarter and we
should achieve earnings per share in the range of $0.14 to
$0.18," said Doddridge.


MOTOROLA: Posts Losses Of $206M 1Q01, Blames Slow Handset Sales
---------------------------------------------------------------
Motorola reported first-quarter operating losses of $206 million,
or 9 cents a share, about 2 cents a share more than analysts
expected the company to lose, according to a report in the
Wireless Today released Thursday. In addition, the Schaumburg,
Ill.-based company also reported sales of $7.8 billion, down 11
percent from sales of $8.8 billion in its previous first quarter.
The company blamed its loss on lackluster handset and
semiconductor sales, in addition to the recession affecting many
high-tech vendors.

"We see a continued downturn in the U.S. economy beginning to
spill over to the rest of the world," said Christopher Galvin,
Motorola chairman and CEO.

Motorola is planning to reduce staff by 26,000 and to cut capital
spending from last year's $4.1 billion, to $1.4 billion. Since
December, it has announced 22,000 job cuts, with 13,000 positions
eliminated in the first quarter. Motorola is tightening its
wireless business by shutting down some plants or selling its
manufacturing operations to other companies. Nothing less is
expected for the company to reverse its financial performance.

In a previous TCR-LA report, Motorola strongly denied a published
report that it might soon face serious liquidity problems
servicing some $6.4 billion of outstanding commercial paper as of
December 31, 2000. According to the company, it had cash and cash
equivalents of $4.4 billion and $4.1 billion of outstanding
commercial paper. Through April 6, 2001, Motorola had more than
$4.5 billion in cash and cash equivalents and outstanding
commercial paper had been reduced to $3.1 billion.




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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