TCRLA_Public/010420.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

            Friday, April 20, 2001, Vol. 2, Issue 78

                           Headlines



B O L I V I A

EL MUTUN: Short List Of Banks To Manage Auction Due Next Week


B R A Z I L

CESP: High Short-Term Indebtedness Poses Threat To EDP
CESP: EDF Stands By Its Decision To Bid
PAO DE ACUCAR: Posts 20.7 Percent Increase In 1Q Net Sales
PSINET: Possible Fate Harms Brazilian Subsidiary
PSINet: Announces Fourth Quarter Results, Predicts Cash Crunch


C O L O M B I A

PAZ DEL RIO: Posts Negative Results In 2000


D O M I N I C A N   R E P U B L I C

CDE: Senators Say Anti-Privatization Case Politically Motivated


M E X I C O

CINTRA: Probable Sell-off Via Public Offerings
TELEVISA: To Release Details Cost-Cutting Plan By Month's End


P E R U

CONSERVERA ISLAY: Creditors Will Meet To Decide On Restructuring


T R I N I D A D   &   T O B A G O

CARONI LTD.: Incurs More Losses Due To Temporary Shutdown


V E N E Z U E L A

DISTRIBUIDORA: In Serious Financial Trouble
SIVENSA: Government Throws Full Support To Save Orinoco


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B O L I V I A
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EL MUTUN: Short List Of Banks To Manage Auction Due Next Week
-------------------------------------------------------------
Bolivia's state mining corporation Comibol is expected to release
next week the list of investment banks eyeing to take charge in
the auction of the dormant state-owned El Mutun iron ore mine and
steel complex, Business News Americas reported Wednesday. Comibol
spokesperson Rolando Ibanez revealed that five banks have already
expressed their interest. He also added that last-minute
corrections are being made to the agreement terms.

Terms of the engagement will include banks completing work on the
auction within five months. If everything remains on schedule,
the contract to operate El Mutun should be awarded January-
February 2002, Ibanez related.



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B R A Z I L
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CESP: High Short-Term Indebtedness Poses Threat To EDP
------------------------------------------------------
Portuguese power company Electricidade de Potugal (EDP) still has
its eyes set on Brazil's power utility Cia. Energ,tica de Sao
Paulo (CESP), EDP president Francisco S nchez said Wednesday in a
Brazil Financial Wire report. However, CESP's high short-term
indebtedness is representing a potential problem to EDP.

"The debt remains a no-no. If conditions are the same as in the
previous auction, things will be difficult," S nchez stressed.


CESP: EDF Stands By Its Decision To Bid
---------------------------------------
The French EDF (Electricite de France) will stay firm with its
decision to bid for CESP Parana, Sao Paulo state's electricity
generator, South American Business Information reported
Wednesday. EDF's announcement came after a new notice was
released stating that the successful bidder for CESP will will
have to expand by 16.5 percent its installed capacity, an
increase over the former 15 percent requirement. According to
Michel Gaillard, EDF representative, the increase over the R$2
billion future investments will not harm EDF's plans.

CESP is slated for privatization this coming May 16 on the Sao
Paulo stock exchange (Bovespa) and the minimum price for a 38.67
per cent stake in the company has been set at R$1.739 billion, or
R$48 per 1,000 share lot. According to Aneel, the Brazilian
government's regulatory agency for the electricity sector, the
new controller will have to increase the installed capacity at
the Sergio Motta power plant (former Porto Primavera plant) by
16.5 per cent to 6,825 megawatts over an eight-year period.


PAO DE ACUCAR: Posts 20.7 Percent Increase In 1Q Net Sales
----------------------------------------------------------
Pao de Acucar, Brazil's biggest national retailer, announced
Wednesday 20.7 percent growth on its total first quarter sales.
The results came amid a "lower-than-expected" environment by the
retail sector, Reuters said in a report.

Also known as Companhia Brasileira de Distribuicao (CBD), the
company managed to register net sales of 1.97 billion reais ($903
million), which represented same stores growth of 1.6 percent.

In a TCR-LA previous report, the company said it expects to
reduce swelling costs of R$449 million, and is to hire
professional assistance from outside. The company reportedly has
retained the consulting firm of McKinsey.


PSINET: Possible Fate Harms Brazilian Subsidiary
------------------------------------------------
The possible fate of the largest independent U.S. Internet
service provider PSINet, which is currently facing bankruptcy
proceedings, is putting operations at its Brazilian subsidiary at
risk, South American Business Information reported Wednesday.
PSINet do Brasil went into court against the former partners of
access provider Openlink requesting the suspension of a
restraining order proposed by the Openlink's former owners. The
founders of Openlink recently obtained a court order giving them
permission to seize the assets of PSINet's Brazilian subsidiary
to guarantee payment of US$1.8 million which represents the last
installment (20 percent) of the sale of the provider to PSINet.
PSINet bought Openlink for US$9.4 million in 1999 under a term
installment agreement.

PSINet admitted on Tuesday that it faced $3.7 billion in total
debt and was "likely" to file for bankruptcy.


PSINet: Announces Fourth Quarter Results, Predicts Cash Crunch
--------------------------------------------------------------
PSINet Inc. (NASDAQ: PSIX) announced results for the fourth
quarter of 2000. While the results of the fourth quarter, as
described in further detail below, may show some indicators of
growth, there continue to be rapidly changing circumstances that
are negatively impacting the Company. As previously announced,
the Company's cash, cash equivalents, short-term investments and
marketable securities, including the proceeds from the sale of
PSINet Transactions Solutions on April 3, 2001, are not expected
to be sufficient to meet the Company's anticipated cash needs.
The Company and its advisors continue to analyze and pursue
certain financial and strategic alternatives, including the
possible sale of all or a portion of the Company, while also
exploring alternatives to restructure the Company's obligations
to its bondholders and other creditors. These efforts are likely
to involve reorganization under the federal bankruptcy code. Even
if one or more of these alternatives can be successfully
implemented, there can be no assurance that the Company will not
run out of cash.

Total revenues for the fourth quarter of 2000 were $291.1 million
compared to $305.4 million in the third quarter of 2000 and
$164.8 million for the fourth quarter of 1999. EBITDA (earnings
before interest, taxes, depreciation and amortization and unusual
charges) was a negative $92.3 million compared to a negative
$25.6 million in the third quarter of 2000 and a negative $25.1
million for the fourth quarter of 1999. Net loss from continuing
operations was $2.7 billion for the fourth quarter of 2000,
compared to $682.5 million in the third quarter of 2000 and
$134.8 million a year ago.

Net loss available to common shareholders was $3.2 billion for
the fourth quarter of 2000 compared to $1.4 billion in the third
quarter of 2000 and $223.5 million in the fourth quarter of 1999.
Included in the net loss for the fourth quarter were $465.1
million for the results and expected loss on disposal of
discontinued businesses, $45.2 million of net restructuring
charges, $2.1 billion for the impairment of certain long-lived
assets and $97.0 million in other asset write-offs. Including
these charges, PSINet reported a basic and diluted loss per share
of $16.83 for the fourth quarter of 2000 compared to $7.34 in the
third quarter of 2000 and $1.63 in the fourth quarter of last
year.

For the full year, PSINet had revenues of $995.5 million in 2000
compared to $534.1 million last year. EBITDA was a negative
$173.1 million for 2000 compared to a negative $32.5 million a
year ago. Net loss from continuing operations was $3.8 billion
compared to last year's $334.0 million. Net loss available to
common shareholders for 2000 was $5.0 billion, and included $1.2
billion for the results and expected loss on disposal of
discontinued businesses, $78.0 million of net restructuring
charges, $2.6 billion for the impairment of certain long-lived
assets and $156.0 million in other asset write-offs. PSINet's
basic and diluted loss per share was $28.92 for 2000 compared to
$3.49 for 1999.

As of April 10, 2001, the Company had cash, cash equivalents,
short-term investments and marketable securities held in
financial institutions of approximately $520 million, of which
approximately $27 million supports obligations under letters of
credit and similar obligations. As of December 31, 2000, the
Company has outstanding $2.9 billion principal amount of senior
notes, $227.0 million principal amount at maturity of convertible
subordinated notes, $503.5 million of capital lease obligations
and $66.8 million of other notes payable.

PSINet has filed its Form 10-K for the year ended December 31,
2000, with a going concern qualification in the audit opinion
from PricewaterhouseCoopers LLP. There exists substantial doubt
about the Company's ability to continue as a going concern and,
therefore, its ability to realize its assets and discharge its
liabilities in the normal course of business. The Company's
financial statements do not include any adjustments relating to
the recoverability and classification of recorded amounts or to
amounts and classification of liability that may be necessary if
the entity is unable to continue as a going concern.

As of April 10, 2001, the Company had received notices of default
from equipment lessors with respect to $68.1 million in equipment
leases. The Company is seeking to resolve issues outstanding with
these lessors who have currently agreed to forbear from taking
any action. There can be no assurance as to how long any lessor
will continue to forbear. With respect to certain leases, the
forbearance period could potentially expire as early as April 27,
2001 if the Company does not meet certain requirements.
Additionally, on April 3, 2001, one of the lessors notified the
Company that it had accelerated the Company's obligations under
its leases. Following negotiations with the Company, this lessor
withdrew its notice of acceleration provided that the Company
satisfies certain payment obligations by April 20, 2001. An event
of default under an equipment lease facility could result in
related events of defaults under each of the Company's indentures
governing its senior notes, which could cause all of those notes
to become due and payable. As a result of such withdrawal, the
Company believes that the event of default under the indentures
relating to its senior notes arising from such acceleration event
is no longer a continuing event of default. There can be no
assurance that the Company will be able to cure any events of
default or that the lessors will not seek other remedies that are
available to them. Any such events could have a material adverse
effect upon the Company and the factors discussed above threaten
the Company's ability to continue as a going concern.

On April 3, 2001, the Nasdaq Stock Market announced that trading
was halted in PSINet's common stock, at last price of 3/16, and
in PSINet's Series C preferred stock, at last price of 1-3/16.
The Nasdaq has informed PSINet that trading will remain halted
until PSINet has fully satisfied Nasdaq's request for additional
information. The Company had previously announced that it is
likely that its common stock and preferred stock will have no
value, and the indebtedness of the Company will be worth
significantly less than face value.

Headquartered in Ashburn, VA, PSINet is a leading provider of
Internet and IT solutions offering flex hosting solutions, global
eCommerce infrastructure, end-to-end IT solutions and a full
suite of retail and wholesale Internet services through wholly-
owned PSINet subsidiaries. Services are provided on PSINet-owned
and operated fiber, web hosting and switching facilities,
currently providing direct access in more than 900 metropolitan
areas in 27 countries on five continents.



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C O L O M B I A
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PAZ DEL RIO: Posts Negative Results In 2000
-------------------------------------------
Colombian steel company Acerias Paz del Rio, currently
restructuring in accordance with Law 550 of 1999 to avoid closing
down, posted net losses amounting to P$49,819mil in 2000,
according to a report in South American Business Information
Wednesday issue. The figure is 16 times higher than what was
recorded in 1999. Also in 2000, gross profits stood at P$421mil,
in stark contrast to the P$33,139mil posted in 1999. However,
sales of 239,237 m tons of steel generated earnings of
P$147,249mil, a 28-percent increase compared to 1999. Operating
losses also were reduced in 2000 to P$59,295mil, one third less
than the Pesos$90,338mil recorded in 1999.

The steel company, is presently seeking partnership with a
foreign investor to help emerge from the financial troubles it
has suffered over the last year.



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D O M I N I C A N   R E P U B L I C
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CDE: Senators Say Anti-Privatization Case Politically Motivated
---------------------------------------------------------------
On Tuesday, Senator Rafael Abinader and advisor Manuel Casals
Victoria delivered to Attorney General Virgilio Bello Rosa the
case alleging former President Leonel Fernandez defrauded the
Dominican state of RD$40,000 million, DR1 Daily News reported
Wednesday. The case also involves other participants in the
privatization of the Dominican Electricity Corporation (CDE). The
PLD senators question the qualifications of those who prepared
the report, saying that it was a confidential document that was
made public even before being discussed in the Senate.

"The report is nothing but another political instrument to
discredit Leonel Fernandez and his government, the privatization
process and former government officers," recalled PLD senators.



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M E X I C O
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CINTRA: Probable Sell-off Via Public Offerings
----------------------------------------------
The assets of government-owned Mexican airline holding company
Cintra could be sold off in public share offerings,
Reforma/Infolatina reported Wednesday. This recent report
contradicts early speculations that the airline holding company
would be sold by means of private auctions amongst leading
foreign and domestic bidders. Airline industry observers foresee
unwillingness on the part of major potential bidders (U.S.
airlines Delta, United and American) for stakes in Cintra-
controlled airlines Aeromexico and Mexicana. Legal limits on the
size of the positions they can hold in Mexican carriers creates a
potential barrier to getting a premium from the sale.

Mexican bank bailout agency IPAB owns a 51-percent stake in
Cintra. In January, it hired the local office of Merrill Lynch to
handle the sale process.


TELEVISA: To Release Details Cost-Cutting Plan By Month's End
--------------------------------------------------------------
The details of a $50million cost-cutting plan to be implemented
by Televisa is expected to be released before the end of the
month. The company's board of directors are scheduled to meet on
April 25 to review its first quarter performance, according to a
report in Reforma/Infolatina Wednesday edition. Senior company
officials, who asked not to be named, said that the cost-cutting
measures could exceed $50 million, especially if the US economy
continues to slump, affecting the multinational companies that
are the bulk of Televisa's advertisers.

The company recently announced it was closing down its loss-
making pay television news channel ECO, and reducing capital
expenditures and cutting staff at Esmas.com, its Internet portal.
The closure of ECO is expected to save the company at least $20
million. Meanwhile, the company is working on a voluntary early
retirement program for its employees to reduce labor expenses.
The plan is likely to be implemented by the end of April.


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P E R U
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CONSERVERA ISLAY: Creditors Will Meet To Decide On Restructuring
----------------------------------------------------------------
Creditors of canned fish producer Conservera Islay have scheduled
a shareholders' meeting for the period between April 23 and April
26 to decide on the company's restructuring, South American
Business Information related Wednesday. According to the report,
the restructuring allows it to refinance US$22.5 million
liabilities over a 6-year term. The fish producer is expected to
get US$8.6 million in working capital credits. Conservera Islay
is leasing 3 ships worth US$3.6 million to fishing company
Pesquera Santa Isabel (PSI) to help cut down debts by US$7.3
million. Aside from that, PSI assumed US$3.7 million in debts.



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T R I N I D A D   &   T O B A G O
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CARONI LTD.: Incurs More Losses Due To Temporary Shutdown
---------------------------------------------------------
Already battling with losses totaling over 12 million Trinidad
and Tobago dollars (US$2 million), sugar factory Caroni Limited
is battered once again with heavy losses following a temporary
shutdown at one of its factories, Caribbean News Agency reported
Wednesday. The company was forced to close its Sta. Madeliene
factory for two weeks after a steam valve exploded, killing two
workers on the spot.



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V E N E Z U E L A
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DISTRIBUIDORA: In Serious Financial Trouble
-------------------------------------------
Venezuelan textile group Distribuidora Al Galope is experiencing
financial turmoil, according to a South American Business
Information Wednesday report. Distribuidora owns stores under the
Graffiti and No Puede Ser names. Graffiti is reportedly swimming
in a pool of debts totaling Bs$15 billion  - Bs$3bil each with
the following banks: Provincial, Venezuela, Banesco, Caracas and
Unibanca. The company must somehow reduce 40 percent of debts
immediately and offer real guarantees for the remainder in order
for a restructuring deal to work.

The company said changes in customs regulations slowed down
imports of foreign brands and, in turn, reduced stock rotation;
these changes also forced up prices and sales fell. Distribuidora
aggressively aimed to counteract this by acquiring assets that
weakened cashflow.

Meanwhile, No Puede Ser was set up to promote the products from
the national sector but many local products ended up in the
bargain bins at Graffiti stores.


SIVENSA: Government Throws Full Support To Save Orinoco
-------------------------------------------------------
The government of Venezuela announced it would give its full
support to help Orinoco iron plant emerge from its deep crisis,
Reuters reported Wednesday. Orinoco is a joint venture between
Australia's BHP Ltd. and local firm IBH.

The Corporacion Venezolana de Guayana (CVG), Venezuela's state
industrial holding, owns six percent of the Iron plant through
its stake in IBH's parent company Sivensa. According to its
president, Francisco Rangel, CVG will do everything to help save
the $900 million Iron plant from breakdown. CVG believes that
with Orinoco, Venezuela will eventually become the world's
biggest producer and exporter of iron briquettes.

"We do not know what the financial formula may be, as that is
still being studied," Rangel said, adding, "we are giving the
full support of the CVG and the Venezuelan state so that the
project can go ahead."

"Our friends at Sivensa and Orinoco Iron have indicated that
there are already people interested (in the plant)," Rangel
disclosed.

According to Neil Malloy, Director General at Sivensa, only one
of Orinoco Iron's four production trains is currently working due
to cash restrictions. Two more trains are ready to begin
production immediately should the firm secure more working
capital, he added.

Orinoco Iron next faces a debt payment of $60 million in interest
and capital in September, Malloy said.




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.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
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Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 301/951-6400.


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