TCRLA_Public/010427.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 27, 2001, Vol. 2, Issue 83



AEROLINEAS ARGENTINAS: Ordered To Cover 50% Of Scheduled Flights


BANESPA: Unions May Elevate Strike If Demands Not Met
EDITORA ABRIL: To Issue R$150M Worth Of Convertible Debentures


GENER: Non-Core Assets Sale Could Fetch More Than $800M


CHRYSLER: Lower-Than-Expected 1Q Loss; Analysts' Concerned
GRUPO VITRO: 1Q01 Results; EBIT, Net Income Down
GRUPO VITRO: Executive Organizational Changes Create 2 Positions
SAVIA S.A. DE C.V. : Company Profile
TELEVISA: Reports 27 Percent Drop In Operating Profits In 1Q

      - - - - - - - - -


AEROLINEAS ARGENTINAS: Ordered To Cover 50% Of Scheduled Flights
Flights of Aerolineas Argentinas SA and Austral, the two units
held by Sociedad Estatal de Participaciones Industriales (SEPI),
remain grounded at the international and domestic airports in the
capital as company maintenance crews continue with their
indefinite strike to protest the dismissal of 220 workers, AFX
Europe reported Wednesday.

"The strike is total in the maintenance section and we will
continue in this manner as long as we don't get a response" from
the company on the dismissals, Areonautical Technicians
Association (APTA) secretary Ricardo Cirielli said.

However, the labour ministry has ordered Aerolineas to cover at
least 50 percent of its scheduled flights in any manner, said
Transport Secretary Jorge Kogan. The coverage must be provided
for both domestic and international flights "in some manner, even
if airline workers carry on with their strike," Kogan stressed.

Meanwhile, SEPI Chairman Pedro Ferreras informed the Spanish
parliamentary economic committee that halting the flotation of
the airline on 3 April would have entailed huge costs, despite
the fact that market conditions were unfavourable. Ferreras also
said SEPI would push through with its restructuring plan for
Aerolineas despite opposition. A total of 1,315 jobs are to be
slashed from Aerolineas' 6,500-strong workforce.


BANESPA: Unions May Elevate Strike If Demands Not Met
Eduardo Rondino, the president of the Union of Banespa Employees,
warned that workers at Banco do Estado de Sao Paulo (Banespa)
could engage in a full-blown strike, according to a Dow Jones
Newswires report Tuesday. Rondino's comments come after some
15,000 Banespa employees held a partial strike Monday in protest
to Banco Santander Central Hispano SA's (BSCH's) voluntary
redundancy package that was offered to some 80 percent of all
staff last week.

"I believe that in the next 30 to 60 days, we will hold a major
strike and bring the bank to a halt if BSCH doesn't meet our
demands," informed Rondino. Unions demanded a guarantee that all
employees who want to stay with the bank and won't take part in
the redundancy program will keep their jobs. In addition, they
also want the bank to agree to a list of 134 conditions proposed
by its employees. The demands deal with the institution's
treatment of its staff. So far, the union and BSCH's management
have engaged in a round of talks. According to Rondino, BSCH said
it is planning to outsource a number of its operations. He
revealed that BSCH was initially planning to cut jobs in such
operations that would be outsourced, but management said they
would find new positions for those who didn't participate in its
voluntary redundancy program.

EDITORA ABRIL: To Issue R$150M Worth Of Convertible Debentures
In a move seen as part of a debt restructuring strategy, Editora
Abril will issue R$150 million worth of convertible debentures in
the money market. Mr. Geraldo Aguilar, Editora Abril executive
officer, made the announcement in a South American Business
Information report published Wednesday. The company posted
R$626.8 million in consolidated liabilities in 2000, of which
R$540.6 million are short term. Meanwhile, losses in that same
year amounted to R$127.2 millioncompared to the R$20.5 million in
profits registered in 1999. Editora blamed the drop in
performance mainly on its controlled companies such as Universo
Online, which registered losses of R$41.2 million.


GENER: Non-Core Assets Sale Could Fetch More Than $800M
AES Corp., a U.S.-based electricity company, which now owns 98.53
percent of the Chilean electricity generator Gener SA, expects to
pull in more than $800 million from the selling several of
Gener's non-core assets, Dow Jones Newswires related Wednesday.

"I don't know the total amount (the assets) will bring in, but
the book value is above $800 million," Gener CEO Andres Gluski
told reporters after a shareholders' meeting held Tuesday.

Included in the total is $650 million which the French energy
giant TotalFina Elf (TOT) will pay for Gener's Argentina assets.
AES also plans to unload Gener's Chilean shipping and waterworks
holdings, a 70 percent stake in Puerto Ventanas and a 51-percent
stake in Chilean waterworks holding Explotaciones Sanitarias.

Separately, AES successfully passed a measure that will allow it
to tender for the remaining 1.47 percent of Gener at some point
over the next three years. The maximum price of the offer was set
at $0.242647059 per share, which is what AES paid in the original

Gener would save tens of thousands of dollars in administrative
expenses if it could delist from the Santiago Stock Exchange, but
Gluski said the primary motive for buying the outstanding shares
is speed.

"Some decisions can be delayed two months, when a privately-held
company could move ahead in a matter of days," he said. The
Chilean law stipulates that a company must remain public as long
as ownership is split among more than 500 shareholders. Gener
would have to pay about $20 million to purchase all the
outstanding shares.


CHRYSLER: Lower-Than-Expected 1Q Loss; Analysts' Concerned
DaimlerChrysler AG's troubled unit Chrysler announced a $1.2
billion loss in the first quarter of 2001, about $100 million
narrower than analysts expected, AP Business News reported
Wednesday. However, some analysts remained cautious despite the
unit's slightly smaller-than-expected loss, saying that it still
has so much more to prove just a couple of months into its three-
year, $3.9 billion revival plan.

"Everyone knew were going to be awful," UBS Warburg's Saul Rubin
said. "Was it as bad as everyone imagined? Not quite, but it
wasn't much better either. Certainly nothing to get us
particularly excited about the stock."

"I don't think investors are looking at the results and taking
any solace in the numbers," added Prudential Securities Inc.'s
Michael Bruynesteyn.

On the Chrysler side, "we certainly met our target. In fact, we
overachieved it a little bit," said Dieter Zetsche, which took
office in November as Chrysler's president, chief executive and
pointman of the unit's recovery. Zetsche declined to forecast
Chrysler's performance for the rest of 2001, saying "there's no
reason at this point to talk about anything in addition to what
we announced" in February.

GRUPO VITRO: 1Q01 Results; EBIT, Net Income Down
Vitro, S.A. de C.V. (NYSE: VTO; BMV: Vitro A)

-- Flat Glass; main driver of Vitro's sales growth

-- Acros Whirlpool sales continued to increase

-- Exports maintained similar levels

Vitro, S.A. de C.V. (NYSE: VTO; BMV: Vitro A) today announced
unaudited financial results for the three months ending March 31,

First Quarter of year 2001 Highlights:


Consolidated net sales for the first quarter of 2001 reached
US$672 million, representing an increase of 5.6 percent in dollar
terms compared with US$636 million for the first quarter of 2000.
In peso terms, sales reached Ps$6,455 million, representing an
increase of 0.9 percent compared with Ps$6,397 million for the
first quarter of 2000. Flat Glass was the main driver of Grupo
Vitro's sales performance, followed by Acros Whirlpool, who
continued to increase sales, which offset the decline at the
other businesses.


Exports during the first quarter of 2001 remained practically the
same as the first quarter of 2000, reaching US$188 million,
versus US$196 million, respectively.


EBIT for the first quarter of 2001 was US$72 million,
representing a 15 percent decline from US$85 million for the same
period of 2000. In peso terms, EBIT for the first quarter of 2001
was Ps$694 million, representing a decrease of 19.4 percent when
compared with the Ps$861 million for the same period of 2000, due
mainly to a less profitable sales product mix and natural gas
prices, which continued to affect year over year results

Net Income

Net income for the first quarter of 2001 was US$29 million,
compared with US$48 million for the same quarter in 2000, due
mainly to the impact of non-cash items.

All figures given herein are in accordance with Generally
Accepted Accounting Principles in Mexico. All figures are
unaudited and are presented in constant pesos as of March 31,
2001. Dollar figures reported herein are in nominal dollars
resulting from dividing each month's nominal pesos by that
month's ending exchange rate, except as indicated. The quarter
ended March 31, 2001.



Flat Glass and Acros-Whirlpool, the Company's household products
unit, posted positive sales performances for the quarter. In Flat
Glass the improvement was mainly the result of additional sales
at Harding Glass, which started to consolidate from April 2000,
although volumes to the export markets reflected the slowdown in
the U.S. economy. Acros Whirlpool continued to enjoy growth in
both sales and volume terms that outpaced that of the domestic
market. In Glassware, the slowdown in the U.S. economy affected
export sales, especially in the industrial segment. Sales at the
Glass Container unit remained nearly unchanged YoY. Diverse
Industries' revenues were affected on a YoY basis by the closing
last year of the former J-V with GE, which was partially
compensated by the increase in sales at Alcali.


For IQ'01, EBIT declined YoY by Ps$167 mill. or 19.4% in peso
terms and 15.0% in US$. However, EBIT and EBITDA margins, when
compared to IVQ'00, remained practically flat, with a slight
improvement in EBITDA margin. The YoY erosion in margins was the
result of a lower absorption of fixed costs as a result of lower
sales in some businesses, such as Glassware and Diverse
Industries and pricing pressures in businesses such as Glass
Containers and the auto segment of Flat Glass. The strength of
the peso, which depreciated YoY by 2.2% vs. an annual inflation
of 7.1%, also negatively impacted the competitiveness of the
Company's exports. With respect to natural gas prices, which on a
YoY comparison rose by 65%, the Company benefited during the
quarter from the hedging strategy already implemented at a price
of US$4.03/MM BTU for around 90% of its consumptions needs and an
additional hedging that resulted from an agreement signed with
PEMEX for three years at a price of US$4.0/MM BTU, for 100% of
its consumptions needs. This additional contract was retroactive
to January of 2001, and resulted in an extraordinary benefit for
the quarter.

Total Financing Cost

The decrease in interest expense for the quarter was due to the
lower weighted average cost of debt for IQ'01, which declined to
9.9%, from 10.3% for IQ'00. The weighted average interest cost
for IVQ'00 was 10.2%, and for fiscal 2000 was 10.3%. The decrease
in cost was attributable to lower interest rates in US dollars
and a swap made to change UDI denominated debt to US dollars. Due
to the 1.2% appreciation of the peso in IQ'01, the company
recorded an exchange gain for the period that was however lower
than the one for IQ'00, during which the peso appreciated by
2.3%. As a result of a lower inflation QoQ (1.1% in IQ'01 vs.
2.8% in IQ'00), a lower gain from monetary position was recorded,
thus resulting in a total financing cost of Ps$202 mill. (US$20
mill.), compared with the financing gain of IQ'00. The major
events that produced the increase in the total financing cost for
the quarter were non-cash related.

YoY, taxes paid by the Company declined as the taxable income of
the companies with JV partners decreased. Additionally, as a
result of this lower taxable income, the companies that had net
operating losses couldn't amortize a bigger amount resulting in a
deferred tax. PSW decreased as a result of the previously
announced corporate reorganization of a series of companies
within the Glass Containers and Flat Glass business units to
improve service to customers and reduce administrative costs.

Net Majority Income

Net Majority Income for the quarter was Ps$137 mill. (US$15
mill.), compared with a Net Majority Income for IQ'00 of Ps$328
mill. (US$33 mill.). This decline was mainly the result of the
lower YoY EBIT and other non-cash items that resulted in an
increase in Total Financing Cost.

Capital Expenditures

Total capital expenditures for IQ'01 were US$22 mill., in line
with management's optimization of the CAPEX budget. The bulk of
the CAPEX for 2001 is expected to be invested during the second
half of the year, for a total estimated amount of US$120 -130
million, not including the Cristalglass acquisition in Europe
which is expected to be closed by April 30.

Quarter over quarter debt increased by US$28 mill. mainly as a
result of a lower Net Free Cash Flow, reorganization charges,
investments in the environmental businesses mentioned in the
IVQ'00 earnings release and the peso appreciation over the same
period (effect of translating the peso debt into US dollars).

Debt Profile as of March, 2001

-- 72% of debt is long term.

-- Average life of debt is 3.1 years.

-- 83% of debt maturing within the period April 2001 - March 2002
is related to trade finance and to foreign subsidiaries (US$392

-- Next public debt maturities include US$70 million on May'01 in
the domestic markets and US$175 million on May'02 in the
international markets.

-- Debt composition: Fixed rate = 31%; Floating base and Fixed
spread = 41%; Market Conditions = 28%.

Cash Flow

Year over year a lower EBITDA, along with higher working capital
investments, offset the effect of a lower CAPEX, interest expense
and tax payments, resulting in a negative Net Free Cash Flow
generation for the quarter. As a percentage of sales, working
capital investments for IQ'01 were reduced to 13.4% from 13.8%
for IQ'00. Going forward, during the month of April the Company
received a tax reimbursement of approximately US$20.8 million.

Flat Glass

(37% of Sales)


Revenues for the quarter at the Flat Glass unit increased YoY by
8.5% in peso terms and by 13.4% in US$, mainly as a result of the
incorporation of Harding Glass, which started to consolidate at
the VVP America level in mid April of 2000. Foreign sales (VVP
America plus exports) accounted for 70% of total flat glass sales
for the quarter. Increases in sales in both the construction and
auto segments of the domestic market, helped to offset the
decreases experienced in the export markets, where the sales
performance of the business was affected by the decline in
consumption in the U.S. in connection with the slowdown in the
local economy. In the construction segment, a more profitable
sales mix towards the retail market also compensated for the
overall decline in exports and sales to the automotive sector. As
for the auto segment, lower sales to the OEM segment were
partially compensated by reallocation to the auto replacement
market. Total construction volumes decreased YoY by 5.5% while
auto volumes decreased by 10.5% as a result of, as already
mentioned, lower sales to the export markets.


EBIT decreased YoY by 21.5% in peso terms and 17.5% in US$ YoY,
the comparison of margins for the quarter was affected by the
additional SG&A from the Harding Acquisition, the change in the
sales mix as additional sales came basically from Harding, while
sales to more profitable segments were lower as a consequence of
the slowdown in the U.S. economy. Other factors that affected
margins were some restructuring charges to streamline the
business and improve profitability in the long run, the increases
in energy prices on a YoY comparison and the strength of the peso
that made imports more competitive as prices for nearly 91% of
the products of this business are closely linked to the US$,
while the peso drives costs. It's worth noticing, however, that
margins remained stable quarter over quarter as management
continued to work on cost reduction and productivity

Acros Whirlpool

(19 % of Sales)


Consolidated net sales increased by 2.6% in peso terms or by 7.8%
in US$. During the quarter, overall domestic demand continued to
improve, although at a slower pace than last year, by
approximately 5%, while Acros Whirlpool grew at a slightly higher
rate, thus gaining some market share. Volume growth came mainly
from the washer and refrigerator segments. Outside the domestic
market, slower exports to the US due to the slowdown in that
country's economy were partially offset by an improvement in
sales to the Central America and Caribbean market.


EBIT improved YoY by 2.3% in peso terms or by 7.5% in US$. The
improvement in EBIT was mainly driven by the increase in volume,
as the pricing environment continued to be affected by imports
favored by the strong peso. Cost reduction efforts continued to
take place, as the business keeps on benefiting from the
divestiture of the plastics operation and overall downsizing
efforts and expense reductions. Because of its cyclical nature,
margins were affected when compared with IVQ'00.


(7 % of Sales)


Consolidated net sales decreased YoY by 7.1% in peso terms, or by
3.0% in US$, mainly as a result of a decline in demand in the
industrial segment. In the domestic sector, decreases in the
candle votive market (industrial) were compensated with direct
sales to the retail market. In the case of exports, a combination
of lower sales from Crisa's customers to their final consumer
during the quarter, and a decline in sales to certain customers
that had accumulated excess inventory during IVQ'00 and that, as
such, reduced temporarily their purchases during IQ'01, magnified
the effect of lower sales. Volumes for IQ'01 decreased YoY by 14%
but are expected to improve as the natural curve of demand picks
during the IIQ'01 and the effect of high inventories is


EBIT decreased YoY by 36.4%, mostly as the result of lower sales,
higher energy costs on a YoY basis, and a reduced fixed cost
absorption in conjunction with lower sales. Some additional costs
and expenses related with an infrastructure improvement in the
distribution network also affected the YoY comparison. Management
is working on reducing overall expenses and increasing
profitability through better use of installed capacity

Glass Containers

(26% of Sales)


Consolidated sales in the Glass Container business declined YoY
by 3.9% in peso terms and increased by 0.4% in US$. The business
was able to maintain the sales level through focus on niche
markets, which were able to partially compensate losses in the
domestic beer segment because of overcapacity at one of the
company's main vertically integrated customers, weaker demand in
the generic food sector and a strong peso that promoted imports
in the domestic pharmaceutical line. On the export side, even
though volume decline was higher than the domestic sector, its
impact on the decline in sales wasn't as important as in the
domestic market because of a better export product mix.


Margins rose quarter over quarter by 90 basis points (160 basis
points for EBITDA) despite certain cost increases. Volume and
price pressure that resulted in lower sales, along with price
increases in energy prices and the cost of certain packaging
materials, which represent two of the most important components
in the cost of the final product of the glass making process,
affected the YoY comparison. Management continues to work, as an
ongoing commitment, on operational adjustments as means to
improve productivity in this business and reduce further fixed
cost. These efforts were reflected in the quarter over quarter
margin increases experienced in the last two quarters, partially
offsetting the already mentioned sales and cost challenges.

Diverse Industries

(11% of Sales)


Sales declined YoY by 7.8% in peso terms and by 3.1% in US$,
affected by the closing during 2000 of MEF, the former JV
partnership with GE (which represented US$5 mill. in sales for
IQ'00). In addition to the effect of the reduced number of
businesses operating under Diverse Industries, the decline was
mainly due to the high proportion of US$ related revenues of this
unit (around 65%). The other main factor affecting the sales
performance of this unit was the decline in the domestic demand
as a result of lower consumption in both the public and private
sectors and the slowdown in the U.S. economy, which affected
sales, mostly in retail markets. This decline in sales was
partially offset by the improvement at the calcium chloride
operation (Alcali), which benefited from the cold weather in the
U.S. during the quarter, and the capital goods segment (FAMA),
which is expanding its traditional focus on glass related
machinery to alternative markets.


EBIT decreased YoY by 23.2% in peso terms as a result of the
negative impact of a stronger peso on the unit's large US$
denominated revenue base and the increase in natural gas prices,
aluminum prices and resins, which respectively affected Alcali's,
Vancan's and the plastic operations results. Lower sales also
resulted in a lower absorption of fixed costs. Management
continues to seek additional cost reduction opportunities and to
further diversify the unit's client base in order to improve
profitability and diminish geographical risks.
Key Developments

Acquisition of Cristalglass Vidrio Aislante in Europe

On April 4, 2001, Vitro announced its entry into the European
markets through the acquisition of Cristalglass Vidrio Aislante
in Spain. This transaction is in line with the Company's
strategic plan to selectively invest in its core businesses, to
increase growth and diversify geographic coverage.

Vitro Plan, S.A. de C.V., Vitro's flat glass subsidiary, signed a
stock purchase agreement to acquire 60 percent of the outstanding
shares of Spain's Cristalglass Vidrio Aislante, S.A., the holding
company of the Cristalglass group. The European company
processes, distributes and sells flat glass for the construction
industry, employs over 300 people and has an estimated 30 percent
share of the relevant markets where it has presence. Annual sales
are close to US$60 million. The transaction is expected to close
by April 30, 2001.

GRUPO VITRO: Executive Organizational Changes Create 2 Positions
Vitro, S.A. de C.V. (BMV: VITROA) (NYSE: VTO) announced today
important executive organizational changes.

Federico Sada, President and Chief Executive Officer announced
today organizational changes in Grupo Vitro's headquarters in
order to become a more flexible company and to support the
company's management structure. Two executive positions where
created reporting directly to the President and Chief Executive
Officer of Grupo Vitro; one position will be in charge of
operations and the other will be in charge of the Corporate

Jose Domene, former President of the Flat Glass business and
International Businesses, has been appointed as Chief Operating
Officer. Luis Nicolau, former partner of Ritch, Heather & Muller,
S.C., a well-known Attorney's firm, will join Grupo Vitro as
Chief Corporate Officer.

The President and Chief Executive Officer, as well as the Chief
Operating Officer and the Chief Corporate Officer, will integrate
the new Executive Commission. The main responsibilities of the
Executive Commission, will be:

1. To supervise the day by day business units operations

2. To implement the company's strategy

3. To support the company's long term growth objectives

This new administration structure will allow Grupo Vitro, to
better serve its customers, motivate productivity among our
employees and workers, and above all, increase value creation to
our shareholders.

SAVIA S.A. DE C.V. : Company Profile

Name: Savia S.A. De C.V.
       Av. Batallon De San Patricio 111 Piso 4
       Colonia Valle Oriente
       San Pedro Garza Garcia Nuevo Leon 66269

Telephone: (528) 3990830


Type of Business:  Savia S.A. de C.V. (formerly known as Empresas
La Moderna S.A. de C.V.) main activities are
the development and application of genetic
engineering and transformation technologies in
plants, fruits and vegetables, as well as the
production and marketing of vegatables and
seed production. Savia provides packaging
services and also manufactures folding
boxboard. In March 1999 the company acquired
through its subsidiaries a further 60.3%
(increasing its holding to 70%) of Seguros
Comercial America S.A. de C.V. (SCA) adding a
new insurance segment to its activities. Agro-
biotechnology accounted for 82% of 1999
revenues; packaging, 15% and other business,

SIC:  UNKNOWN SIC - 0000 [0000]

Employees:  20,000 (last reported count)

Sales:  $3,211.0(mil.) - Fiscal Year-End December 2000

Net Inc.:  $293.0(mil.) - Fiscal Year-End December 2000

Trigger Event:   The current problems affecting Savia were caused
primarily by excess investments in its agro
technology business Seminis, the results of
which were impacted by a slower than expected
integration process of its acquired businesses,
averse climate conditions and foreign exchange
losses. These circumstances have driven Savia
to a temporary liquidity shortfall, which the
company is currently in the process of solving.

CEO: Alfonso Romo Garza

CFO: Ruben Martinez Donde

Last TCRLA Headline DATE:  April 26,2001, Vol 2, Issue 82

TELEVISA: Reports 27 Percent Drop In Operating Profits In 1Q
Mexico's largest broadcaster Grupo Televisa SA reported a 27-
percent drop in its first quarter operating profits, Bloomberg
said Wednesday. The company attributed the result to lower
advertising revenues and higher costs, which it plans to cut by
about $61 million this year. The company's net sales also slumped
3.1 percent to 4.51 billion pesos from 4.65 billion pesos in the
same period of the previous year.

"The economic deceleration had a negative effect on our clients
and in general on the advertising industry," the company said in
a press release issued through the Mexican Stock Exchange.
According to Televisa, costs rose 3.2 percent in the quarter
because of higher costs for its Internet unit and rising
satellite usage fees. Cash flow, or earnings before interest,
taxes, amortization and depreciation, fell 17.7 percent to 999.5
million pesos from 1.21 billion pesos.

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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