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                   L A T I N   A M E R I C A

            Tuesday, May 8, 2001, Vol. 2, Issue 90

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Gov't Fears Airline Could Liquidate
BANCO DE CORDOBA: Privatization To Start September 5


B R A Z I L

CESP: Cemig's Intent To Participate In Bidding Still In Question
CVRD: Suzano Now Intends To Participate In Biddding
INDUSTRIAS KLABIN: To Release 1Q Financial Results May 7, 2001
PAO DE ACUCAR: To Dismiss 700 Workers To Improve Operations


M E X I C O

CINTRA: Congress Defends Proposed Amendment
GRUPO SIDEK: Assets Sales Report from April 1, to April 30, 2001
MEAHORRO: Shuts Down Operations Indefinitely
SAVIA: In Discussions With ING Group Over Acquisition
SAVIA: Bank Creditors Deny Reaching Agreement With Company
TRIBASA: Shares Suspended At Mexican Stock Exchange


V E N E Z U E L A

VENEPAL: Has Until May 15 To Incorporate New Partner


     - - - - - - - - - -


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Gov't Fears Airline Could Liquidate
-----------------------------------------------------------
The Argentinean government's fears about the future of national
carrier  Aerolineas Argentinas is mounting, Ambito Financiero
reported Friday. The government believes that the 10-day
conciliation period called by the labor ministry is aimed at
giving more time to find a solution for its problems. However,
there is little expectation that the airline and the technical
workers' union (APTA) will strike a deal at the end of 10 days.
Sepi, the Spanish state holding company that controls Aerolineas,
will not drop plans to cut jobs, change collective agreements and
reduce pay; conditions APTA will not accept. The holding company
also revealed it would not assume the costs of a new strike if
the current negotiations fail.

Labor Secretary, Anselmo Riva, has warned that the airline will
go into liquidation if Sepi does not change its structure. Labor
minister, Patricia Bullrich, has said there are alternatives,
which will solve Aerolineas' problems and that she is willing to
talk to the Spanish authorities in Madrid.

According to widespread speculation, the Argentinian government
has asked Eduardo Eurnekian, a shareholder in Argentina 2000, the
Argentinian airport operator, if he is still interested in buying
the airline. According to official sources, he has approached the
government with a solution, which would guarantee jobs for at
least two years and would involve Sepi assuming the airline's
$900 million of debt.


BANCO DE CORDOBA: Privatization To Start September 5
----------------------------------------------------
The privatization process of Argentinean state-owned bank Banco
de la Provincia de Cordoba will kick off on the 5TH of September
this year. Plans were revealed in an Ambito Financiero Thursday
report, by KPMG, Alpha and Roberto Dominguez, the consultants
hired to advise the government on the sale. The advisers
disclosed that the bank's financial restructuring would demand
some 730 million pesos from the province of Cordoba and 384
million pesos from the National Treasury. The total cost of 1.114
billion pesos is equivalent to the bank's debt with private
financial institutions. The bank's vulnerability, according to
Roberto Dominguez, is reflected in the state of its net assets,
which currently stand at negative 80 million pesos.




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B R A Z I L
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CESP: Cemig's Intent To Participate In Bidding Still In Question
----------------------------------------------------------------
State energy secretary Mauro Arce of Sao Paulo confirmed that
Cemig, the electricity utility owned by the Minas Gerais state,
delivered the required documents to take part in the
privatization of generator Cesp Parana, Brazil Financial Wire
reported Friday. The legality of Cemig's move, however, is still
in question since the Sao Paulo constitution forbids state-owned
companies to take part in privatizations, according to Arce.

"The bid call prohibits entrance of government-run companies. But
I authorized Cemig's documents to be received to avoid
confrontation. I don't know if their intention is to make
trouble," Arce said. He further noted that the case has been
referred to the state prosecution service. "I do not want to
prejudge, lets wait for the state attorney's office's
conclusion."

Despite deeming it illegal, Arce thinks it is interesting that
Cemig wants to take part in the Cesp Paran  privatization for a
simple reason. "I want six bidders to boost Cesp's premium," he
confessed.

Arce revealed that Cesp has medium and long-term dollar-
denominated liabilities of $3.5 billion and the minimum asking
price for the generator was set at R$1.739 billion for 38.6
percent of the its total equity.


CVRD: Suzano Now Intends To Participate In Biddding
---------------------------------------------------
Cia Suzano de Papel e Celulose, which was previously reported to
have withdrawn from the bidding process of Cenibra, now intends
to take over it when CVRD (Companhia Vale do Rio Doce) puts it up
for sale on May 11, South American Business Information report
Friday. The deal depends on an agreement to be signed with its
partner BNDESpar, according to Suzano's CEO, Mr. David Feffer.
Suzano has just concluded the acquisition of Bahia Sul for R$320
million.

CVRD, the world's largest producer and exporter of iron ore,
recently announced it would sell off its 51.48 percent stake in
Cenibra via a sealed-bid auction on May 11.


INDUSTRIAS KLABIN: To Release 1Q Financial Results May 7, 2001
--------------------------------------------------------------
Industrias Klabin de Papel e Celulose SA, Latin America's largest
pulp and paper company is expected to release first-quarter
financial information on May 7 before Brazilian markets open at
10 a.m. (9 a.m. New York time), Bloomberg said Friday. According
to the median of three analysts surveyed by Bloomberg News,
Klabin will report a first-quarter consolidated net loss of 80
million reais ($36 million), or about 8 centavos a share,
compared with a profit of 37.7 million reais, or 5 centavos per
shares in the first quarter 2000. The highest estimate of net
income was 100 million reais for the quarter, the lowest 59
million reais. The average estimate was also 80 million reais.

A 9.4-percent decrease in the value of Brazil's real during the
first quarter drove up the local currency value of the company's
debt. Of the 2.63 billion reais the company had in debt at the
end of 2000, 1.64 billion, or 63 percent, was in dollars.

Klabin is also expected to record extraordinary expenses related
to last year's purchase of the Igaras paper mill.

"Losses will come because of foreign-currency-related debt losses
and the continuing costs of buying the Igaras mill," said Marcio
Lins, a pulp and paper analyst at Banco Pactual in Rio de
Janeiro. "The company is heavily indebted," he added.


PAO DE ACUCAR: To Dismiss 700 Workers To Improve Operations
-----------------------------------------------------------
Brazil's biggest retailer, Pao de Acucar, is set to dismiss 700
employees, or one-third of its head office, as part of a move to
improve its commercial operations, an unnamed source close to the
firm revealed in a Reuters Saturday report. Starting on Monday,
the company, also known as Companhia Brasileira de Distribuicao
(CBD), will sack its entire commercial department as it believes
that its current one-size-fits-all buying and pricing policy is
not meeting the needs of the group's four separate divisions, the
source explained.

"It's basically refocusing the structure of the head office, but
means nothing more than that," he said.

According to the source, the redundancies are not the beginning
of a fundamental restructuring of the company and will not be
followed by cuts in other areas of the 55,000-strong work force,
although recent earnings have a hand in the decision. Pao de
Acucar posted an increase in first quarter net profit to 51.9
million reais ($23.5 million) from 42 million reais over the
three-month period a year ago, but the small rise in same store
results disappointed some analysts.



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M E X I C O
===========

CINTRA: Congress Defends Proposed Amendment
-------------------------------------------
"The proposed amendment to Mexico's federal Economic Competition
Act neither seeks to ensure that Mexico's airline industry will
remain in the hands of the state nor implies that the government
will again be forced to bail airlines out of financial
difficulties." This statement, according to an Infolatina
Thursday report, was issued by flight attendants union leader
Alejandra Barrales, who is also a member of the Lower House of
the Mexican Congress for the leftist Party of the Democratic
Revolution (PRD). She denied that the amendment had been stalled,
adding that the bank bailout agency IPAB had planned to sell the
company's assets separately, and in the absence of a clear air
transport industry policy on the part of the administration of
President Vicente Fox.

Opposition-controlled Mexican Congress has made a proposal to the
country's federal Economic Competition Commission that would
exempt government-owned airline holding company Cintra from
standard anti-monopoly regulations.

IPAB has postponed the sale of Cintra, which controls the
country's two major airlines Mexicana de Aviacion and Aeromexico.
The sale and plan to split up the two airlines is controversial
and IPAB has said that the sale will be delayed until the
government can develop a national airline policy.


GRUPO SIDEK: Assets Sales Report from April 1, to April 30, 2001
----------------------------------------------------------------
Grupo Sidek, S.A. de C.V. (OTC Bulletin Board: GPSAY GPSBY) today
announced a report regarding assets sales from April 1, 2001 to
April 30, 2001, pursuant to its obligations under the
restructuring agreements entered into with Sidek Creditor Trust:

   ASSETS SALES REPORT FROM APRIL 1, 2001 TO APRIL 30, 2001

(Figures in US$ thousands)

Assets with Reorganization
Value higher than
       USD$ 5,000             Sales Value    Reorganization
                                                  Value

      I. Hotels                     9,100        19,354
      II. Real Estate                   0             0
      III. Marinas and Golfs            0             0
      IV. Other                         0             0
      Subtotal                      9,100        19,354

Assets with Reorganization
Value less than
USD$ 5,000

      Subtotal (transactions)       1,034            N.A.
      Total                        10,134            N.A.


MEAHORRO: Shuts Down Operations Indefinitely
--------------------------------------------
After falling short of shareholders' expectations, Mexican
discount etailer Meahorro (www.meahorro.com) has shut down its
operations indefinitely, General Director Emilio Fernandez
revealed in a Business News Americas report published Thursday.

"We are reviewing some numbers and our business model to be able
to launch a more solid model. A large focus of ours was to raise
money from an investor and the way things were going we could not
make it happen," he said.

In December, the company was aiming for a 1Q01 breakeven and some
20,000 site transactions last year, however, it reached less than
half of that amount. It was also looking to introduce an office
supplies service for companies in 1Q01, but the initiative
remained on hold and the site was taken off the air in mid-
February. Fernandez revealed that the company also underwent a
series of internal disputes between its partners, which
eventually brought about a reworked business plan. When the
company will resume operations is still unclear. The partners
haven't ruled out the the option of closnig down permanently.


SAVIA: In Discussions With ING Group Over Acquisition
-----------------------------------------------------
ING (NYSE: ING), confirmed today that it is in discussions with
Savia S.A. de C.V. (BMV: SAVIA, NYSE: VAI), about acquiring
controlling interest in Seguros Comercial America, a subsidiary
of Savia.

On 15 February 2000, ING announced a long-term partnership with
Savia through acquiring a 49% stake in a new holding company that
holds 84.65% of the capital stock in Seguros Comercial America
(SCA). SCA is Mexico's largest insurance company. SCA operates an
integrated financial services business, which is highly
compatible with that of ING.

ING is committed to communicating additional information at the
appropriate time.


SAVIA: Bank Creditors Deny Reaching Agreement With Company
----------------------------------------------------------
Wednesday's widely-circulated report suggesting that Mexican
agro-biotechnology company Savia has reached an agreement in
principle with its creditors on a debt-restructuring plan, is
fictional, according to an Infolatina report published Friday.
Savia's major bank creditors, which include Santander Mexicano
and Dresdner Bank, on Thursday, denied any such agreement had
been struck.

Savia is a subsidiary of Monterrey-based conglomerate Grupo
Pulsar, which owes Santander and Dresdner, together, an estimated
US$400 million.

Savia reported a first-quarter net loss of 148.8 million pesos,
6.8 percent less than its net loss of 158.9 million pesos in the
year-ago period. First-quarter operating profit, however, was
750.4 million pesos, up 399.5 percent from the year ago period.
Sales for the quarter totaled 8.0 billion pesos, down 1.6 percent


TRIBASA: Shares Suspended At Mexican Stock Exchange
---------------------------------------------------
Trading in the shares of struggling Mexican engineering and
construction firm Tribasa was suspended Thursday by the Mexican
Stock Exchange (BMV) as a consequence to the company's failure to
submit a quarterly financial report to the exchange, Infolatina
said in its Friday report. In a press release issued by the
Exchange authorities, BMV said it has suspended trading in
Tribasa shares because the company wasn't able to provide
earnings report in compliance with the regulations of the
National Banking and Securities Commission (CNBV). The press
release further stated that Tribasa was unable to specify a date
at which it would be able to provide the report.

The BMV said the company's failure to provide an earnings report
meant there was "insufficient information on which to base proper
investment decisions."

Tribasa has been in debt-restructuring talks with creditors since
late last year.



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

VENEPAL: Has Until May 15 To Incorporate New Partner
----------------------------------------------------
Venepal, wrestling with financial problems for the last two years
including some US$58 million in restructured debt, has until May
15, 2001 to incorporate a new partner, South American Business
Information reported Friday. The deadline was set by the banking
sector and interested parties such as Banco del Caribe, Corp
Banca and Banco Mercantil. Smurfit Carton de Venezuela, after
having signed an agreement of intent on March 15, 2001, remains
the candidate most likely to become the company's new partner.
Should Smurfit decide to withdraw its intent to buy a controlling
stake in Venepal, the struggling paper maker would be forced to
declare itself insolvent. Smurfit, which has already acquired
Venepal's Colombian factory, would convert bonds worth US$37
million into a majority stake in the Venezuelan paper group
Venepal.




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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Information contained herein is obtained from sources believed to
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delivered via e-mail.  Additional e-mail subscriptions for
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or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 301/951-6400.


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