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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

            Monday, May 14, 2001, Vol. 2, Issue 94

                           Headlines



A N T I G U A   &   B A R B U D A

LIAT: Considers Offering Voluntary Retirement To 100 Workers


A R G E N T I N A

AEROLINEAS ARGENTINAS: Government Asks Sepi To Resolve Crisis


B O L I V I A

EL MUTUN: Attracts Interest From European Companies


B R A Z I L

CESP: Cemig Cleared To Participate In Auction
CVRD: Caemi Shareholders Apprehensive Of Mitsui's Move
CVRD: JBP Can Only Exercise Right After Auction
PAO DE ACUCAR: Strategy No Surprise To Sector Specialists


C H I L E

STARMEDIA: 1Q01 Financial Results; Revenues Grew 59%


M E X I C O

AHMSA: Holding Company Reaches Preliminary Agreement With Banamex
GIMSA: Crisis Pushes Company To Close Plant
TELEVISA: Talking With Euro Company Over Subsidiary Expansion


     - - - - - - - - - -


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A N T I G U A   &   B A R B U D A
=================================

LIAT: Considers Offering Voluntary Retirement To 100 Workers
------------------------------------------------------------
In an effort to attract more potential investors, financially-
strapped regional airline LIAT (1974) Limited is mulling over a
plan to offer 100 workers across the Caribbean early voluntary
retirement packages, according to a report Thursday in Caribbean
News Agency. The airline is also looking to slash operational
costs by at least 20 percent, part of a plan which calls for  
approval from the Board of Directors. However, Chief Executive
Officer (CEO) Garry Cullen expressed confidence in getting the go
ahead at their next meeting on May 22 to be held in Antigua.
According to Cullen, once an agreement is reached on ways of
finding the estimated EC$5 million one-time payment, arrangements
could begin for the voluntary retirement package as early as next
month.



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A R G E N T I N A
=================

AEROLINEAS ARGENTINAS: Government Asks Sepi To Resolve Crisis
-------------------------------------------------------------
The Argentinean government officially asked Sepi, the Spanish
state holding company and controller of the airline, to find a
solution to the airline's financial problem, Ambito Financiero
reported Thursday. Wednesday employees declared a state of alert
and protests after they discovered that they will be getting
their paychecks for April on the 22nd of May.  

APA, the union of airline workers, which was the only union to
accept a cut in pay for Aerolineas Argentinas' employees in
return for job stability, announced Wednesday that the airline's
workers were prepared to protest in the terminal building at
Buenos Aires airport.

Patricia Bullrich, transport minister, expressed her confidence
that Sepi would help Aerolineas Argentinas emerge from its
crisis. However, she did not disclose whether Sepi would assume
Aerolineas Argentinas' debts, a move, which would enable the
Argentinean government to sell the airline. Aerolineas must
settle hefty debts and soothe worker rows, or look for new owners
in order to avoid liquidation.



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B O L I V I A
=============

EL MUTUN: Attracts Interest From European Companies
---------------------------------------------------
A consortium composed of German and Austrian companies is said to
have an interest on an auction for a contract to operate
Bolivia's El Mutun iron ore deposit and steel complex, Business
News Americas said Thursday. Accordingly, the consortium plans to
visit a plant in the country to examine technology they could use
at the facility. State mining company Comibol spokesperson for
the El Mutun process, Rolando Ibanez, neither provided the names
of the companies concerned nor disclosed the name of the plant.
However, Ibanez did say the names of the companies involved, as
well as the responsibilities of each company, would be released
after the visit.

Financing for the initiative has been guaranteed by German firms
and Brazilian companies, which will supply equipment and
machinery with European technology, while one member of the
consortium will secure a market.

According to Ibanez, to date the German-Austrian consortium has
offered the best terms for El Mutun and Bolivia as a whole, but
he expects that the project will undoubtedly draw the interest of
other companies once the investment bank begins to work on the
auction process.

As soon as an agreement is finalized, the consortium wants to
carry out a feasibility study, reviewing the geological quality
of the material and doing tests, "because we have material close
to the surface that can be worked open pit and with a relatively
simple process of washing and classifying," Ibanez said.



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B R A Z I L
===========

CESP: Cemig Cleared To Participate In Auction
---------------------------------------------
Cia Energetica de Minas Gerais (Cemig) can participate in the bid
for the control of Cia. Energ‚tica de Sao Paulo (Cesp) at the
upcoming sale auction slated for May 16, but under specific
conditions, according to a Brazil Financial Wire report Thursday.
In a statement sent to the Bovespa exchange, energy sector
regulator Aneel explained that Cemig must form part of a
consortium in order to participate.

"Cemig is qualified to acquire shares issued by Cesp Parana as
long as the volume acquired does not make the company a majority
shareholder," the note said, adding, "Cemig can only participate
if it forms a consortium."

As it stands, the six firms currently qualified for the Cesp bid
are Duke Energy Corp., AES Corp., NRG Energy Inc., Electricit‚ de
France, Electricidade de Portugal and Cemig.

Cesp, which provides about half of the power to Brazil's richest
and most populous Sao Paulo state, goes on the auction block at a
base price of 1.74 billion reals ($765 million) in this second
attempt to sell it.

The Sao Paulo government hopes the sale of Cesp will further open
the Brazilian electricity market to private investment, which is
seen as a key to overcoming the current acute power crisis in
Latin America's largest country.


CVRD: Caemi Shareholders Apprehensive Of Mitsui's Move
------------------------------------------------------
Shareholders of Caemi Metalurgica SA, Brazil's No. 2 iron ore
miner, are apprehensive about Mitsui & Co.'s move to postpone
buying the 60 percent of Caemi's voting shares it doesn't already
own from Brazil's Frering brothers, Bloomberg reported Thursday.
Caemi shareholders criticized the Japanese company and CVRD for
shirking deadlines to pay $332 million for their shares in the
company. They fear that Mitsui's recent move for requesting a
180-day postponement after it earlier agreed to pay by May 20
would stall the planned buyout.

Mitsui, which plans to sell half of Caemi's voting shares later
to Brazil's top miner, Cia. Vale do Rio Doce, wants guarantees
the transaction will be approved by antitrust authorities in
Europe, where CVRD sells much of its ore. Analysts said approval
from European authorities may take five months.

Caemi began arbitration procedures with Mitsui in New York to
ensure payment for the Frering's shares is forthcoming. Caemi's
controlling shareholders disagree with Mitsui, and refute the
company's side agreement with CVRD, (Caemi's) main competitor,
Caemi said in a statement sent to the Sao Paulo Stock Exchange.


CVRD: JBP Can Only Exercise Right After Auction
-----------------------------------------------
Contrary to recent local reports, Japanese consortium JBP has not
yet exercised its preemptive right to acquire Companhia Vale do
Rio Doce's (CVRD's) stake in pulp and paper company Celulose
Nipo-Brasileira SA (Cenibra), Dow Jones said Friday in a report.
JBP, which is already a Cenibra shareholder with the remaining
48.52 percent, could only be allowed to exercise its right after
the auction, yet to be announced "at an opportune moment,"
according to CVRD's statement to the local stock exchange. After
the auction, JBP could match the highest offer and preempt the
top bidder or simply walk away from the deal. CVRD owns a 51.48
percent stake in Cenibra's total capital. Word on the street
values the deal at about $600 million.


PAO DE ACUCAR: Strategy No Surprise To Sector Specialists
---------------------------------------------------------
The layoffs announced didn't come as a surprise to specialists in
the sector when the Brazilian supermarket chain Pao de Acucar or
CDB (Companhia Brasileira de Distribuicao) outlined its cost-
cutting strategy, South American Business Information reported
Thursday. The company is aiming to save R$58 million over the
next 12 months, and has its costs estimated at R$5 million.

CDB previously said that on Monday, it 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. Further, it will dismiss 550
employees, or 1 percent of its staff.



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C H I L E
=========

STARMEDIA: 1Q01 Financial Results; Revenues Grew 59%
----------------------------------------------------
StarMedia Network, Inc., (Nasdaq: STRM), the leading Internet
media company targeting Spanish- and Portuguese-speaking
audiences worldwide, today announced financial results for the
first quarter ended March 31, 2001.

-- Revenues were $16.0 million versus the $10.1 million reported
in the first quarter 2000, representing a 59% increase.

-- Earnings per share were $(0.46) versus $(0.54) reported for
the same period one year ago, representing a 15% improvement.

-- During the month of March 2001, StarMedia Network had 35.1
million unique users.

-- Page views during the quarter increased to 4.0 billion, 86%
higher than the same period in 2000.

* Unique user and page view figures have been audited by ABC
Interactive, in compliance with Internet Advertising Bureau (IAB)
standards. ABC Interactive is the interactive auditing unit of
the Audit Bureau of Circulations (ABC) that provides online
auditing services for leading Internet companies worldwide.

StarMedia Network reported $16.0 million in total revenues for
the quarter ended March 31, 2001, a 59% increase over the $10.1
million in total revenues reported for the quarter ended March
31, 2000.

For the quarter ended March 31, 2001, StarMedia Network reported
a net loss of $31.2 million, or a basic and diluted net loss per
share of $0.46. For the first time ever, net losses decreased
both on a sequential and on a year-over-year basis. This
represents a 5% improvement over the pro forma net loss of $33.0
million reported in the quarter ended December 31, 2000, and an
11% improvement over the net loss of $35.1 million reported for
the quarter ended March 31, 2000. This quarter's net loss per
share figure shows a 6% improvement over the net loss of $0.49,
on a pro forma basis, for the quarter ended December 31, 2000 and
a 15% improvement over the net loss per share of $0.54 reported
for the quarter ended March 31, 2000.

This quarter saw our first ever year over year narrowing of
losses, while our revenues and traffic figures continued to
demonstrate strong growth, said Fernando Espuelas, Chairman and
Chief Executive Officer of StarMedia Network. We remain in a
strong position, with an excellent base from which we will drive
future growth and financial performance.

AUDIENCE GROWTH AND USAGE

StarMedia Network had 35.1 million unique users worldwide during
the month of March 2001. This figure represents unduplicated
unique users of the StarMedia.com, LatinRed and Cade? brands.

Page views in the quarter ended March 31, 2001 were 4.0 billion
versus the 3.9 billion reported in the quarter ended December 31,
2000 and an

86% increase over the 2.1 billion in the quarter ended March 31,
2000.

Unique user and page view figures have been audited by ABC
Interactive, in compliance with Internet Advertising Bureau (IAB)
standards. ABC Interactive is the interactive auditing unit of
the Audit Bureau of Circulations (ABC), which provides online
auditing services for leading Internet companies worldwide.

Active e-mail accounts during the quarter were 5.1 million, a 56%
increase over the 3.3 million active e-mail accounts in the same
period a year ago. 'Active' e-mail accounts refers to those e-
mail accounts that have been used at least once within the last
90 days.

BUSINESS PARTNERSHIP WITH CINGULAR WIRELESS

During the quarter, StarMedia and Cingular Wireless, the second
largest wireless carrier in the U.S., announced the launch of Mi
Ventana Movil, the first Hispanic wireless Internet portal
offered by a wireless carrier in the United States. Mi Ventana
Movil offers the same access in Spanish to on-demand personalized
information as Cingular's My Wireless Window provides its
English-speaking customers. The wireless portal, accessible from
a mobile phone or personal computer, includes calendar, shopping,
e-mail, address book and instant messaging functions. As part of
this strategic relationship, StarMedia will provide Spanish-
language content, community applications and Hispanic marketing
expertise.

REDUCTION OF OPERATING EXPENSES

In order to ensure the continued success of StarMedia Network's
core businesses within the current economic and capital market
environment, the Company is revising operations and focusing on
areas of greatest operating margin. This initiative is designed
to heighten operating efficiencies and is expected to result in a
reduction of approximately 30-35% of cash operating expenses over
the second half of 2001. Included as part of this initiative is a
reduction of StarMedia Network's staff by approximately 25%
across all functions, levels and markets of the Company. To cover
the costs of the program, the Company anticipates it will take a
one-time charge of $4-6 million in the second quarter of this
year.



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

AHMSA: Holding Company Reaches Preliminary Agreement With Banamex
-----------------------------------------------------------------
Grupo Acero del Norte (GAN), a holding company for leading
Mexican steelmaker Altos Hornos de Mexico (AHMSA), recently
struck a preliminary deal with Banamex, one of its bank
creditors, according to a report Thursday in Corporate Mexico.
The move signals that the company is making progress toward
restructuring its debt, which stands at around 350 million
dollars. According to the agreement, GAN will pay Banamex $20
million and win back guarantees held by the bank that will
effectively give it a 17-percent stake in AHMSA. GAN will get
money from dividends and revenue generated by its other
subsidiaries in order to make the payment. Reports suggest that
the company is now executing the same process with other bank
creditors such as Societe Generale and West Merchandt Bank.
Mexican state-owned development bank Banobras, to which GAN owes
$60 million, is poised to sign an agreement approving the
restructuring plan.


GIMSA: Crisis Pushes Company To Close Plant
-------------------------------------------
Grupo Industrial Monclova (GIMSA) will be forced to shut down the
single plant operated by its subsidiary Fundicion Monclova
(Fumosa) because of the crisis hitting Mexico's steel industry,
Infolatina said in a report Thursday. Consequently, the decision
will see the company's total workforce of 356 employees losing
their jobs when by June 15.

"Despite efforts made during the past several years to keep the
plant operating, the crisis being suffered by the steel industry,
added to the high energy prices and over-valuation of the peso,
has caused major losses for the company (Fumosa) that render its
continued operation unsustainable," GIMSA said.


TELEVISA: Talking With Euro Company Over Subsidiary Expansion
-------------------------------------------------------------
Mexican media giant Grupo Televisa has launched talks with an
unnamed European company as it searches for a new financial
partner willing to inject an estimated $200 million in the
company. The money would be used to finance its expansion project
for cable-TV subsidiary Cablevision, Reforma/Infolatina reported
Thursday. The European company in question is believed to have
eyes on a stake in Cablevision, the company jointly owned by
Televisa and Telefonos de Mexico (Telmex) magnate Carlos Slim.
Televisa plans to transform it into a nationwide provider of
broad-band services. The proposed deal reportedly would see Slim
give up part of his stake in Cablevision.




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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