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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

            Thursday, May 17, 2001, Vol. 2, Issue 97

                           Headlines



A R G E N T I N A

AEROLINEAS ARGENTINAS: Eurnekian In Talks With Delta, Lufthansa
AEROLINEAS ARGENTINAS: Gov, Unions Make Proposal To Spanish Gov


B R A Z I L

CESP: Reports First-Quarter Results; R$356.22M Loss
CESP: State Government Postpones Privatization
ELETROPAULO: Registers Losses In 1Q01
GLOBOCABO: To Reduce This Year's Investments By 25 Percent
LIGHT: First Quarter Net Losses Amount To R$167M
LOJAS AMERICANAS: Registers Losses In 1Q01


C H I L E

ENAMI: In Talks With French Group Regarding Ventanas Stake


M E X I C O

BANCRECER: Sale Changes Future Environment In Mexican Banking
EUZKADI: Management, Union Leaders Meet To Stop Plant Closure
SAVIA: Seeks Banobras' Financial Help To Restructure Debt
TELEVISA: Remains In Talks With Univision, Telemundo
TELEVISA: In Preliminary Discussions With French Company


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Eurnekian In Talks With Delta, Lufthansa
---------------------------------------------------------------
Eduardo Eurnekian, chairman of Argentine airport management
company Aeropuertos Argentina 2000, maintained he is in talks
with US airline Delta and Lufthansa Technics, the technical
division of the German airline, ABC News reported Tuesday.
According to the report, the Argentine businessman aims to
negotiate a plan with the two airlines over a planned purchase of
a majority stake held by Spanish state industrial holding company
SEPI in troubled Argentine airline Aerolineas Argentinas.

Eurnekian met on Friday with SEPI representatives to discuss the
entry of the Argentine airport management group to Aerolineas'
capital. Mr. Eurnekian also stated that he was prepared to invest
the necessary sum to cover the airline's short-term debts.


AEROLINEAS ARGENTINAS: Gov, Unions Make Proposal To Spanish Gov
---------------------------------------------------------------
Struggling to resolve the crisis at Argentine airline Aerolineas
Argentinas, aviation workers unions and the government prepared a
proposal to present Tuesday to the Spanish government, Labor
Minister Patricia Bullrich disclosed in an AFX Europe report.
According to Bullrich, her ministry and five of the seven
aviation workers unions are working on the proposal. She withheld
any details of the proposal other than to say "it is a good
proposal and it would be the start of a solution." The minister
said the five unions represent 5,000 workers, and negotiations
with two other two unions are underway.



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B R A Z I L
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CESP: Reports First-Quarter Results; R$356.22M Loss
---------------------------------------------------
Brazilian power utility Companhia Energ,tica de Sao Paulo (Cesp)
posted a first-quarter net loss of R$352.36 million, reversing a
profit of R$96.74 million in the same period last year, according
to a Brazil Financial Wire report published Tuesday. Net revenues
advanced 19.6 percent to R$356.22 million. Operating expenses
amounted to R$704.73 million, against earnings of R$96.52 million
in the first three months of the previous year. The company's net
financial losses increased 49.7 percent to R$125.99 million.
Additionally, the company registered operating losses of R$
525.35 million, reversing a profit of R$ 251.30 million in the
year-ago period. Non-operating losses increased 98.5 percent to
R$ 4.92 million in the first quarter. The weakening of the
Brazilian real had an adverse impact of R$578.73 million on
Cesp's results in the first quarter. As of March 31, Cesp's net
equity totaled R$10.34 billion. Book value per share amounted to
R$0.11036.


CESP: State Government Postpones Privatization
----------------------------------------------
The state of Sao Paulo on Tuesday indefinitely suspended plans to
privatize CESP Parana, one of Brazil's largest electric energy
producers, officials said in an EFE report Wednesday. The
postponement follows Sao Paulo Governor Geraldo Alckmin's
decision not to appeal a court ruling that called into question
the minimum sale price the state was asking for CESP Parana.

Late Monday, a federal court granted an injunction against the
auction, after hearing allegations by Brazilian opposition party
PT that Cesp had been undervalued. Cesp would be offered for a
minimum asking price of R$ 1.74 billion.

Moreover, contributing to the postponement of the planned auction
sale was the lack of information about the rules for energy
rationing, which created uncertainties in the government and
among investors. The Brazilian government, facing energy
shortages across the country from drought and years of under
investment in power generation, plans to impose a 20 percent
reduction on power consumption starting June 1 through supply
cuts and incentives to lower usage.

"We thought it was prudent to postpone the auction to analyze the
rules that will come out Friday," said Andre Franco Montoro
Filho, Sao Paulo state planning secretary.

Meanwhile, according to Sao Paulo state energy secretary, Mauro
Arce, bidding terms for Cesp will remain unchanged. He said that
the government had consulted some of Cesp's potential bidders
before deciding to delay the sale.

"We've talked with potential buyers and we could notice that they
also had doubts about the impact of Brazil's (upcoming) power
rationing plan on Cesp," said Arce. Separately, Arce said that
the future controller of Cesp must stick to the company's
expansion plans.

According to bidding rules, Cesp's future owner is required to
boost power generation by 16.5 percent, which represents
additional power of 1,170 megawatts, in the next eight years.


ELETROPAULO: Registers Losses In 1Q01
-------------------------------------
Sao Paulo-based power distributor Eletropaulo posted net losses
of R$129.39 million in the first quarter of 2001, against profits
of R$30.78 million in the same quarter a year ago, according to a
Brazil Financial Wire Tuesday report. The company saw an 11-
percent increase in net revenues, to R$1.17 billion. Net
financial losses rose 109.2 percent, to R$194.55 million.
Operating losses were at R$104.11 million, a reverse in the
R$52.90 million in profits posted in the same period in 2000.
Eletropaulo also registered non-operating losses of R$5.03
million, reversing profits of R$1.08 million in the comparable
quarter last year. Loss per share stood at R$0.00309. As of March
31, the company's net equity stood at R$2.43 billion. Book value
per share was R$0.05804. Data are consolidated.


GLOBOCABO: To Reduce This Year's Investments By 25 Percent
----------------------------------------------------------
Broadband cable TV and internet service provider Globocabo on
Tuesday announced plans to postpone 25 percent of this year's
investments, Brazil Financial Wire said in a Tuesday report.
According to Leonardo Pereira, finance executive director, the
company intends to invest $200 million in total this year but due
to volatility on the local interest and currency markets, it will
postpone 25 percent of its investments.

The company is also looking to reduce operating expenses by R$32
million from May to December of 2001 as well, according to
Pereira. The real's devaluation to the U.S. dollar had a negative
impact on Globocabo's first quarter figures, providing additional
motive for the postponement.

The company reportedly has debts amounting to R$ 1.76 billion, 60
percent of which are linked to the dollar.

"Our dollar liabilities are covered in the near-term," said
Pereira. "That is why the real's downturn won't impact our cash
flow shortly."

According to Pereira, the only dollar debt Globocabo has to
settle in the next 12 months is a R$ 38million credit line from
IFC, the World Bank's arm for the private sector. In 2002, the
company will have to make payments on a R$69 million loan that it
used to take over Net Sul, a cable operator in southern Brazil.
Sixty-four percent of Globocabo's total debts fall due from 2003,
Pereira added.


LIGHT: First Quarter Net Losses Amount To R$167M
------------------------------------------------
Brazil's Light Servicos de Eletricidade SA, controlled by AES
Corp. and Electricite de France, posted net losses of R$166.5
million in the first quarter of this year, compared with net
income of R$26.3 million in the same period a year ago, Bloomberg
said in a report Tuesday. Consolidated net sales rose 13 percent
to R$2.09 billion during the period from R$1.85 billion in the
comparable quarter a year ago. The value of Brazil's real,
though, weakened 9.4 percent against the dollar in the quarter
ending March 31, driving up the local currency value of dollar
debts and the local currency amounts needed to pay interest in
dollars. Light had short and long-term debt of about R$7.53
billion at the end of 2000, about 75 percent of it in dollars.


LOJAS AMERICANAS: Registers Losses In 1Q01
------------------------------------------
Brazilian retail chain Lojas Americanas SA registered R$10.62
million in first-quarterly losses, 46.6 percent less than the
negative result posted in the same year-ago period, Brazil
Financial Wire said in a report Tuesday. Net revenue was up by
2.06 percent to R$ 286.83 million, while gross profit increased
6.63 percent to R$ 80.24 million. Its net financial loss soared
27.5 percent to R$11.09 million with its operating loss dropping
16.62 percent to R$ 17.72 million. At the end of March, Lojas
Americanas' net equity stood at R$ 167.57 million.

Lojas Americanas, which ended year 2000 with negative financial
results of R$47 million, is a chain of over 87 discount
department stores distributed across Brazil providing customers
with an ample selection of merchandise such as, household
appliances and soft furnishing items, clothing and other related
items.



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C H I L E
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ENAMI: In Talks With French Group Regarding Ventanas Stake
----------------------------------------------------------
French metals group Outokumpu is said to have eyes in a 15
percent stake in Ventanas. The position in the copper
smelter/refinery in central Chile's Region V is currently held by
Chile's state minerals processing company (Enami) according to a
Business News Americas report Tuesday. Talks between the French
group and the financially-strapped Chilean company regarding the
subject are underway.

Outokumpu's metallurgical business development manager Juan
Pasten revealed that the company is interested in providing
technology for smelters and financing in return for equity
stakes.



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

BANCRECER: Sale Changes Future Environment In Mexican Banking
-------------------------------------------------------------
Mexico could see a significant change in the face of its
financial services sector after the Mexican bank bailout agency
IPAB sells Bancrecer to one of the potential bidders. Finance
ministry senior official Jose Antonio Meade made the assertion in
a Reforma/Infolatina Tuesday issue.

Bancrecer operates the country's fourth-largest network of retail
bank branches. If the country's No. 2 bank, Banamex, were to
acquire Bancrecer, he said, it would reclaim the No. 1 spot taken
last year by BBVA-Bancomer. Even if a small bank were to acquire
Bancrecer, it would become the country's fifth-largest bank,
Meade said.


EUZKADI: Management, Union Leaders Meet To Stop Plant Closure
-------------------------------------------------------------
In an effort to save a Euzkadi tire plant in El Salto, Jalisco
from closure, a meeting was scheduled Wednesday between
management and labor union leaders, according to a report Tuesday
in Reforma/Infolatina. The meeting, which was slated to be held
in Mexico City, will see union leader Alvaro Ramirez presenting
to Euzkadi management a proposal regarding changes to work
practices at the plant.

Previously, Mexican tire maker Hulera Euzkadi, a unit of German
tire and auto parts company Continental AG, announced it would
lay off 130-250 workers to ensure the plant's survival. The
company issued a statement explaining that the job cuts were
needed because of the contraction of the Mexican tire market, the
high costs of low-level production, indiscriminate imports and
rigid labor conditions.


SAVIA: Seeks Banobras' Financial Help To Restructure Debt
---------------------------------------------------------
In a move seen unusual by many, Mexican agro-biotechnology
company Savia, a subsidiary of Monterrey-based Grupo Pulsar,
sought the financial assistance of state-run development bank
Banobras, Reforma/Infolatina said Tuesday. Savia, currently under
pressure to reduce its estimated $900 million debt, approached
Banobras. Banobras normally provides loans to state and local
government to undertake major public works projects, although it
occasionally lends to construction firms. Savia has been battered
with debts after over-investing in subsidiary Seminis, one of the
world's leading producers of fruit and vegetable seeds.


TELEVISA: Remains In Talks With Univision, Telemundo
---------------------------------------------------
Aiming to get a boost in its role in U.S. Hispanic television,
Mexican media giant Grupo Televisa is continuing discussions with
network Univision, according to the group's chairman, Emilio
Azcarraga Jean, in a Reforma/Infolatina report published Tuesday.

"With Univision's acquisition of USA Network, the opportunity for
a better relationship has arisen, and, at the same time, other
options to look at have arisen for us, because we think that that
the programming we've been producing for many years has proved to
be successful," Azcarraga said.

Televisa is seeking to boost its stake in Univision from 6
percent to 25 percent, and increase program royalties paid by
Univision from 9 percent to around 12 percent. A Televisa-
Univision agreement is expected in June.

Meanwhile, Televisa is also reportedly in talks with Telemundo.
According to reports, discussions are with respect to the 17,000
hours of Spanish-language programming that the Mexican company is
believed to be willing to provide to Univision - for transmission
on Univision acquisition USA Network - depending on the terms to
which Univision is willing to agree. If Televisa and Univision
fail to agree on terms, the 17,000 hours in programming likely
will be provided to Telemundo.


TELEVISA: In Preliminary Discussions With French Company
----------------------------------------------------------
Televisa is looking to sell a 24.5-percent stake in Cablevision
to Telewest, France's leading cable-TV provider, in exchange for
fresh capital and technology-development support. Mexican media
giant Grupo Televisa is now in preliminary talks with French
cable-TV company Telewest over the sale of its stake in the
Mexican cable subsidiary, Reforma/Infolatina reported Tuesday.
Telefonos de Mexico (Telmex) magnate Carlos Slim owns a large
minority stake in Cablevision, and the potential deal between
Televisa and Telewest reportedly would significantly reduce
Slim's position.





S U B S C R I P T I O N   I N F O R M A T I O N

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