/raid1/www/Hosts/bankrupt/TCRLA_Public/010523.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

            Wednesday, May 23, 2001, Vol. 2, Issue 101

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Unions, Cabin Crews Meet With Bullrich
AEROLINEAS ARGENTINAS: Sepi To Announce Course Of Action Soon


B R A Z I L

BAMERINDUS: Central Bank's Investigation Reaveals Fraud
INDUSTRIAS KLABIN: Posts Losses Due To US Dollar Boom
SUZANO: To Conclude Debt Restructuring By June
VARIG: FRBPar Decides Future Control
XEROX: SEC Probes Citibank Transaction


E C U A D O R

FILANBANCO: Government To Issue $300M Worth Of Bonds


M E X I C O

GRUPO BITAL: Immediate Future Still Unclear
GRUPO VITRO: Looks To Refinance Short-Term Debts
GRUPO TELEVISA: Still Contemplating Editorial Sell-Off


P E R U

CONSORCIO TEXTIL: Creditors To Introduce Restructuring Plan


V E N E Z U E L A

SIDOR: To Sign Agreement With Union Leaders This Week
SIVENSA: Puts Troubled Division Up For Sale



     - - - - - - - - - -


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Unions, Cabin Crews Meet With Bullrich
-------------------------------------------------------------
Argentinean cabin crew and technician unions met with Argentinean
employment minister Patricia Bullrich last week. The meeting
centered around reaching a decision regarding a voluntary
arbitration with the Argentinean national carrier Aerolineas
Argentinas, according to an Expansion report. Two of the seven
unions representing the carrier's employees must decide whether
to accept the offer of the Argentine authorities to participate
in an arbitration process. The offer has already been accepted by
the government.

Meanwhile, some Argentinean deputies were expected to travel to
Spain to ask the Spanish government, which controls the airline
via the Spanish state industrial holding company Sepi, to ensure
the future of the airline without making job cuts.


AEROLINEAS ARGENTINAS: Sepi To Announce Course Of Action Soon
-------------------------------------------------------------
Sepi, the Spanish state holding company and controller of
Aerolineas Argentinas with an 85-percent stake, is expected to
make an announcement over the weekend regarding its course of
action for airline Aerolineas Argentinas, Ambito Financiero
reported Monday. The holding company could either make further
jobs cuts, which could only provoke a large scale strike,
possibly leading to the airline's closure, or pay the wages that
the workers are owed for April and wait for the response from the
technical workers' union to the labor ministry's arbitration
proposal.



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B R A Z I L
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BAMERINDUS: Central Bank's Investigation Reaveals Fraud
-------------------------------------------------------
An 18 month investigation by the Central Bank of Brazil, found
that management did commit fraud during Bamerindus's debt
renegotiation, according to a report Monday in South American
Business Information. The Bamerindus bank was in the process of
being liquidated since 1997, when its assets were spun off to be
sold to HSBC. Trescinco Distribuidora de Automoveis, a car
reseller, was one of the companies accused of having benefited
from Bamerindus' debt renegotiation. Its debts with Bamerindus
totaled R$21.7 million, but it only paid R$14.5 million. In
another instance, Jamari Participacoes' debts of R$3.7 million
were also reduced to only R$2.4mil.


INDUSTRIAS KLABIN: Posts Losses Due To US Dollar Boom
-----------------------------------------------------
Industrias Klabin de Papel e Celulose SA, Latin America's largest
pulp and paper company, blamed its debt of US$800 million (almost
R$2.8 billion) for its financial difficulties in the first three
months of 2001, South American Business Information reported
Monday. The amount represents 64 percent of the company's overall
indebtedness. Klabin saw a loss of R$79.7 million in the first
quarter due to the increase in the value of the US dollar. By
March, its total assets reached US$2.046 billion and its net
worth was roughly US$661 million. The company's operating income
increased from US$233 million to US$248 million in March 2001.
Klabin posted an operating profit of US$57 million and a negative
net profit of US$37 million.


SUZANO: To Conclude Debt Restructuring By June
----------------------------------------------
Paper and woodpulp producer Companhia Suzano de Papel e Celulose,
which recently completed the acquisition of Bahia Sul in a
transaction worth R$320 million, is to conclude the restructuring
of its liabilities By June of this year, according to a South
American Business Information report Monday. The restructuring
plan involves the signing of an export pre-payment operation,
which includes US$200 million and will be led by JP Morgan.

Suzano recently posted a 10-percent increase in its net profit in
the first quarter of 2001. Growth in the average price of the
paper ton, by 13.9 percent abroad and by 10.9 percent in Brazil,
leads the company to expect its equity to reach R$92.1 million.
Net equity increased by 111 percent reaching R$112 million in the
first quarter and its liabilities amounted to R$143 million
against a financial reserve of US$356 million. Suzano currently
has debts totaling US$300 million.


VARIG: FRBPar Decides Future Control
------------------------------------
The decision of who will take control of Brazil's national
carrier Varig over the next three years lies in the hands of the
holding company FRBPar (Fundacao Rubem Berta Participacoes),
South American Business Information said Monday. In the middle of
this month, the FRBPar is expected to appoint 7 members for its
trustee council, presently headed by Mr. Yataka Imagawa.
Furthermore, the trustee council will decide whether Mr. Ozires
Silva will retain his post as Varig's chairman.

Varig is struggling to cut its debts, which currently stand at
US$1.3 billion. Earlier, the company announced a planned sale of
a 30-percent stake in its VarigLog logistics unit in order to
reduce debts by some US$500 million this year.


XEROX: SEC Probes Citibank Transaction
--------------------------------------
The U.S. Securities and Exchange Commission subpoenaed Citigroup
Inc.'s Citibank as part of an ongoing investigation being
conducted at Xerox Corp. due to accounting irregularities,
Bloomberg revealed Monday. The transaction in question is the
arrangement made by Citibank concerning copier rentals in Brazil.
According to a report in Bloomberg, Citibank made an arrangement,
which involved $220 million in revenue during two quarters in
1999, allowing Xerox to record future revenue as current income.



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E C U A D O R
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FILANBANCO: Government To Issue $300M Worth Of Bonds
----------------------------------------------------
The Ecuadorian government was able to get authorization from the
Attorney General to issue $300 million worth of government bonds
in a last ditch effort to boost Filanbanco's solvency level. The
bank's current reserves are significantly below the legal
minimum, Bloomberg said Monday. According to Finance Minister
Jorge Gallardo, the bonds will be transferred directly to the
capital account of Filanbanco.

"They don't have interest and are not negotiable and the
amortization won't fall due for 15 years after which time the
bank will have already been sold," Gallardo said.

The Ecuadorian law requires banks to have a capital adequacy
ratio requirement of nine percent. Filanbanco's current level of
1.3 percent means it would be forced to close without state help.
Filanbanco posted a first quarter loss of $38.5 million. As of
March 31, the bank's overdue loans totaled 61.2 percent of the
bank's total loans, according to the monthly report by the
superintendent of banks.

The government is estimated to have spent $1 billion on
Filanbanco since acquiring it in 1998. And now, it is looking to
sell it off. According to the Attorney General, during the sale
process the government must negotiate with the buyer so that the
$300 million bonds are recovered.

The sole ownership of Filanbanco was passed to the Finance
Ministry last week from the Deposit Guarantee Agency in order for
the bonds to be issued.



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

GRUPO BITAL: Immediate Future Still Unclear
-------------------------------------------
The immediate future of Mexico's Grupo Financiero Bital looks
bleak. Ongoing controversy with bank bailout agency IPAB over the
planned recapitalization of government-intervened bank Atlantico
is likely to drag on until the third quarter of the year,
Infolatina reported Monday. According to Bital Chairman Luis
Berrondo, Bital cannot initiate talks with potential foreign-
based buyers until its own drawn-out acquisition of Atlantico is
completed. Atlantico is in need of an estimated $700 million
capital injection - with Bital, IPAB, and Mexico's National
Banking and Securities Commission (CNBV) all taking different
views of how the burden should be divided up. Berrondo said he
was unhappy with the way in which negotiations were going.

"They're going, but not the way I would like," he said.


GRUPO VITRO: Looks To Refinance Short-Term Debts
------------------------------------------------
In a bid to keep at least 70-percent of its liabilities in long-
term debt, Mexican glass maker Grupo Vitro is looking to
refinance some of its short-term debt a year before the debt
comes due, according to a report Monday in Infolatina. The
glassmaker has liabilities totaling $1.7 billion at the end the
first quarter of this year, of which 89 percent is denominated in
dollars, 10 percent in pesos, and 1 percent in inflation-indexed
investment units (UDIs). Seventy-two percent of Vitro's current
debt is long-term debt, with an average term of 3.1 years. Its
liabilities during the first quarter rose by $28 million to
weaker cash flow, reorganization outlays, investment in
environmental protection and the continuing strength of the
Mexican peso.

Vitro revealed in a document distributed to Mexican analysts that
it needs to invest in its core businesses in order to bolster
operating margins and market share.


GRUPO TELEVISA: Still Contemplating Editorial Sell-Off
------------------------------------------------------
Mexican TV group Televisa is still considering a sell off of its
publishing division Editorial Televisa. However, the company has
stated that an immediate sale is not possible since no due
diligence has been initiated yet, South American Business
Information reported Monday. Televisa has been badly hit by
reduced advertising revenues as a result of a slower economy in
the United States. The company decided to divest its publishing
division after posting weak first-quarter numbers, with a 46.3
percent decrease in operating profits, to 23.9 million pesos.
Additionally, net sales for the quarter were down and operating
costs were up, particularly in areas such as redesign of magazine
covers.



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P E R U
=======

CONSORCIO TEXTIL: Creditors To Introduce Restructuring Plan
-----------------------------------------------------------
Creditors of the Peruvian company, which was declared insolvent
last October, Consorcio Textil del Pacifico, were scheduled to
present the company's restructuring plan May 14, according to a
South American Business Information report. The company was able
to reduce operating expenses by 35 percent (974,000 soles) over
the 1st quarter of this year in comparison with the same period
of last year. It posted losses of 3.5 million soles in the 1st
quarter of this year, while sales fell 22 percent. Among the
company's creditors are Banco Wiese Sudameris, Interbank and BIF.



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

SIDOR: To Sign Agreement With Union Leaders This Week
-----------------------------------------------------
Venezuelan steelmaker Siderurgica del Orinoco (Sidor) and union
leaders are expected to reach an accord this week. An agreement
would put an end to the 21-day strike, which could have led to
the company's bankruptcy had it dragged on any longer, Bloomberg
reported Monday. Alsacia Vahlis, Sidor's labor relations manager,
revealed that over 4,000 striking employees have agreed to return
to work in exchange for a special bonus payment. Collective
contract talks, which led to the strike, will be postponed until
January of 2002.

Steel plant Sidor, located in southern Bolivar state, is 70
percent-owned by the Amazonia Consortium, which is composed of
Argentina's Siderar SA, Hylsamex SA, Tubos de Acero de Mexico SA,
Brazil's Usinas Siderurgica de Minas Gerais and Venezuela's
Siderurgica Venezolana Sivensa SA. Venezuela owns the remaining
30 percent, but plans to sell a 20 percent stake to workers this
year.


SIVENSA: Puts Troubled Division Up For Sale
-------------------------------------------
Financial strife at the Venezuelan company Sivensa is pushing it
to sell-off its 51-percent owned Danaven division, South American
Business Information reported Monday. Danaven, one of the group's
troubled divisions, is devoted to the production of car-parts.
Sivensa's share of Danaven's losses amounted to US$3.7 million in
1999 and US$23.3 million in 2000. Danaven has managed to raise
sales by 19 percent between October 1999 and September 2000, but
the reversal of sales momentum has been insufficient thus far.

In December, Dana Corporation, owner of the remaining 49-percent
in Danaven, discovered significant irregularities in Danaven's
accounts, which prompted it to report a significant loss for  
fiscal year 2000. Investigations into the accounting
inconsistencies still continue.




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
written permission of the publishers.

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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