TCRLA_Public/010601.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, June 1, 2001, Vol. 2, Issue 107

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Staff Protest Failed Talks On Runway
MASSERA: In The Hunt For Potential Buyers


C H I L E

BOLIDEN LIMITED: Noranda, Falconbridge Sue For Balking At Sale
STARMEDIA: Secures $36 Million in Financing


M E X I C O

AHMSA: Reaches Debt-Restructuring Agreement With Bankers
BUFETE: Deal With Bolanos Seen Likely To Collapse
GRUPO PULSAR: Early Stages Of Talks With Apolo Prudential
GRUPO VITRO: S&P Lowers Outlook On Peso-Dollar-Denominated Debts
SAVIA: Hopes To Sign Stand-Still Deal With Creditors This Week


P E R U

ATACOCHA: Opposes Milpo's Takeover Bid


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Staff Protest Failed Talks On Runway
-----------------------------------------------------------
Aerolineas Argentinas employees on Wednesday occupied the runway
at Buenos Aires' domestic Jorge Newbery airport and the company's
offices in the city in protest of the management's failure to
resolve the airline's financial crisis, according to an AFX
Europe report.

Flagship Aerolineas Argentinas, controlled by Sociedad Estatal de
Participaciones Industriales (Sepi), failed to reach an accord
Tuesday with the airline's union technicians over a plan to turn
the company around. According to Labor Minister Patricia
Bullrich, the Spanish government will only inject $350 million of
desperately needed financing into the airline if the two
dissenting unions sign the rescue plan designed by Sepi. The lack
of a deal would increase the risk of bankruptcy, she added.

Airport police said they aimed to avoid incidents similar to
Tuesday night's, when hundreds of flag-waving workers -- fearing
job and wage cuts -- marched on the runway at the country's
busiest domestic airport, Aeroparque, and stopped flights for two
hours.

Unions said they could continue their protests, raising the
possibility that the international Ezeiza airport could be hit.
Dozens of workers were protesting at Ezeiza and Aeroparque's
terminals on Wednesday morning.

"Security has been reinforced at Aeroparque and Ezeiza in order
to react to any incident. During the morning the airports were
operating normally," said Jorge Reta, spokesman for the Air
Force, which manages airport security.


MASSERA: In The Hunt For Potential Buyers
-----------------------------------------
Argentine ice cream maker Massera, which went bankrupt last
September after 70 years of operation, will have its future
decided in less than a month, South American Business Information
said Wednesday. Enrique Kiperman, the company's official receiver
traveled abroad to seek for potential buyers of the firm, which
will be auctioned at a minimum price of US$15.7 million.

Massera started out as a family business. The company eventually
started to expand acquiring other companies in the sector such as
Dolce Neve, Dolce Pasti, Soppelia, Sweeten (in Cordoba city),
Crema Crema, Heladerias Fidelio, Alimentos Ecologicos, Vito,
Industrias Alimenticias Bosch, Dolce Agro and Penas Negras. In
1995, the family sold some of its shares to outside investors. In
1999, the investment company JP Morgan Global Capital Limited
became a shareholder, and at the time of calling in the
receivers, it owned almost 23 percent of the equity, while
Ricardo Miyazono owned the other 77 percent.

Kiperman previously said that Massera has a prestigious brand
name and considerable growth potential. A series of external
problems drove Massera's shareholders to file for bankruptcy in
September 2000.



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C H I L E
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BOLIDEN LIMITED: Noranda, Falconbridge Sue For Balking At Sale
--------------------------------------------------------------
Metals producer Noranda Inc. and its subsidiary Falconbridge Ltd.
filed a lawsuit Wednesday against Swedish-based firm Boliden Ltd.
The firms filed the action for backing out of a deal to sell two
Chilean copper mines, South American Business News said in a
report Thursday. The lawsuit asks the court either to declare
that a binding agreement exists for the sale of the mines, or to
award Noranda and Falconbridge 250 million Canadian dollars in
damages.

In a statement of claim filed in Ontario Superior Court, they
also assert that Boliden "breached its duty to act in good faith
and execute definitive agreements consistent with the letter
agreement that it reached with Noranda on February 28, 2001."

In February, Boliden agreed to sell its interests in the two
Chilean copper mines for US$64 million. However, just recently,
it decided to keep the mines in order to comply with a condition
drawn up with the banks in its debt-restructuring plan.

Boliden has faced financial troubles due to its Los Frailes zinc
mine in Spain, the scene of a major tailings spill in 1998, and
losses from depressed metals prices.


STARMEDIA: Secures $36 Million in Financing
-------------------------------------------

BellSouth Corporation Makes Strategic Investment
Primedia Inc. Creates Strategic Alliance
JPMorgan Partners Makes Direct Investment

StarMedia Network, Inc. (Nasdaq: STRM)
(http://www.starmedia.com),the leading Internet media company  
targeting Spanish- and Portuguese-speaking audiences worldwide,
today announced the completion of a $36 million equity placement.
StarMedia also announced a strategic alliance with BellSouth
Corporation (NYSE: BLS) (http://www.bellsouth.com),which will  
enable StarMedia to further capitalize on Latin America's rapidly
expanding wireless market through the creation of multi-access
portals throughout the region, as well as provide StarMedia with
a premium content distribution and advertising platform for
marketers to reach their consumers.

Our ability to create these partnerships affirms StarMedia's
long-term market opportunity, said Fernando Espuelas, Chairman
and CEO of StarMedia Network. The addition of these partners
leverages our leadership in Latin America.

StarMedia announced today that it has reached an agreement with
BellSouth Corp., whereby BellSouth has purchased shares of a new
series of StarMedia convertible preferred stock at a common share
equivalent price of $2.55 per share for an aggregate purchase
price of $25 million. On an as converted basis, these shares
represent an equity interest of approximately 11% in StarMedia.
BellSouth has also received warrants to purchase 4.5 million
additional shares of StarMedia common stock. The warrants may be
exercised after 12 months, and are comprised of three tranches of
1.5 million shares each, priced at $4.55, $6.55, and $8.55 per
share, respectively.

The investment from BellSouth is being made in connection with a
strategic alliance to create co-branded multi-access portals
throughout Latin America, enabling Bell South's 12 million
customers throughout the region to access personalized
information from anywhere via their personal computers and
cellular phones. The mobile service will include WAP, SMS, text
and voice access with text to speech and voice recognition
technology. The fully integrated portals will also provide a
premium content distribution and advertising platform for
marketers to reach their consumers. The number of wireless
subscribers in Latin America is expected to grow 28% per year,
compared to an estimated 16% growth per year worldwide, from 65
million in 2000 to 221 million in 2005.* As part of the
agreement, BellSouth will become StarMedia's preferred bandwidth,
hosting and network provider.

In addition, StarMedia announced it will receive a direct
investment through the purchase of the new series of convertible
preferred stock of

$11 million from a group of investors, including Primedia Inc.
(NYSE: PRM), JPMorgan Partners, the private equity unit of
JPMorganChase (NYSE: JPM), and a number of private investors.
This investment demonstrates our ongoing commitment to StarMedia,
said Susan Segal, Partner, JPMorgan Partners, StarMedia's first
institutional investor. We have the utmost confidence in
StarMedia's ability to grow its leading position and build a
long-term profitable business in the region.

StarMedia also announced an agreement with Primedia, owner of
About.com, which is expected to result in the creation of a co-
branded product initially aimed at the US Hispanic market.
StarMedia is clearly a leader among the Spanish- and Portuguese-
speaking Internet communities, stated Tom Rogers, Chairman and
CEO of Primedia. Primedia's agreement with StarMedia will result
in the distribution of our About content and the joint
development of products to serve this increasingly important
market.

Starmedia reported a 2000 net loss of US$205 million on US$61
million revenues. In a previous TCR-LA report, it announced that
it has restructured its Chilean operations. CEO and Chairman
Fernando Espuelas described the move as a "normal course of
business." He rejected rumors that the company's Chilean branch
would meet the same fate as the Chilean subsidiary of its
Brazilian rival UOL, which was completely shut down last year.



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M E X I C O
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AHMSA: Reaches Debt-Restructuring Agreement With Bankers
--------------------------------------------------------
Two years after the company's move to seek court protection from
creditors, Mexico's largest steelmaker, Altos Hornos de Mexico SA
(Ahmsa), reached an accord with banks to restructure its $1.85
billion debt, Bloomberg reported Wednesday. The agreement will
see creditors taking a 40 percent stake in Ahmsa in exchange for
writing off $530 million of liabilities, according to company
executives and bankers.

"After long negotiations, we reached an agreement," said Anthony
McCarthy, a banker with Grupo Financiero BBVA-Bancomer SA. The
agreement is the first step for Ahmsa to begin operating normally
again by emerging from court protection and resuming payments to
creditors and suppliers after the company defaulted on debt
payments beginning in April 1999.

It may take until the end of the year for the company to lift the
court protection status, McCarthy said. To do that, banks also
must work out a debt-restructuring plan for Grupo Acerero del
Norte SA, a holding company owned by the Autrey and Ancira
families that used Ahmsa shares as collateral for loans.

The agreement, which is essentially the same as a plan that Ahmsa
and the creditors' committee representing the banks outlined in
August, must now be approved by bondholders.

Meanwhile, Grupo Acerero will maintain a controlling 50.1 percent
stake in Ahmsa and minority shareholders will get 9.9 percent.
The agreement puts Ahmsa's value at $2.1 billion.


BUFETE: Deal With Bolanos Seen Likely To Collapse
-------------------------------------------------
Some observers now believe that the plans of Grupo Serbo Chairman
Sergio Bolanos to acquire struggling Mexican engineering and
construction firm Bufete Industrial is likely to be stalled once
again, Reforma/Infolatina reported Wednesday. According to
informed sources, Bolanos didn't make a major capital injection
into Bufete on May 15 when he was supposed to. Adding more fuel
to the ongoing speculation are reports that Bolanos presented
Bufete's board with a final draft acquisition agreement, which
Bufete founder and Chairman Jose Mendoza found extremely
complicated and unfavorable.


GRUPO PULSAR: Early Stages Of Talks With Apolo Prudential
---------------------------------------------------------
Informal talks between Mexican conglomerate Grupo Pulsar Chairman
Alfonso Romo and funds manager Apolo Prudential's Manuel Somoza
are now in the early stages, according to a Reforma/Infolatina
report released Wednesday. Talks are in line with Apolo
Prudential's interest in acquiring Mexico City brokerage and
funds manager Vector, a subsidiary of Grupo Pulsar. As reported
earlier, Samoza was in talks with the then-Chairman of Vector,
Pedro Asp,e regarding the matter. However, the two never reached
an accord due to a disagreement on price for the brokerage.

Monterrey-based Pulsar is in the midst of a major divestment
program in an effort to pay down estimated liabilities of $1.7
billion, most of which incurred by or on behalf of agro-
biotechnology subsidiary Savia.


GRUPO VITRO: S&P Lowers Outlook On Peso-Dollar-Denominated Debts
----------------------------------------------------------------
The peso- and dollar-denominated debt issued by leading Mexican
glass maker Grupo Vitro had its outlook lowered from "stable" to
"negative" by Standard & Poor's, Infolatina revealed Wednesday.
However, the rating agency confirmed its "BB" rating on the
obligations, as well its "B+" rating on the group's Vicap senior
unsecured notes. On the CaVal scale, S&P confirmed its "mxA"
rating on Vitro but changed its outlook from "stable" to
"negative." According to S&P, the changes in outlook were a
result of a new financial strategy at Vitro, which had increased
the company's exposure - in its overall financial profile - to
price pressures on the principal operations of the company.


SAVIA: Hopes To Sign Stand-Still Deal With Creditors This Week
--------------------------------------------------------------
Ailing Mexican agro-biotechnology company Savia, a subsidiary of
Monterrey-based Grupo Pulsar, is hoping to conclude a stand-still
agreement with its bank creditors this week, South American
Business Information related Wednesday. One of its creditors,
Grupo Financiero Bancomer BBVA, is reportedly not yet prepared to
buy off on the agreement. Meanwhile, the company's other creditor
banks, have reached a tacit understanding with Savia that the net
proceeds of its sale of packaging subsidiary Empaques Ponderosa
(Empaq) will be placed in a trust-like account. Savia generated
$285 million from the Empaq sale. However, this will be reduced
to approximately $180 million after Savia pays off Empaq debts.
Furthermore, should Pulsar decide to sell its remaining stake in
insurance subsidiary Comercial America, the proceeds of that sale
could also be placed in the trust-like account.



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P E R U
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ATACOCHA: Opposes Milpo's Takeover Bid
--------------------------------------
Peruvian zinc miner Cia. Minera Atacocha SA said it opposes a
takeover bid by rival Cia. Minera Milpo SA, according to a
Bloomberg report Wednesday. This statement came a day after
Milpo, Peru's third largest zinc miner, revealed that its
directors have already approved a public offer to buy between
50.5 percent and 100 percent of the smaller Atacocha. Milpo said
it would pay the equivalent of $0.3127 per share of Atacocha, or
$45 million for up to 143.6 million shares. It has reportedly
secured the financing for the transaction and that it has reached
accords with Atacocha minority shareholders to buy their stock.

Atacocha, a 65-year-old company, accused Milpo's chief executive,
Ulrich Rath, of acting "incorrectly" and accused him of trying to
take advantage of the problems of Peruvian mining companies
linked to weak commodity prices. Additionally, it revealed plans
to warn Milpo's stockholders that Rath has failed to carry out
annual stockholders meetings within deadlines set by the law and
that he manipulates its stock price.




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
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Information contained herein is obtained from sources believed to
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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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