TCRLA_Public/010614.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

            Thursday, June 14, 2001, Vol. 2, Issue 116

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Spain's Treasury Minister On The Spot
HIPARSA: To Launch Auction Within A Month


B O L I V I A

COTEL: AES Remains Committed To Joint Venture


B R A Z I L

CHS ELECTRONICS: Halts Brazilian Operations
TABACOW: Seeks Bankruptcy Protection to Restructure
VESPER: Hopes Of An Acquisition Appear Bleak


C O L O M B I A

AVIANCA: Struggles To Win Approval Of Planned Merger With Aces


M E X I C O

BANCRECER: Afore Sale Projected To Fetch Approximately $169M
BANCRECER: Dresdner's Option Exercise Awaits Results Of Auction
GOODYEAR: To Transfer Green, Ohio Operations To Mexico In October
GOODYEAR: To Spend $25M To Build New Plant In Mexico
GRUPO TELEVISA: Merrill Lunch Cuts From `Buy' To `Accumulate'
GRUPO TELEVISA: Clear Channel To Contest CFC Ruling
GRUPO TELEVISA: Hires Protega To Handle Skytel Sale
GRUPO TRIBASA: Still Trying To Extend Operating License
GRUPO VITRO: Analyzes Possibility Of Investing In China
WARNACO GROUP: Files Chapter 11 Bankruptcy Petition


     - - - - - - - - - -


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

AEROLINEAS ARGENTINAS: Spain's Treasury Minister On The Spot
------------------------------------------------------------
Jose Segura, infrastructures spokesman for PSOE, Spain's
opposition socialist party, on Monday called for Treasury
Minister Cristobal Montoro to appear in parliament and give a
detailed explanation of the situation that Aerolineas Argentinas
is in, according to an El Pais report. Mr. Segura is not calling
for a new injection of capital into the airline, which is now
considered technically bankrupt. He wants more information to be
given to the parliament regarding SEPI's restructuring plan,
which is aimed at making the airline viable, the particulars of
which have not been disclosed to PSOE, despite a request for
them.

Meanwhile, Spanish economy minister Rodrigo Rato re-affirmed
Monday the Spanish government's promise to Aerolineas. The
government is focusing on making the airline profitable using the
plan proposed by SEPI.

Rato indicated that SEPI's intention is to implement a
feasibility plan for the airline, already accepted by the
Argentine government and by six of the company's seven trade
unions. SEPI also explained that it was not responsible for the
suspension of seven of the company's routes on Wednesday.


HIPARSA: To Launch Auction Within A Month
-----------------------------------------
The national and international auction for Hiparsa -- the iron
ore mine located in southern Argentina's Rio Negro province,
which ceased operations in 1991 -- will be launched within a
month, Hiparsa president Ernesto Urcera said in a Business News
Americas report released Tuesday.

"When the definitive rules are published, which should take
another week, they'll be put on sale, and this would happen
within no more than 30 days," Urcera informed. Bidding rules will
cost US$40,000.

The process involves awarding a concession to restart operations
at the Hiparsa mining complex and Punta Colorada port. The winner
will have the opportunity to buy Hiparsa, which has estimated
reserves of 250-300Mt of iron ore, outright at a later date. The
plan involves renting out Punta Colorada port to avoid the whole
operation being monopolized by one company.

According to Urcera, so far, Chinese embassy representatives,
members of Japan's private sector and executives from some
Argentine and Chilean companies have expressed interest in the
project.



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

COTEL: AES Remains Committed To Joint Venture
---------------------------------------------
Contrary to local media speculations, AES Communications Bolivia,
a subsidiary of US-based energy group AES, intends to stay
committed to a joint venture with La Paz-based fixed line
cooperative Cotel, the largest local telephone carrier in
Bolivia, Business News Americas reported Tuesday. AES signed a
10-year strategic alliance with Cotel in May to provide long
distance and value added services after the market opened to
competition in November. The contract remains effective despite
opposition from several Bolivian politicians, said Vanesa Rolf,
marketing manager at AES Communications Bolivia.

In August last year, Bolivia's telecoms regulator Sittel
intervened Cotel after a strike threatened service. The election
of a new board of directors in May was declared void due to
irregularities and Sittel extended the intervention period for 90
days, prompting some local congressmen to cry foul.



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

CHS ELECTRONICS: Halts Brazilian Operations
-------------------------------------------
CHS Electronics, a distributor of informatic products, ceased
operations at its Brazilian subsidiary, asking for a preventive
bankruptcy, South American Business Information reported Tuesday.
CHS has been in a serious financial down-spiral since 1999. The
trouble has resulted in a drop on its share price from US$20 to a
mere US$1. In December of that same year, CHS sold control of its
5 subsidiaries --Brazil, Mexico, Colombia, Uruguay, and US -- to
a group of ex-businessmen, led by Mr. Gonzalo Velasco, in a
transaction valued at R$23.5 million. In Brazil, the company kept
the mark CHS, and distributed products from Microsoft, Compaq,
IBM, and EMC.


TABACOW: Seeks Bankruptcy Protection to Restructure
---------------------------------------------------
Brazilian carpets and rugs producer Textil Tabacow, which has
reduced its monthly turnover by almost 25 percent over the last 5
months, sought bankruptcy protection, according to a report
Tuesday in South American Business Information. Last year, the
company posted gross earnings of R$80 million and losses of
R$558,000. During the period, its short-term liabilities amounted
to R$43.5 million, R$12.7 million of which is owed to suppliers.
Ten percent of its production is destinated to exports, with
Argentina accounting for 50 percent.


VESPER: Hopes Of An Acquisition Appear Bleak
--------------------------------------------
While waiting for a prospective bidder to emerge after
shareholders lost hope that the company would be acquired by
either Brasil Telecom or AES, telecoms Vesper is preparing to
sell part of its assets to slash costs and keep itself afloat,
South American Business Information reported Tuesday. Initially,
it will divest 800 Web sites, expected to fetch between US$120
million - US$154 million. Vesper also plans to sell its call
centers in Campinas (Sao Paulo), where it invested US$14.1
million, and another in Macae (Rio de Janeiro).

To continue operating, Vesper has to spend R$50 million monthly,
a figure that must be cut to R$20 million - R$30 million to match
its current income. To break even, Vesper would need to have
800,000 customers, while in February it had only 500,000, and to
expand, it needs fresh capital or additional resources. However,
owners Bell Canada, Velocom, and Qualcomm, which have already
invested US$500 million in the company, refused to provide the
much-needed expansion funds.

Vesper owes US$500 million to Nortel, US$150 million to Ericsson,
and US$500 million to Lucent. Suppliers are apprehensive about
Vesper but they believe that the company can be revived with the
change of regulations from the telecoms agency Anatel, making
Vesper more attractive.



===============
C O L O M B I A
===============

AVIANCA: Struggles To Win Approval Of Planned Merger With Aces
--------------------------------------------------------------
In a bid to win approval for its blocked merger plans with Aces,
Colombia's biggest airline Avianca began applying political
pressure on Tuesday. Avianca is taking the case directly to the
country's president Andres Pastrana, according to an ft.com
report. On Tuesday, the president met with German Montoya, a
seasoned political operator and a senior board member of Valores
Bavaria, Avianca's holding company, and Emilio Archila, the head
of the Industry and Commerce Superintendency, the country's main
competition regulator. The meeting came a day after Mr. Archila
ruled out Avianca's plans to link up with Aces.

Neither of the airlines is expected to ask the superintendency
within the next few days to reconsider its verdict, which cast
doubt on the future of both companies. They have argued they need
to join forces to be able to compete internationally at a time
when Colombia is opening its international air routes to foreign
carriers. According to the superintendency, an international
link-up would have merits but said merger plans which also
contemplated domestic operations would have damaged consumer
interests by severely restricting competition.

Analysts believe that if the merger with Aces remains blocked,
then Avianca will need a $200m capital injection from its primary
shareholders to keep it afloat.



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

BANCRECER: Afore Sale Projected To Fetch Approximately $169M
------------------------------------------------------------
Mexican bank bailout agency IPAB's sale of a 47.5-percent stake
in pension fund manager Afore Bancrecer Dresdner is expected to
generate around $169 million, according to Abel Hibert, an
analyst at Mexico City brokerage Victor. In a Reforma/Infolatina
report Tuesday edition, Hibert revealed that the fund manager was
worth around $266 per member or individual account.

On the other hand, Alejandro Gonzalez, a consultant at
Bursametrica, estimated that the stake would sell for anywhere
between $150 million and $180 million. He based his estimate on
the fund manager's book value - $60 million - and past experience
showing that Mexican pension fund managers typically sell for
between seven-times and nine-times its book value.


BANCRECER: Dresdner's Option Exercise Awaits Results Of Auction
---------------------------------------------------------------
The decision by Dresdner Pension Fund Holdings on whether to
exercise its option to acquire 3.5-percent in Afore Bancrecer
Dresdner, a Mexican pension fund manager in which Dresdner and
Allianz currently hold a combined 49-percent stake, awaits
announcement of a successful bidder of an auction for a 47.5-
percent stake in the fund. Details of the situation were revealed
by Dresdner Bank Mexico top executive Luis Nino de Rivera in an
El Economista/Infolatina report Monday. Dresdner-Allianz has
recently been allowed to boost its share in the Bancrecer pension
fund by 3.5 percent from 49 to 52.5 percent and control the fund
following four months of a legal battle with the Mexican
government.

According to Nino, Dresdner will not exercise the option if it
wins the IPAB auction.

"If we offer the best price and win the auction, we will have
96.5 percent of the pension fund manager and it wouldn't make
sense for us to take the remaining small stake," Nino said. On
the other hand, if another company wins the auction, Dresdner
will exercise its option on the 3.5-percent stake. IPAB on Monday
invited formal expressions of interest in the 47.5-percent stake.


GOODYEAR: To Transfer Green, Ohio Operations To Mexico In October
-----------------------------------------------------------------
Goodyear plans to move the last of its air springs production in
October from Green, Ohio, to an existing plant in San Luis
Potisi, Mexico, according to a report Monday in Knight Ridder
Business News. The closure of the plant, which according to
Goodyear spokesman Skip Scherer is not competitive in terms of
wages and benefits, will result to the dismissal of 60 hourly and
salaried workers. Although, some would probably be able to find
jobs elsewhere in the company, Goodyear officials said.

According to Scherer, they have been working with the union over
the last few months to find a way to make the plant competitive
but it seems that all efforts were futile. Doug Werstler,
president of Steelworkers Local 2, said the union came up with a
list of cost-cutting suggestions but those savings were not
enough to save the operation.

When the plant closes in October, only a support staff of 30 who
work in sales, marketing, engineering and customer service will
be left.


GOODYEAR: To Spend $25M To Build New Plant In Mexico
----------------------------------------------------
Goodyear Oxo President and CEO Emilio Bellorin Font revealed a
$25-million investment plan, which will see the establishment of
a new plant that will make components for the country's
automotive industry, El Economista/Infolatina reported Tuesday.
According to Bellorin, the company's new components plant, which
would provide jobs for approximately 200 people, would be sited
in the north of Mexico.

Goodyear recently shut down a tire plant located on the outskirts
of Mexico City because it could not keep up with the fierce price
competition of imports from Asia. However, Bellorin said that
Goodyear's leadership in the Mexican tire market currently was
not under threat from any of its competitors. According to him,
the company's tire sales in Mexico last year were up 8 percent
and equipment sales were up 50 percent.


GRUPO TELEVISA: Merrill Lunch Cuts From `Buy' To `Accumulate'
-------------------------------------------------------------
Concerns over stalled negotiations between Mexican media giant
Grupo Televisa and U.S. Hispanic broadcaster Univision
Communications Inc. lead Merrill Lynch to cut its rating on
Televisa to `accumulate' from `buy', according to Reuters
Tuesday. Analyst Whitney Johnson revealed in her research note
that "negotiations have stalled. Management now suggests a deal
will happen in the third quarter, rather than the second quarter,
possibly with (rival Hispanic network) Telemundo (Communications
Group Inc.)."

"Though we consider Televisa, the dominant media player in
Mexico, an attractive long-term investment, the Televisa-
Univision standoff has checked our enthusiasm." For Johnson, a
broader Televisa-Univision deal is no longer inevitable.


GRUPO TELEVISA: Clear Channel To Contest CFC Ruling
---------------------------------------------------
U.S.-based Clear Channel Communications Inc. hired New York law
firm Fried Frank to argue Mexico's Federal Competition
Commission's (CFC's) ruling that prevented a planned merger
between Mexican broadcast-radio group Acir, in which Clear
Channel owns a 30-percent stake, and Grupo Televisa subsidiary
Radiopolis, Reforma/Infolatina reported Monday. Fried Frank will
argue that the CFC's decision embodies "discriminatory treatment"
of a U.S. company under the terms of the North American Free
Trade Agreement (NAFTA)

Earlier this year, the CFC rejected an appeal by Televisa and
Acir against the decision citing concerns about potential
concentration of ownership in certain parts of the country's
broadcast-radio market made the merger a monopoly risk.

On the other hand, Televisa has also launched legal proceedings
in Mexico in an attempt to have the ruling overturned.


GRUPO TELEVISA: Hires Protega To Handle Skytel Sale
---------------------------------------------------
Mexican media giant Grupo Televisa hired Protego, a Mexican
investment bank owned by Vector brokerage former Chairman Pedro
Aspe, to manage the forthcoming sale of its 51-percent stake in
Mexico's No. 1 paging firm SkyTel, Reforma/Infolatina disclosed
Monday. Televisa prefers to sell the stake to U.S.-based
Worldcom, which currently owns the remaining 49-percent stake in
SkyTel. According to the report, the two firms are now in
preliminary talks regarding the transaction.

In a related report, Televisa has also held talks with Sony
Corp., Warner and Universal in an attempt to find a partner for
its music CD unit, Fonovisa. Fonovisa sales in the United States
have declined recently and Televisa is aiming to form an
association with a U.S.-based music label in order to boost
sales.


GRUPO TRIBASA: Still Trying To Extend Operating License
-------------------------------------------------------
Talks between struggling Mexican engineering and construction
firm Grupo Tribasa and the federal Communications and Transport
ministry regarding the latter's request for an extension of a
license to operate a toll highway linking Mexico City with the
nearby industrial center of Toluca are still ongoing,
Reforma/Infolatina reported Tuesday. Tribasa's current license
expires in December 2002 and it wants to have it extended for a
term of 20 years. However, the ministry is believed to be
considering a term of 10 years. Extension of the license over a
10-year period likely would represent between $80 million and
$100 million in revenues for Tribasa, which the company needs to
pay down existing liabilities.


GRUPO VITRO: Analyzes Possibility Of Investing In China
-------------------------------------------------------
Mexican glassmaker Vitro is examining the possibility of
investing in China and considering the idea of forming
partnerships with Chinese firms in Mexico, Vitro CEO Federico
Sada Gonzalez said, Reforma/Infolatina reported Tuesday.

According to Sada, Vitro was looking at making a "relatively
large" investment in a facility in a province north of Shanghai,
but gave no further details.

"We are still in negotiations. It would be 60 percent for glass
exports and 40 percent for China's national market," he said of
the project.

"That would give us a competitive advantage in all Asia to
position ourselves in other countries," said Sada, who last week
accompanied President Vicente Fox on a tour of China, Japan and
South Korea.

"We're looking at a couple of investment projects in particular
in Asia and at bringing potential partners to Mexico. We expect
to make an announcement during the next three months to six
months," Sada said.


WARNACO GROUP: Files Chapter 11 Bankruptcy Petition
----------------------------------------------------------------
The Warnaco Group, Inc. (NYSE: WAC) announced today that the
Company, and certain of its subsidiaries, have voluntarily
petitioned for protection under Chapter 11 of the U.S. Bankruptcy
Code with the U.S. Bankruptcy Court for the Southern District of
New York.

The Company's international subsidiaries, including operating
entities in Canada, Mexico, Europe, Latin America and Asia, will
be largely unaffected by the filing. While operating under the
protection of Chapter 11, the Company will seek to increase
operating liquidity and continue the operational and financial
restructuring it began in 2000.

The combination of a general economic downturn, a softening
retail environment, an increasingly competitive industry and the
Company's debt obligations all contributed to the need for the
filing. The Company has conducted a thorough and careful review
of all of its available options and has concluded that a
reorganization under Chapter 11 is the only way to secure
additional operating liquidity, stabilize the Company, and
maintain sufficient flexibility to restructure its debt and
continue its operating turnaround.

Warnaco announced today that it has secured a commitment of $600
million Debtor-in-Possession (DIP) financing from a consortium of
banks led by Citibank, J.P. Morgan Chase and The Bank of Nova
Scotia, subject to bankruptcy court approval.

The Company emphasized that during the voluntary restructuring
process, day-to-day business operations will continue
uninterrupted. The Company believes that the financing package
will, among other things, provide ample funding to maintain
normalized business with its vendors post-petition and maintain
uninterrupted distribution of its products to its customers.

"We are very pleased to have received the commitment for a $600
million DIP line to finance our ongoing operations and support
our portfolio of world-class brands as we reorganize our
business," said Linda J. Wachner, Chairman and Chief Executive
Officer of Warnaco. "With this new financing and our experienced
management team, we now have the elements in place to put Warnaco
back on the track toward financial stability. The addition of
Tony Alvarez to the management team this past month as Chief
Restructuring Officer brings extensive restructuring and
reorganization expertise to successfully complete this process."

Tony Alvarez is a Founding Managing Director of Alvarez & Marsal,
Inc. Mr. Alvarez has served as a turnaround manager or consultant
for a number of companies across a variety of industries.

The Warnaco Group, Inc., headquartered in New York, is a leading
manufacturer of intimate apparel, menswear, jeanswear, swimwear,
men's and women's sportswear, better dresses, fragrances and
accessories sold under such brands as Warner's(R), Olga(R), Van
Raalte(R), Lejaby(R), Weight Watchers(R), Bodyslimmers(R),
Izka(R), Chaps by Ralph Lauren(R), Calvin Klein(R) men's,
women's, and children's underwear, men's accessories, and men's,
women's, junior women's and children's jeans, Speedo(R)/Authentic
Fitness(R) men's, women's and children's swimwear, sportswear and
swimwear accessories, Polo by Ralph Lauren(R) women's and girls'
swimwear, Oscar de la Renta(R), Anne Cole Collection(R), Cole of
California(R) and Catalina(R) swimwear, A.B.S. (R) Women's
sportswear and better dresses and Penhaligon's(R) fragrances and
accessories.

For ongoing case-specific information, get a free copy of Warnaco
Bankruptcy News from http://bankrupt.com.



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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