/raid1/www/Hosts/bankrupt/TCRLA_Public/010625.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

            Monday, June 25, 2001, Vol. 2, Issue 123

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Board Says Seek Protection From Creditors
AEROLINEAS ARGENTINAS: Won't Sell Airline At A Loss, Spain Says
AEROLINEAS ARGENTINAS: Board To Consider AeroContinente's Offer
LAPA: Eurnekian Seeks Acquisition Of Remaining Shares


B R A Z I L

360NETWORKS: Bankruptcy Looms Ahead


C H I L E

DAYTON MINING: Andacollo Mine Begins Formal Liquidation
TELEFONICA CTC: No Takeover Plans, Telefonica Espana Says


C O L O M B I A

LLOREDA GRASAS: Corfivalle To Capitalize Part Of Debt


M E X I C O

ATLANTICO: Bital Must Allow Audit To Continue With Merger
GRUPO PULSAR: Faces Legal Case For Failure To Pay Up On Bonds


V E N E Z U E L A

MAVESA: Shares Rise Following Polar's Proposal To Delist Company


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Board Says Seek Protection From Creditors
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Aerolineas Argentinas' plan to seek protection from creditors saw
the approval of the board of directors at a meeting held
Thursday, according to a report in Bloomberg. The move comes
amidst the backdrop of a labor dispute that has pushed the
country's ailing flagship carrier to the brink of collapse. Under
the terms of the creditor protection plan, Aerolineas will stop
making payments on its debts, which now amount to $900 million.
The company plans to meet with creditors to set up a payment
program that may include writing down of some of the debt.

The Spanish government, which controls the closely held airline
through its SEPI investment arm, earlier vowed not to inject more
cash into the airline until all seven unions agree to pay cuts
and other measures to reduce costs and streamline operations.
SEPI's stance has raised concern that the airline may default on
some of its $900 million in debt.

"The board laments profoundly having come to this situation," the
airline said in a statement. "The intransigent attitude of two of
the unions have put at certain risk the continuation of this
source of labor."

The protection sought by Aerolineas is roughly equivalent to
Chapter 11 bankruptcy protection in the U.S.  The owners and the
Argentine government, which are arbitrating the labor dispute,
are trying to convince the holdout mechanics and flight
attendants unions to sign a proposed labor accord that has been
approved by the carrier's other unions.


AEROLINEAS ARGENTINAS: Won't Sell Airline At A Loss, Spain Says
---------------------------------------------------------------
Spanish treasury minister, Cristobal Montoro, announced Wednesday
that the government will hasten Argentine airline Aerolineas
Argentinas' financial restructuring, according to a report in El
Pais. Additionally, it would also step up airline's subsequent
sale to a solvent buyer, but said it would not sell the carrier
at a loss.

According to Montoro, Spain is open to "any suggestion with
regard to the privatization of Aerolineas," however, he added,
"others are responsible for making decisions in this regard."

He said that the Spanish authorities are prepared to set down the
economic conditions to secure the future viability of the company
and added that Spain had no interest in retaining the carrier
when it has just privatized Iberia.


AEROLINEAS ARGENTINAS: Board To Consider AeroContinente's Offer
---------------------------------------------------------------
The board of Aerol¡neas Argentinas met in Buenos Aires on
Thursday to consider a surprise eleventh-hour bid of Peru's
AeroContinente, for the ailing Argentine flag-carrier, according
to Financial Times in a report.

AeroContinente on Tuesday, announced an offer to buy all
outstanding shares in Aerol¡neas, which is 92 per cent owned by
the Spanish state holding company, SEPI, but did not make a
concrete offer for the airline, saying it hoped to discuss a
figure with Sepi if it is interested.

"We hope that you will be able to consider our proposal, in the
belief that we can reach an agreement that will mean that
Aerol¡neas Argentinas will keep operating," the airline said in a
letter to SEPI.


LAPA: Eurnekian Seeks Acquisition Of Remaining Shares
-----------------------------------------------------
Eduardo Eurnekian, President of Aeropuertos Argentina 2000, who
according to sources in the sector has already acquired a minor
share in Lineas Aereas Privadas (LAPA), is now looking to acquire
the rest of the airline's shares, South American Business
Information said in a report Thursday. LAPA is the second-largest
airline holding company in Argentina carrying 30 percent of the
country's domestic market. Eurnekian offered to absorb the US$134
million debt held by creditors and give Andres Deutsch US$6
million as President of LAPA. However, Eurnekian's proposal still
needs the approval of the government for this operation. Assuming
his share in the airline Southern Winds, Eurnekian would
effectively have 60 percent of the present internal flights
market while his group also manages the airports.

Meanwhile, President of the airline Dinar, Alberto Desimone,
announced it has no intentions of acquiring LAPA.



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B R A Z I L
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360NETWORKS: Bankruptcy Looms Ahead
-----------------------------------
The broadband network service provider, 360networks, which
recently missed a $10.9 million bond-interest payment, may be
forced to file for bankruptcy, according to a report Thursday in
The Irish Times. The company is currently seeking to restructure
its operations in the face of a failure to raise new financing.
It has 30 days before it will be technically in default on its $
175 million bond issue and must raise $300 million in 10 weeks to
continue building its $7-billion network.

After failing to make a $ 10.9million interest payment on
corporate bonds, 360networks announced that it had contracted
Lazard Freres to consider options, including restructuring. In a
statement, the company said it did not make the payment to
preserve cash as it reviews its options. Since discussions with
potential creditors have not been successfully concluded, the
company is now concentrating on alternatives, including
restructuring.

360networks earlier said it had abandoned plans to buy Internet
service provider NetRail of Atlanta, which has a 40,000-kilometre
fibre-optic network across the US, while Argentina's Impsat Fiber
Networks said it cancelled contracts to use 360networks' fibre-
optic cable and maintenance services in Argentina and Brazil.

360networks offers network services to telecommunications and
data-centric organizations. 360networks is attempting to develop
one of the largest and most technologically advanced fiber optic
mesh networks in the world. By early 2002, the company's planned
network will span approximately 140,000 kilometers (86,000 miles)
and link approximately 100 major cities in North America, Europe,
South America and Asia with terrestrial routes, undersea cable
systems and network capacity.



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C H I L E
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DAYTON MINING: Andacollo Mine Begins Formal Liquidation
-------------------------------------------------------
Mr. Fred Earnest, General Manager of Compania Minera Dayton
("CMD"), a wholly owned subsidiary of Dayton Mining Corporation
(AMEX, TSE: DAY) announces that the CMD and its creditors have
reached a court approved agreement, which gives CMD protection
from bankruptcy proceedings for a period of four years.

In a special judicial hearing on May 15, 2001 the creditors of
CMD unanimously accepted the Creditors Agreement with essentially
the same terms and conditions that had been originally proposed
by CMD. The Court of Andacollo approved the agreement in a
resolution dated May 31, 2001. According to the Creditors
Agreement, CMD will maintain control of the operation and
continue normal business activities with the oversight of a
mutually agreed upon three member commission.

The Creditors Agreement obligates CMD to sell the mine equipment
fleet, the three-stage crushing plant, the overland
conveying/stacking system and other assets as required in an
orderly and efficient manner. Proceeds from the sale of assets in
excess of amounts owed (in the case of the mining fleet) will
pass directly to the creditors. Proceeds in excess of operating
costs will be paid to the creditors on a quarterly basis. The
creditors of CMD have agreed to a four-year period to repay all
outstanding obligations with interest adjustments to be made on
the outstanding balance on May 15th of each year.
As reported on April 19, 2001, CMD has contracted Henry Butcher
International Ltd. ("Henry Butcher") to manage the marketing and
sale of the mining fleet, crushing plant and conveying/stacking
system located at the Andacollo Mine in northern-central Chile.
Henry Butcher has completed the first mass mailing and has a
full-time representative on site in Andacollo.

The Andacollo Mine suspended mining and crushing activities on
September 29, 2000. For the period October 1, 2000 through May
31, 2001, the Andacollo Mine has produced a total of 35,600
ounces of gold, well ahead of the projections made at the time of
the shutdown. Leaching of the heap continues and at present
results in daily production of 105 ounces of gold is being
achieved.


TELEFONICA CTC: No Takeover Plans, Telefonica Espana Says
---------------------------------------------------------
Cesar Alierta, Telefonica de Espana president, informed that the
adjustment process involving its Chilean branch Telefonica CTC
has ended. Telefonica de Espana doesn't have plans of a takeover
bid to acquire the remaining 55 percent equity of the Chilean
subsidiary, South American Business Information said in a report
Thursday.

The restructuring process, which saw the dismissal of over 1,600
Telefonica CTC workers, was implemented to restore the company's
profitability. Instead of buying out the balance of the shares,
Telefonica de Espana will remain part of Telefonica CTC Chile,
maintaining its present 43.6 percent ownership.

Alierta hopes that the subsidiary will have better results in the
future, after a loss of over $14.46 million in the first quarter
of this year, due mainly to the tariff cut in 1999.

In view of the tariff decree, due to the unstable situation of
Telefonica CTC, Telefonica Espana will not take any further
action before hearing the decision of the Antimonopoly Regulatory
Commission.



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

LLOREDA GRASAS: Corfivalle To Capitalize Part Of Debt
-----------------------------------------------------
Colombian edible oils group Lloreda Grasas, which has been
operating under economic intervention law 550 in Colombia since
March 2001, has debts totaling 271.682 billion pesos, South
American Business Information reported Thursday. Efforts to
finalize a restructuring deal in May proved to be futile.
Appartently one of its leading creditors, Corfivalle (Corporacion
Financiera del Valle), could take up a majority stake in a new
Lloreda Grasas shareholding make-up by converting a large part of
the debt it is owed to equity.

Lloreda posted 220.41 billion pesos in sales in 2000, while its
assets stood at 376.612 billion pesos in December 2000. The
company commands about 16 percent of the edible oils market in
Colombia, some 8.5 percent of the margarine market and 13 percent
in its other segment -- soap.



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M E X I C O
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ATLANTICO: Bital Must Allow Audit To Continue With Merger
---------------------------------------------------------
The merger of Mexican banks Bital and Banco del Atlantico will
not go ahead if Bital refuses to another audit. Mexican banking
institute IPAB wants to re-examine Bital's operation of
Atlantico, South American Business Information reported Thursday.
After enduring several audits, Bital is less than enthusiastic
about the prospect of another but has little choice since it's
required under the Bank Savings Protections law.

"Without an audit, the deal will not be closed," said IPAB
spokesman Roberto Barrera.

IPAB took control of Atlantico in 1998, which lacked capital and
was overwhelmed by debts. Soon after, Bital agreed to buy
Atlantico, but since then, Bital and IPAB have been haggling over
the price. During that time, Atlantico has been under Bital's
management.


GRUPO PULSAR: Faces Legal Case For Failure To Pay Up On Bonds
-------------------------------------------------------------
Union de Credito General de Puebla has taken legal steps against
Grupo Pulsar for its failure to pay up on a private series bond
issue. Part of the original deal was placed by Vectormex
belonging to Pulsar (and Savia) boss Alfonso Romo, according to a
report on Thursday in South American Business Information. Two
years ago, a total of 25 residents of Puebla, Mexico, acquired
the bonds, leading to losses of US$8.5 million jointly (the bonds
totaled US$130 million). How exactly to recoup that money is the
legal question at hand. The credit union of Puebla is suggesting
various possibilities to remedy the situation, including offering
Pulsar shares.



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V E N E Z U E L A
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MAVESA: Shares Rise Following Polar's Proposal To Delist Company
----------------------------------------------------------------
Venezuela's Mavesa saw its share price increase 10 bolivars to 60
bolivars after parent company Empresas Polar SA announced it
would purchase the food processor's outstanding stock in a move
to delist the company from the Caracas Stock Exchange, Bloomberg
said Thursday in a report. The country's securities and exchange
regulators are now reviewing Polar's proposal and are expected to
vote Wednesday on the offer. Polar, which owns 98 percent of
Mavesa, earlier this year paid 99 bolivars per share in a $500-
million tender to take control of Mavesa. The U.S.-traded shares
of Mavesa have been delisted from the New York Stock Exchange.




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
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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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