TCRLA_Public/010702.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, July 2, 2001, Vol. 2, Issue 128



AEROLINEAS ARGENTINAS: Search For Buyer Intensifies
SUPERCANAL:  Fed. Prosecutor's Office Formally Charges Execs


CVRD: Wins Foz Do Chapeco Hydroelectric Power Plant Concession
CVRD: Considers Abandoning Celmar Auction


AVIANCA: Continues With Financial Reorganization Process


AEROMEXICO: Reduces Fleet On Decline In Air-Passenger Market
ALEGRO: Not Bankrupt, Just Needs Fresh Capital
BANCO INVEX: Fitch Withdraws `C' Rating
BUFETE INDUSTRIAL: New Owner To Hasten Debt Restructuring
DAIMLERCHRYSLER: Cutting Mexican Plant Jobs Due To U.S. Slump
GRUPO PULSAR: Divestment Seen Boosting Financial Position
GRUPO TRIBASA: Advent Offers Creditors $150M Debt Refinancing
SAVIA: Meets Obligations, Has Final Agreement With Lending Banks


AUSTRAL GROUP: Shrinks Net Losses In 1Q01 to US$1.3 Million


SIDOR: Agrees To Accelerate Overdue Payments To Suppliers

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AEROLINEAS ARGENTINAS: Search For Buyer Intensifies
Argentinean president, Fernando de la Rua, and the management of
Aerolineas Argentinas, the country's flagship carrier, are
working frantically to find for a solvent buyer, who can rescue
the airline from bankruptcy, El Mundo said in a report Thursday.
Representatives of SEPI, the Spanish holding company that
controls the airline, have confirmed their intention to transfer
the company to an investor as soon as possible. Labor minister,
Patricia Bullrich, said that Aerolineas Argentinas needs a buyer
and the sooner it finds one, the better for the preservation of
the business. Ms. Bullrich has ruled out any possibility of the
Spanish government injecting more capital into the airline.

SUPERCANAL:  Fed. Prosecutor's Office Formally Charges Execs
Argentina's federal prosecutor's office has formally charged
Grupo Uno president Daniel Vila and business partner Jos, Luis
Manzano, along with others, of tax evasion and fraud in
connection with the Mendoza-based media company's rapid expansion
in the 1990s, according to a June 22 report in Multichannel News
International. The two officials of Grupo Uno allegedly channeled
up to $600 million in political kickbacks and dubious offshore
financial transactions to amass their holding of print, radio,
and pay TV assets in Argentina's interior. Vila, however denied
the charges, explaining that the expansion of his media
businesses was the result of strong backing from leading
international banks.

The lawsuit is another obstacle for Supercanal, the country's
third largest MSO, in which Grupo Uno is a majority shareholder
with 51.2 percent stake. On March 2000, the company filed for
bankruptcy protection after it missed a $17-milion interest
payment on one of its bonds. Vila attributed the collapse to the
internal discord with its minority investor, Multicanal.
Multicanal, Argentina's No. 2 cable operator, owns 20 percent of

Under the supervision of a federal court, Vila said Supercanal
continues to negotiate with its creditors seeking a successful
outcome to its financial problems. He added that a final
resolution is likely to involve a new round of capitalization for
Supercanal by banks and the sale of a 20 percent stake held by
Grupo Clarin, Argentina's largest media company. Given the low
valuation for cable assets in Argentina, analysts say bondholders
are unlikely to be repaid in full even if a change in
Supercanal's ownership structure takes place.


CVRD: Wins Foz Do Chapeco Hydroelectric Power Plant Concession
A consortium formed by Companhia Vale do Rio Doce (NYSE:  RIOpr)
- CVRD (40%), Serra da Mesa Energia S.A. (40%) and Companhia
Estadual de Energia Eletrica - CEEE (20%) won a public concession
to build and explore the Foz do Chapeco hydroelectric power
plant. The concession was auctioned by Agencia Nacional de
Energia Eletrica (ANEEL) on June 28, 2001.

The consortium was awarded a 35-year concession, and the first
unit of the power plant must be operating within a maximum time
limit of 84 months from the date of the contract being signed.
The price paid by the consortium involves annual installments of
R$ 18 million from the eighth to the thirty-fifth year of the

The Foz do Chapeco power plant is located on the Uruguai river,
on the border between the Brazilian states of Santa Catarina and
Rio Grande do Sul, and will have a capacity of 855 MW.

The investment in this power plant is in line with CVRD's plan to
meet its own energy needs at lower costs.

CVRD: Considers Abandoning Celmar Auction
Companhia Vale do Rio Doce (CVRD) may abandon its plan to auction
off Celulose do Maranhao (Celmar). Companies which have had
access to the data room have come to the conclusion that the
price tag on Celmar is excessively high given its debt level, AFX
Europe reported Wednesday. Celmar, the only part of CVRD's pulp
and paper assets that the company so far has failed to sell off
has estimated debts of US$60 million dollars. CVRD is attempting
to divest of holdings in non-core businesses as part of its
strategy to focus on its core activities: mining and logistics.


AVIANCA: Continues With Financial Reorganization Process
The financial reorganization process at Colombia's largest
airline, Avianca, continues as it attempts to see improvement in
results. The company hopes such a positive move will eventually
allow the merger or alliance with Aces, South American Business
Information reported Thursday.

In its June 11 ruling, Colombia's anti-trust agency said the
proposed merger, while perhaps needed to help the airlines
compete with U.S. carriers encroaching on international routes,
would lead to a near monopoly power at home. Analysts said the
agency's decision was a heavy blow to the two airlines,
especially cash-strapped Avianca, whose losses more than doubled
in the first quarter while its debt tripled to 315 billion pesos
($136 million).

Meanwhile, Avianca also called an extraordinary shareholders'
meeting in Barranquilla to discuss the air carrier's dire
financial situation and to have certain financial restructuring
measures approved. The meeting was originally set for Tuesday but
Avianca postponed it until Friday.


AEROMEXICO: Reduces Fleet On Decline In Air-Passenger Market
Holding company Cintra's airline Aeromexico has been forced to
reduce its fleet by three aircraft because of a slump in the
Mexican air-passenger market, according to a report on Thursday
in Reforma/Infolatina. The country's leading airline has already
sold two of the three planes (a DC-9 and an MD80), garnering
around $20 million from its sale. Aeromexico is expected to have
cut its total fleet from 70 aircraft to 63.

Just recently, Aeromexico announced a restructuring of its U.S.
Division. According to Rolf Hoehn, Vice President of U.S.
Division, the restructuring will enable the company to focus on
sales and marketing strategies more efficiently and effectively
in the increasingly competitive marketplace.

ALEGRO: Not Bankrupt, Just Needs Fresh Capital
CEO Jorge Nava Gil says his Mexican regional airline Alegro is
not bankrupt but needs fresh capital to consolidate its presence
in the domestic air-passenger market. The company is currently on
the lookout for a new financial partner according to an El
Economista/Infolatina report Wednesday. Alegro was in talks with
a potential Mexican investor and one U.S. candidate, Nava
revealed. The interested but unnamed U.S. company, currently has
no airline industry holdings in either the United States or
Mexico. Nava said Alegro hoped to sign a deal with one of the
companies by the end of July.

BANCO INVEX: Fitch Withdraws `C' Rating
Fitch, the international rating agency, has withdrawn Banco
Invex's Intra-Country Issuer rating of `C' (IC-C) assigned by
former Thomson BankWatch. This action follows the decision by the
bank to discontinue using Fitch ratings.

Banco Invex is a relatively small, corporate-oriented bank
operating in Mexico since 1994.

BUFETE INDUSTRIAL: New Owner To Hasten Debt Restructuring
Struggling Mexican construction company Bufete Industrial's new
owner and chairman, Grupo Serbo's Sergio Bolanos, said he would
start restructuring Bufete's estimated $450 million debt right
away, Reforma/Infolatina reported Thursday. Bolanos aims to have
the suspension of payments lifted within two months and wants to
see Bufete back to the status it enjoyed a decade ago as Latin
America's largest construction company. His main project is the
construction of a petrochemical complex in the port of Altamira
on the coast of the Gulf of Mexico. The estimated cost of the
project is $4.5 billion, for which financing is still needed.
Bolanos recently paid a token 1,000 pesos to acquire Bufete.

DAIMLERCHRYSLER: Cutting Mexican Plant Jobs Due To U.S. Slump
Truck producer Freightliner, a unit of DaimlerChrysler, announced
it would slash 283 jobs in Mexico, from a total of 867, as part
of a downsizing drive. The company plans to chop 1,120 jobs in
four Freightliner plants in North America between July and
October, Reuters reported Thursday. Consequently, the vehicle
production at the plant will fall by a third, according to
Jacqueline Schoch, the unit's spokeswoman.

"With this cutback we will be producing 17 units a day. We were
producing 25 before the cut," she said, adding that the cutbacks
in the Mexican plant, the only one that makes Mercedes Benz and
Freightliner brand trucks in the country, were a result of the
U.S. economic slowdown.

However, Schoch stated that the cuts would not affect the plant's
production of heavy vehicles for the domestic market and Central
America or output at a plant in Garcia, Nuevo Leon where
Mercedes-Benz and the Polomex company make buses.

GRUPO PULSAR: Divestment Seen Boosting Financial Position
Mexico City brokerage Vector, in a letter sent to clients,
expressed optimism that Savia's forthcoming sale of a 45-percent
stake in Seguros Comercial America (SCA) to Netherlands-based
financial services group ING will boost its parent company
Monterrey-based Grupo Pulsar's financial status,
Reforma/Infolatina reported Thursday. Vector and Savia are both
subsidiaries of Grupo Pulsar. Vector's letter to its Puebla
clients said Savia's sale of the SCA stake and Savia's recent
divestment of packaging subsidiary Empaques, for $250 million,
would reduce Pulsar's overall liabilities "by around 1 billion
dollars and leave remaining debt of less than $75 million."

GRUPO TRIBASA: Advent Offers Creditors $150M Debt Refinancing
U.S.-based capital fund Advent, expressing willingness to back
Mexican construction firm Grupo Tribasa in its debt-restructuring
plan, offered Tribasa's creditors $150 million, according to a
Reforma/Infolatina report released Thursday. The capital fund has
reportedly approached the Mexican Finance ministry and the
Communications and Transport ministry in an attempt to win their
backing for a debt-restructuring plan at Tribasa. Reports also
indicate last year Advent was in discussions with the
construction firm on the possibility of taking an equityp
position in the company in exchange for assuming responsibility
for part of its liabilities. However, the talks reportedly

SAVIA: Meets Obligations, Has Final Agreement With Lending Banks
Savia S.A. de C.V. (NYSE: VAI, BMV: SAVIA) announced today that
it has paid off US$913 million in bank debt, and has renegotiated
with its lending banks to pay the remaining US$80 million in
October 2002.

Alfonso Romo Garza, president of the Board of Directors of Savia,
commented, "After a series of renegotiations, we have reached a
definitive agreement with our lending banks, and now have a
healthy balance sheet. The restructuring of Savia and Seminis,
along with the recent divestiture of Seguros Comercial America
and the Empaques Ponderosa subsidiaries, have enabled us to
significantly reduce our bank debt. This allows Savia to
strengthen and solidify its financial structure and continue to
meet its financial commitments, as it has done up until now."


AUSTRAL GROUP: Shrinks Net Losses In 1Q01 to US$1.3 Million
Due to lower financial expenses and higher earnings generated by
its Metalpack subsidiary, Peru's Austral Group managed to lessen
losses during the first quarter of this year, South American
Business Information said Wednesday. The company posted net
losses of US$1.3 million during the period, down from losses of
US$3 million in the same period of 2000. Sales during the period
were US$27.4 million, an 11.5 percent decrease in comparison with
the same period of last year. Gross profits at the fishing group
fell 31.4 percent, to US$8.2 million. Financial expenses fell
35.9 percent, to US$5.5 million. The group reduced its debts from
US$264 million in the 1st quarter of 2000 to US$209.5 million in
this year.

Austral has just completed a financial restructuring, under which
creditors agreed to swap some $38.9 million in debt for equity in
the company. The program was implemented in order to help the
company fulfill its debt payments over an eight-year period. It
financial troubles started after a dismal 1998 fishing season
when the country was affected by the El Nino phenomenon.


SIDOR: Agrees To Accelerate Overdue Payments To Suppliers
After signing a deal with the regional steel industry suppliers'
association ACES and Banco Guayana, Venezuelan integrated
steelmaker Siderurgica del Orinoco (Sidor) will speed up overdue
payments to suppliers, Business News Americas reported Thursday.
The Ciudad Guayana-based company, in a statement, said that
invoices will be paid within 72 hours of being issued, thus
generating greater liquidity among its suppliers.

"Following a labor dispute [in May] that halted the company's
operations for 22 days, we have been able to speedily and
efficiently pay off 45 percent of the overdue debt generated by
the stoppage, 85 percent of which was less than 30 days behind,"
Sidor supplies director Gustavo Blanco said.

"By the end of July we will be able to get back to the same
normal debt levels that existed before the strike," he added.

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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