TCRLA_Public/010706.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, July 6, 2001, Vol. 2, Issue 131

                           Headlines



A R G E N T I N A

AEROLINEAS ARGENTINAS: JURCA Calls On Govt. For Assurances


B R A Z I L

CVRD: Japanese Group To Acquire Cenibra
CVRD: Targets North Region For New Energy Power Investment
PETROS: Petrobras To Take Over Debt
VESPER: Restructuring Process Leads To Closure Of Offices


C O L O M B I A

AVIANCA: Shareholders To Delay Capital Injection
CORFINORTE: Government Takes Over Administration


M E X I C O

BANCRECER: Forthcoming Sale Draws Four Bidders
GAN: Refinancing Agreement With Creditors May Come This Week
GRUPO ALFA: Discloses Plan To Sell Stake In Enertek
DESC: Eaton Acquires Truck Clutch Business in Mexico
GRUPO PULSAR: Probe Shows No Signs Of Illegal Activities
GRUPO PULSAR: Will Not Divest El Financiero And Finsat Stakes
GRUPO TELEVISA: DirectTV, Sky Merger Seen Requiring $150M
GRUPO TRIBASA: Nafin Initiates Legal Proceedings Against Company
GRUPO TRIBASA: Hits Hurdles In Debt Refinance Efforts
MEXLUB: Breakdown Blamed On Pemex Competition Difficulties


P E R U

CANAL 13: Continues With Restructuring Process



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A R G E N T I N A
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AEROLINEAS ARGENTINAS: JURCA Calls On Govt. For Assurances
----------------------------------------------------------
The Airline Representatives Board (JURCA) called for Interior
Minister Ramon Mestre to adopt preventive measures to ensure
access to airports and normal air traffic, according to a report
Wednesday in AFX-Asia. The move comes following the `most recent
news' about the crisis at Aerolineas Argentinas. Spain's state
owned holding company and liquidator Sociedad Estatatal de
Participaciones Industriales (SEPI) is apparently making
decisions which could result in new outbreaks of industrial
action at airports by the airline employees.

Aerolineas Argentinas filed for protection from creditors on June
22, and SEPI has threatened to liquidate the airline on July 23.

JURCA requested of Mestre that "security organization in the
ministry adopt the measures necessary to guarantee free transport
and access to airports as foreseen by the national constitution,
and for normal development of air traffic."



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

CVRD: Japanese Group To Acquire Cenibra
---------------------------------------
Japan Brazil Paper and Pulp Resources Development Co. will
acquire 51.48 percent of its Brazilian pulp venture Celulose
Nipo-Brasileira SA (Cenibra) from its partner Cia. Vale do Rio
Doce, the world's biggest iron ore exporter, according to the
Japanese group's spokesman, Tadashi Kameyama, in a Bloomberg
report Wednesday issue.

The Japanese consortium, already which owns 49.5 percent of
Cenibra and has pre-emptive rights on the balance of its equity.
To close the deal, the consortium needs to match a $670.5-million
offer, from a joint venture between Aracruz Celulose SA and
Votorantim Papel e Celulose SA earlier proposed for the stake.

However, CVRD said it hasn't received notice yet from the
Japanese companies that they'll buy Cenibra. The companies have
until Friday to inform CVRD of the decision formally, a company
spokeswoman in Rio de Janeiro said.

"Japan Brazil Paper probably doesn't want Brazilian papermakers
to take initiatives," said Okasan Securities Co. analyst Tomoyuki
Shioya, who rates Oji Paper `neutral minus.' "They are worried
about losing a very important source of pulp supply."

CVRD plans to sell off its remaining paper and pulp assets,
including a forestry project, to raise cash in order to
concentrate on mining operations.


CVRD: Targets North Region For New Energy Power Investment
----------------------------------------------------------
After winning the concession for the facility Foz Chapeco at
Santa Catarina state, Companhia Vale do Rio Doce (CVRD) is now
targeting the Brazilian North region for an investment in energy
power generating sector, South American Business Information said
Wednesday in a report. The company is expected to take part in
the auction for the facilities Tocantins-Xingu, Serra Quebrada,
Santa Isabel, Estreita, and Belo Monte, to be launched by Aneel
(Agencia Nacional de Energia Eletrica).


PETROS: Petrobras To Take Over Debt
-----------------------------------
The Brazilian state owned oil and gas company Petrobras informed
the US Petros shareholders that the entity has an actuarial
deficit of US$540 million. The actuarial shortfall is due to a
criteria not accepted by US accounting rules, South American
Business Information said Wednesday. Petrobras, which took over
Petros' actuarial debt of R$5.9 billion in 1999, will do the same
for its current debt. Now, both debts run a total amount of
US$3.308 billion or R$7.674 billion.

Petrobras' Board of Directors recently approved an operation,
which allows it to swap paper with the Federal Treasury to the
tune R$5.304 billion.

Last week, Petrobras announced it would swap its old non-
negotiable NTN bonds for new instruments, which it would use to
settle 5.3 billion reais ($2.3 billion) in debt with its Petros
pension fund. The state oil giant released the information in a
letter to the Sao Paulo Stock Exchange.

Petrobras received some $3.3 billion in old bonds as a payment
for the privatization of its petrochemical assets in 1990's. But
those had little market value, according to analysts who had
expected the swap deal between Petrobras and the government.

"This could be significantly positive for the company's financial
position," analyst Frank McGann, an oil sector analyst with
Merrill Lynch in New York, said in his recent report.

He said that a substitute instrument "could be used over time to
reduce debt levels."


VESPER: Restructuring Process Leads To Closure Of Offices
---------------------------------------------------------
The ongoing restructuring process at the fixed phone services
mirroring carrier Vesper will see the phase out of its offices in
the states of Rio de Janeiro and Sao Paulo, South American
Business Information reported Wednesday. Vesper, which has a
capacity for 3.2 million phone lines, though only 500,000 are
operating at present, has dismissed 500 employees over the last
month. Market sources revealed that the company, last October,
asked for a R$41-billion loan from BNDES (Banco Nacional de
Desenvolvimento Economico e Social) but the negotiations
reportedly collapsed. Vesper's operations were also affected by
the political crisis between Canada and Brazil as Bell Canada
International is one of its primary shareholders at 31.4 percent
of its capital.



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C O L O M B I A
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AVIANCA: Shareholders To Delay Capital Injection
------------------------------------------------
Shareholders of the financially-strained airline Avianca have
decided not to inject 160 billion pesos (US$68.5 million) in debt
capitalization into the airline until such time that the firm's
viability has been established, according to South American
Business Information Wednesday. The decision hinges on a second
application for merger with Aces, the first having been turned
down by the Colombian Superintendencia. Another factor is the
possibility of fuel prices coming down through government
initiatives (Colombian airlines pay 7 percent more than rivals
for fuel).

Avianca is controlled by Santo Domingo (Bavaria). The airline has
received capitalization of more than 180 billion pesos over the
last two years. At the end of the first quarter of this year, it
posted losses amounting to 400 billion pesos and debts totaling
300 billion pesos.


CORFINORTE: Government Takes Over Administration
------------------------------------------------
Corporacion Financiera del Norte's (Corfinorte's) inability to
meet payments or standards set by Banco de la Republica forced
the government to take over its administration, reported South
American Business Information Wednesday. However, despite
receiving the lowest possible rating of "EE" from Duff & Phelps
for short- and long-term debt, the National banking
Superintendencia, Superbancaria, has stated that Corfinorte will
go on servicing its 3,200 clients.

Corfinorte, which is part of the Santo Domingo (Bavaria) group,
would require capitalization of at least 50 billion pesos by July
13, 2001 to meet Superbancaria minimums. In 1999, it received
47.694 billion pesos from Bavaria, and on the later part of the
same year, carried out a restructuring of assets. However, it
could not post profits in 2000. The company's investments remain
of low liquidity, value and diversification.



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M E X I C O
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BANCRECER: Forthcoming Sale Draws Four Bidders
----------------------------------------------
With the deadline for registration set for Thursday, four firms
have so far signed up to bid for government-intervened Mexican
bank Bancrecer, revealed Mexico City daily Mexico City daily
Reforma. These firms include Grupo Financiero Banorte, Canadian-
owned Grupo Financiero Scotiabank Inverlat and Spain's Banco de
Sabadell. Grupo Financiero Santander Mexicano, the local
subsidiary of Spain's Banco Santander Central Hispano (BSCH),
previously announced it did not plan to bid for Bancrecer.

According to some unidentified Mexican banking sector analysts,
Banorte and Scotiabank Inverlat are the potential bidders most
likely to walk away with government-intervened bank Bancrecer.
However, some observers still believe Santander could emerge the
winner of the auction.

Bancrecer, with a nationwide network of 800 branches, has an
estimated book value of $400 million. The winner of the auction,
being staged by bank bailout agency IPAB, is expected to be named
by October.


GAN: Refinancing Agreement With Creditors May Come This Week
------------------------------------------------------------
Altos Hornos de Mexico (AHMSA) holding company, Grupo Acerero del
Norte (GAN), is likely to reach a refinancing agreement with its
creditors this week, Mexico City daily Reforma reported
Wednesday. According to the report, the deadline for an agreement
has been set for July 15, with the aim of initiating
corresponding procedures with the U.S. Securities and Exchange
Commission (SEC) before the summer vacation period. GAN's
agreement with its creditors would be vital to AHMSA's ongoing
efforts to lift its two-year-old suspension of payments. An
agreement with bondholders likely will be reached by September,
with a view to lifting AHMSA's suspension of payments in
December.


GRUPO ALFA: Discloses Plan To Sell Stake In Enertek
---------------------------------------------------
Mexican industrial conglomerate Grupo Alfa on Tuesday announced a
plan to sell its 50 percent stake in power generation plant
Enertek to Spain's Iberdrola, according to a report Wednesday in
Mexican financial daily El Economista. The recent announcement by
the company, which liabilities totaled 2.8 million dollars at the
end of March this year, sent positive signals to investors. The
upcoming sale of Alfa's stake in Enertek, a 120-megawatt power
plant located in the port city of Altamira, will allow the group
to reduce its liabilities by 70 million dollars. Just recently,
the Monterrey-based company sold a chain of four home-and-garden
stores, Total Home, to U.S.-based Home Depot, and divested its
25-percent stake in fibers maker Akra Teijin.


DESC: Eaton Acquires Truck Clutch Business in Mexico
----------------------------------------------------
Diversified industrial manufacturer Eaton Corporation said
Tuesday it has acquired the heavy-duty and medium-duty truck
clutch manufacturing assets of Transmisiones TSP, S.A. de C.V.,
for an undisclosed amount.

With $10 million in sales in 2000, TSP is located in Queretaro,
Mexico and has been a licensee of technology from Eaton and its
predecessors since 1973. TSP, an indirect subsidiary of DESC,
S.A. de C.V. and Dana Corporation, sells its products to original
equipment manufacturers and the independent aftermarket in
Mexico. The transmission business of DESC and Dana, including TTC
Transmission, TREMEC and TTSP, are not involved in this
transaction.

"TSP's clutch business is well positioned in its market, and will
be an excellent extension to our North American clutch
operations," said Eaton Clutch Division vice president and
general manager, DeWayne Egly. "This acquisition enables Eaton to
streamline the supply of transmissions and clutches to our
Mexican customers, and provides for technological integration of
clutches with other drivetrain products, which will also benefit
our Mexican customers."

Egly concluded that Eaton is optimistic about Mexico's
contribution to NAFTA truck production. "We expect that our
customers will continue to increase unit production from their
Mexican facilities in the next few years, and Eaton(R) Fuller(R)
clutches and transmissions will be an important part of that
market growth."

Eaton plans to relocate the acquired assets to its newest
facility in San Luis Potosi, Mexico. The company said this
transition will occur as the San Luis Potosi plant becomes
operational over the next several months, and that consolidation
of its Mexican transmission and clutch production at the San Luis
Potosi facility will provide a cost-efficient, focused approach
to manufacturing from internally shared resources in Mexico.


GRUPO PULSAR: Probe Shows No Signs Of Illegal Activities
---------------------------------------------------------
An ongoing probe into the activities of Grupo Pulsar Chairman
Alfonso Romo, so far, shows no evidence of illegal activity
either on Romo's or Pulsar's part, according to an unidentified
source close to the National Banking and Securities Commission
(CNBV), Mexico City daily Reforma reported Wednesday. The Mexican
financial regulator CNBV has launched an investigation into the
activities of Romo for his alleged use of the group's offshore
subsidiaries to sell securities issued by some of Pulsar's units,
including holding company Savia. Pulsar subsidiary Vector, a
Mexico City brokerage, was not involved in the transactions in
any way.


GRUPO PULSAR: Will Not Divest El Financiero And Finsat Stakes
-------------------------------------------------------------
Grupo Pulsar disproved recent rumors that it has signed a letter
of intent to sell its stake in Mexican financial newspaper El
Financiero and news agency Finsat to Spanish-owned group
Recoletos, according to a report Wednesday in Mexican financial
daily Mexican financial daily El Economista. The Monterrey-based
company, which said that the rumors are unfounded, announced it
has no plans to sell the said stakes.

Just recently, Pulsar recently divested several major assets,
including subsidiary Savia's stake in Seguros Comercial America,
Mexico's largest insurance company. At no time during the current
divestment program, however, has Pulsar contemplated selling its
stakes in El Financiero and Finsat. Reports have it that Pulsar
last year held brief talks with U.S.-based financial information
company Dow Jones on the possibility of selling its stakes in El
Financiero and Finsat


GRUPO TELEVISA: DirectTV, Sky Merger Seen Requiring $150M
---------------------------------------------------------
Analysts speculate that if Australian-born media tycoon Rupert
Murdoch succeeds in a bid to merge DirectTV and SKY, Televisa,
which owns a stake in DirectTV, could be required to furnish at
least 150 million dollars, Mexico City daily Reforma said
Wednesday in a report. On the other hand, if Televisa opts not to
provide the cash, it may be forced to sell its stake in
DirectTV's Latin America operations, retaining only a stake in
the television provider's Mexican unit. Another alternative is
for the company to sell its stake in DirecTV and focus on
expanding its Mexican cable-TV operations, through Cablevision,
in which it owns a 51-percent stake.


GRUPO TRIBASA: Nafin Initiates Legal Proceedings Against Company
----------------------------------------------------------------
Mexican state-run development bank Nacional Financiera (Nafin)
last week, filed charges against construction and engineering
company Grupo Tribasa, specifically criminal charges against the
firm's chairman, David Penaloza, and is reportedly seeking to
have his bank accounts frozen, Mexico City daily Reforma revealed
Tuesday. Nafin accused Tribasa for deliberately frustrating its
attempts to sell a stake that the company formerly owned in
Inversiones & Tecnicas Aeroportuarias (ITA), an airports operator
that owns 15 percent of Grupo Aeroportuario del Sureste (ASUR).
Last year, Nafin took control of Tribasa's 3.83-percent stake in
Asur, which Tribasa held through ITA, after Tribasa failed to
make good on loan repayments to the bank.


GRUPO TRIBASA: Hits Hurdles In Debt Refinance Efforts
-----------------------------------------------------
Grupo Tribasa, which recently kicked off negotiations with the
Mexican Finance ministry and the Communications and Transport
ministry with a view to reaching an agreement on the company's
tax debt, will have a hard time dealing with its bank creditors,
Mexico City daily Reforma disclosed Wednesday. According to the
report, several of the construction firm's bank creditors have
adopted a hostile attitude toward the company's efforts to
refinance its debt. They are determined to force it into
bankruptcy, even to the point of sacrificing everything owed to
them by Tribasa, in order to force such an outcome. Furthermore,
they want to see the company's chairman, David Penaloza go to
prison.


MEXLUB: Breakdown Blamed On Pemex Competition Difficulties
----------------------------------------------------------
The future of lubricant company Mexicana de Lubricantes (Mexlub),
which is bankruptcy, is attributed to Pemex's difficulty in
dealing with competition, according to an article in The Oil
Daily Tuesday edition. Pemex owns 49 percent of Mexlub, with the
other 51 percent held by Salvador Martinez Garza, president of
Promotora Guadalajara. The lubricant subsidiary's downfall comes
at a time when a new management team at Pemex is trying to get
Congress to agree to lower its tax rate on the company by about
$3.3 billion a year so it can reinvest more cash in its energy
sector, particularly in upstream development.

Profits at Mexlub have been falling steadily for years as the
company's share of the market for lubricants and motor oils has
dwindled as a result of competition. In 1991, the company posted
net income of $ 225 million. Three years later, in 1994, Mexlub
reported a loss of $ 33,000, while earnings last year were a
meager $ 122,000. Meanwhile, debt has mounted to $ 100 million, a
sum that has been transferred to the Institute for Banking
Savings Protection or IPAB.



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P E R U
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CANAL 13: Continues With Restructuring Process
----------------------------------------------
About 60 employees have chosen the anticipated retirement plan
offered by Canal 13 as the TV channel continues with its
restructuring process, South American Business Information
reported Wednesday. The restructuring plan which was implemented
to optimize the company's resources in the face of a worsening
situation in the country's television and advertisement industry,
will see the dismissal of 20 workers, including the company's
Cable director, Juan Pablo Fresno. The TV broadcasting network
registered 2.050 billion pesos in losses in the first quarter of
this year, almost 50 percent above the same period of last year.




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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