---

       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

            Tuesday, July 10, 2001, Vol. 2, Issue 133

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Unions Urge Govt. To Save Carrier
AEROLINEAS ARGENTINAS: Eurnekian Outlines Purchase Conditions
AEROLINEAS ARGENTINAS: Air Plus Interested In Acquisition Talks
EL PAIS DE LAS MARAVILLAS: To Be Declared Bankrupt
SOCIEDAD COMERCIAL: Swiss Partners Demand Administration Changes
SWISSAIR: Gate Gourmet Lays Off 160 Workers In Argentina


B E R M U D A

COMMODORE CRUISE: Opts To Liquidate, Repay Creditors


B R A Z I L

CELESC: To Sell 19.3% Of Casan Equity To Pay Debts
CVRD: JBP Exercises Pre-Emptive Rights to Acquire CENIBRA Control
LIGHT: Closes Deal For US$250M Due 2002
REFINADORA DE OLEOS: Sells Refinery To Maggi


C O L O M B I A

BANCOLOMBIA: Moody's Retains `D' Rating, Upgrades Tendency
EMCALI: Fate Rests On Study Results Next Three Months
EMCOPER: To Be Rapidly Liquidated


M E X I C O

AHMSA: In Talks With Miners Union Over Firings, Lay-Offs
BANCRECER: Principal, Invex Can't Participate In Afore Auction
STEWART ENTERPRISES: Arrangoiz Eyes Gayoso Purchase


P A R A G U A Y

BANCOPLUS: Central Bank To Launch Liquidation This Week


P E R U

COBRELSA: Creditors Meet To Decide Future


     - - - - - - - - - -


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

AEROLINEAS ARGENTINAS: Unions Urge Govt. To Save Carrier
--------------------------------------------------------
The seven unions at the financially-strapped airline Aerolineas
Argentinas will hold a demonstration outside government offices
on Monday in an effort to sway officials to bail out the
struggling carrier, according to a report Saturday in an Airwise
News.

"The Argentine government should make the firm political decision
to guarantee the future of Aerolinas Argentinas," the secretary-
general of the flight attendants union, Alicia Castro, said at a
press conference called by union chiefs.

The unions have warned they will not accept a sale or rescue plan
that entails job cuts at either Aerolineas Argentinas or its
domestic subsidiary, Austral.

The Argentine government "should negotiate directly" with Spain
to guarantee the company's future, according to Castro.

"We should recover our flagship airline with genuine investments
and serious expansion and growth plans," she said.


AEROLINEAS ARGENTINAS: Eurnekian Outlines Purchase Conditions
-------------------------------------------------------------
According to an El Pais Friday report, Argentine businessman
Eduardo Eurnekian presented to the government a document
outlining the following conditions over buying the flag carrier
airline Aerolineas Argentinas:

-- A monopoly on domestic flights and the suspension for five
years of any deregulation of air space

-- The Spanish state holding company SEPI's assumption of the
entire debt of Aerolineas, which amounts to 200 billion ptas and
the provision of a further 60 billion ptas to meet the redundancy
payments of at least 4,500 of the company's 7,000-strong
workforce

-- A 20-billion-ptas loan from the Spanish government and a
similar one from the Spanish oil group Repsol YPF

Eurnekian owns Aeropuertos Argentinos 2000, the company that
manages the country's airports and, together with oil group
Repsol YPF, the airline's largest creditor. He also controls a
domestic airline, LAPA, and 30 per cent of another, Southern
Winds.


AEROLINEAS ARGENTINAS: Air Plus Interested In Acquisition Talks
---------------------------------------------------------------
Air Plus Argentina, an affiliate of Spanish tour group Marsans,
expressed interest Friday in coming to the negotiating table for
the acquisition of Argentine airline Aerolineas Argentinas, El
Pais revealed in a report. The statement indicates that Air Plus
Argentina, Grupo Marsans and Air Comet of Spain have agreed to
examine the possibility in response to the proposal made by
Spanish state industry holding company SEPI, which controls the
Argentine airline.

Air Plus Argentina is the country's leading private international
air transport company.


EL PAIS DE LAS MARAVILLAS: To Be Declared Bankrupt
--------------------------------------------------
Pequeno Mundo, which called in the receivers in April 2000,
requested to have its toy chain El Pais de las Maravillas
declared bankrupt, South American Business Information reported
Friday. The company, owned by the Ercovich family, had 12
branches which were all closed. Only five franchised shops
continue operations with the brand El Pais de las Maravillas.

The toy chain was badly affected by the recession in Argentina.
The company used to have a turnover as much as US$25 million
during the Holiday Season.


SOCIEDAD COMERCIAL: Swiss Partners Demand Administration Changes
----------------------------------------------------------------
The dormant Swiss partners, who control a 9.41-percent stake in
Argentine infrastructure holding Sociedad Comercial del Plata
(SCP), insisted that changes be made to the company's
administration, Business News Americas reported last week. The
changes would call for the dismissal of chairman Santiago
Soldati, who controls 33 percent of SCP through family holding
company Solfina.

SCP is listed on the Buenos Aires and Zurich stock exchanges. On
October 20, 2000, the Swiss partners, represented by Dutch bank
ABN Amro, rejected a decision by Solfina to file for protection
after it was unable to repay debts of US$842 million. The Swiss
partners also dismissed a restructuring plan implemented by
Argentina's Merchant Bank Asociados (MBA) as a "failure."

"Giving in to the unpredictable movements of justice in a
protection case is a costly and painful process in any country in
the world," ABN Amro lawyer Eduardo Represas said at the time.
"If this step is taken, the responsibility for failure must be
assumed, and [Soldati] must retire and hand over control to other
people."

SCP sources dismissed the Swiss accusations, saying they came
from a group of investors that had sold a 3 percent stake in the
company in order to purchase high-yield bonds in SCP before the
company filed for protection. The sources said the Swiss partners
wanted to liquidate the company immediately. They pointed to the
fact that SCP had generated US$3 million revenues in the first
quarter of this year.


SWISSAIR: Gate Gourmet Lays Off 160 Workers In Argentina
--------------------------------------------------------
Gate Gourmet, a unit of the financially troubled Swissair Group,
will lay off 160 staff in Argentina due to the crisis of
Aerolineas Argentinas, its largest client in the country,
according to a Gate Gourmet spokesman Nicolas Weitmann in an AFX-
Europe Friday report.

Gate Gourmet, which employs 230,000 people worldwide and operates
in 34 countries, has no intention to lay off people elsewhere,
Weitmann said.



=============
B E R M U D A
=============

COMMODORE CRUISE: Opts To Liquidate, Repay Creditors
----------------------------------------------------
Hollywood-based Commodore Cruise Line, which stopped sailing 18
months ago, ruled out the option of reorganization, AP Business
News reported Friday. In a Bankruptcy Court filing, Commodore,
which was controlled by a Bermuda-based holding company and went
public in 1996, would rather liquidate and repay creditors than
attempt a reorganization.

"There is not an expectation at this time that this plan will
result in Commodore coming back as a cruise line," said Chad
Pugatch, Commodore's bankruptcy attorney. He believes unsecured
creditors will receive some money but had no estimate.

Commodore reported a $14.2-million loss on $24.7 million revenue
during the second quarter of 2000 as the gambling venture went
sour.



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

CELESC: To Sell 19.3% Of Casan Equity To Pay Debts
--------------------------------------------------
Celesc (Centrais Eletricas de Santa Catarina), Brazil's Santa
Catarina state power distributor, will sell its 19.3 percent
participation in the state's water and waste company Casan
((Companhia Catarinense de Agua e Saneamento). The move is
designed to funds in order to pay debts, according to a report
Friday in South American Business Information. The sale of Casan
shares is expected to generate some US$50 million, which will be
used to pay US$61 million in euro commercial paper (Euro CP)
maturing July 14. The transaction is slated to take place in
September on the Sao Paulo stock market (Bovespa). According to
Celesc financial director Enio Branco, French companies Suez and
Saur and Argentina's Sagua have already expressed an interest in
the shares.

Last year, Casan reported R$263.2 million in net earnings, and
posted R$6.8 million in losses. Its net worth is estimated at
R$614.9 million. The placement will be outlined by Bescval (Besc
Distribuidora de Titulos e Valores Mobiliarios).

Branco also revealed that Celesc is also considering the sale of
23 percent of its shares in the 123MW Dona Francisca
hydroelectric plant.

Celesc is restructuring its activities and administration, a
process being undertaken by international consultant Accenture,
which should present the results of its work and its suggestions
in August.


CVRD: JBP Exercises Pre-Emptive Rights to Acquire CENIBRA Control
-----------------------------------------------------------------
Companhia Vale do Rio Doce (NYSE: RIOpr) (CVRD) announced Friday
that Japan Brazil Paper and Pulp Resources Development Co. Ltd.
(JBP), a consortium of Japanese companies, exercised its pre-
emptive rights to acquire CVRD's stake in Celulose Nipo-
Brasileira S/A - CENIBRA (CENIBRA). The CVRD stake in CENIBRA is
equal to 86,562,480 common shares, 5,694,900 preferred shares
class A and 3,211,189 preferred shares class D, amounting to
51.48% of CENIBRA's equity capital.

This transaction is subject to the same terms and conditions of
the stock sale and purchase contract signed with Carthage
Investment Corp., a joint venture formed by Votorantim Celulose e
Papel S/A (VCP) and Aracruz Celulose S/A (Aracruz), winner of the
auction promoted by CVRD on June 5, 2001.

The financial settlement of this transaction is subject to some
conditionalities, and it is expected to take place on August 27,
2001. JBP will make a cash payment to CVRD of US$670,500,000.00
(six hundred and seventy million and five hundred thousand US
dollars), and CVRD will transfer its shares to JBP. Therefore,
JBP will own 100% of CENIBRA's equity capital.

The capital gain generated by the sale of CENIBRA shares will be
reflected on CVRD's third-quarter 2001 financial statements. It
will be accrued in the financial statements of its wholly owned
subsidiary Itabira Rio Doce Company Limited (ITACO) and will
impact CVRD results through the equity income line.

The sale of the CENIBRA shares ratifies CVRD's strategic focus on
mining and logistics. Studies to divest the remaining CVRD pulp
and paper assets, Florestas Rio Doce S/A and Celmar S/A Industria
de Celulose e Papel, are in a final stage.


LIGHT: Closes Deal For US$250M Due 2002
---------------------------------------
Rio de Janeiro-based electricity distributor Light manages to
grab another market opportunity for hedging its US Dollar-
denominated debts, South American Business Information reported
Friday. The electricity company, which so far is protecting
US$700 million, is now closing deals for US$250 million due next
year. Uncertainties ahead include the rapid devaluation of the
Real currency against the US Dollar, the Argentinean crisis, and
the presidential elections of 2002. The company has total debts
of R$5 billion, 55 percent of which are tied to the US Dollar.


REFINADORA DE OLEOS: Sells Refinery To Maggi
--------------------------------------------
The soya oil refinery of the Refinadora de Oleos Brasil company,
which closed its doors last September, has been sold to Maggi
Company, the country's largest soya producer, according to a
report Thursday in South American Business Information.
Subsequently, under an agreement with creditors reached in March,
the equipment will be dismantled and transported to Maggi's new
factory in Itacoataria (Rondonia). The move is indicative of the
migration of soya processors to the north of Brazil, where
installed refining capacity is still less than the amount of
crops available as well as Maggi's move into the refining sector.



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

BANCOLOMBIA: Moody's Retains `D' Rating, Upgrades Tendency
----------------------------------------------------------
While Moody's Investors Service retained its `D' rating on
Bancolombia, it has upgraded tendency from stable to positive,
South American Business Information revealed Friday in a report.
The upgrade is due to an improvement in the quality of the
Colombian bank's assets, its capitalization process and its
leadership of the national corporate and retail banking segments.
At the end of May this year, Bancolombia posted profits of 6.878
billion pesos. Thus, so far in 2001, the bank has run up profits
of 44.789 billion pesos.


EMCALI: Fate Rests On Study Results Next Three Months
-----------------------------------------------------
The future of Cali-based services company and electricity
distributor Emcali would be decided within three months, upon the
release of a study into the coordination process to recover the
company's financial and administrative feasibility, the country's
public services regulator Diego Caicedo revealed in a Business
News Americas report Friday edition.

"Everyone is studying the figures and in three months we should
know what needs to happen in the case of Emcali and be able to
define its future direction," Caicedo said.

The possibility of receiving private capital to overcome its
present financial crisis is still being considered, Caicedo
disclosed. He cited that while reorganization would improve
Emcali's finances and in turn would validate a request for
government help, it would not be enough to overcome the
electricity distributor's crisis. Caicedo did not also rule out
the possibility of Emcali forming a strategic alliance or
association with Medellin municipality-based EPM.


EMCOPER: To Be Rapidly Liquidated
---------------------------------
Colombian food group Emcoper (Empresa Comercializadora de
Productos Perecederos) is to be liquidated and the Contraloria
General de la Republica has called on the Colombian government to
ensure a speedy process, South American Business Information
disclosed Wednesday. The quick procedure is needed in order to do
away with a situation whereby costs continue to be incurred,
erroding state resources. Emcoper received 390 million pesos over
1999 and 2000 from the state, 300 million of which is not noted
in the firm's accounts, which also lack certain documents for
other deals made. The sum that the company received could have
been held onto had a speedy liquidation been initiated given the
firm's problems. The original liquidation process was highly
unsatisfactory with various avoidable legal processes added to
the final bill.



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

AHMSA: In Talks With Miners Union Over Firings, Lay-Offs
--------------------------------------------------------
Altos Hornos de Mexico (AHMSA), the country's No. 2 steelmaker,
struggling to cut its overhead over the next six months, is now
in talks with a miners union, Mexico City daily Reforma said
Friday. Talks center on the company's plans to fire 350 workers
and to lay off, for the time being, another 872 which it would
place on 40-percent pay during the lay-off period. According to
union representative Juan Flores Martinez, AHMSA already had
begun to fire non-unionized workers but had not yet fired or laid
off any union members. Flores said no union workers would be
fired or laid off until an agreement had been negotiated with the
company.


ALFA: In Talks With French Firm Over Hylsamex Stake
---------------------------------------------------
Mexican industrial conglomerate Alfa, which for the past several
months has been on the lookout for a buyer for a minority or a
majority stake in subsidiary Hylsamex, is talking with French
steelmaker Usinor regarding the possibility of a deal, according
to a report Friday in COMTEX. Alfa executives revealed that three
steelmakers of international stature had expressed interest in
buying into Hyslamex. They did not confirm, however, statements
by informed sources that Usinor was one of the three companies.


BANCRECER: Principal, Invex Can't Participate In Afore Auction
--------------------------------------------------------------
Mexican bank bailout agency IPAB's forthcoming sale of a 47.5-
percent stake in Afore Bancrecer-Dresdner, has attracted the
interest of Mexican pension fund manager Principal Afore and
Mexico City mutual fund manager Invex, revealed Mexico City daily
Reforma Friday in a report. The pension fund manager, jointly
owned by German firms Dresdner and Allianz and government-
intervened Bancrecer is set to be sold. Unfortunately, neither
party was accredited to bid for the stake since both failed to
provide adequate documentation to be able to participate in the
auction.

Seen winning in the auction for IPAB's 47.5-percent stake are
Dresdner and Allianz, which already own a large majority stake in
the pension fund manager. A winner will be named Oct. 23,
according to the report.


CINTRA: Could Be Sold-Off Thru Public Auction
---------------------------------------------
Mexican airline holding company Cintra will likely be sold off by
means of a public auction, predicted airline industry consultant
Simon Garcia, COMTEX reported Friday. Agreeing with Garcia's
prediction is Francisco Suarez, an analyst at Grupo Financiero
Banorte. He referred to the possibility of Cintra being
privatized by means of an initial public offering on local and
international equity markets as "very unlikely". According to
him, the only real reason to use an IPO to privatize Cintra would
be to give the process "transparency."

Mexican airline holding company Cintra controls leading carriers
Aeromexico and Mexicana, and is majority-owned by the federal
government. Late last year, Mexican antitrust authorities ruled
that Cintra should be broken up and sold.


STEWART ENTERPRISES: Arrangoiz Eyes Gayoso Purchase
---------------------------------------------------
Mexican businessman Joaquin Arrangoiz is believed to be poised to
acquire funeral services company Gayosso from Canada's Stewart
Enterprises, Mexico City daily Reforma reported Wednesday. Word
on the street suggests Ricardo Salinas Pliego, chairman of
Mexican No. 2 television company TV Azteca, is providing
Arrangoiz with financial backing for the acquisition. Bank of
America in Mexico reportedly is handling the acquisition
negotiations.

Stewart Enterprises recently completed its plan to refinance
substantially all of its long-term debt and is divesting of
certain holdings to reduce liabilities.



===============
P A R A G U A Y
===============

BANCOPLUS: Central Bank To Launch Liquidation This Week
-------------------------------------------------------
The Paraguayan Central Bank is expected to start the liquidation
process of Bancoplus this week, following its intervention of the
bank, a spokesperson for the banking regulatory authority
revealed in a Business News Americas report Friday issue.
Bancoplus' financial situation is now under the investigation of
the banking regulator's office. Subsequently, it will present a
report this week to the Central Bank regarding the outcome of the
investigation. The decision of the monetary authority over the
bank's liquidation hinges on the forthcoming report. Once the
liquidation decision has been made, the Central Bank is likely to
start returning deposits to Bancoplus clients, the spokesperson
stated.

Bancoplus's owners have indicated they will cover most of the
deposits with their own resources. Paraguayan law stipulates that
depositors can claim up to US$10,000 from the government in the
event of a bank failure. The government appointed liquidator
would probably be given a one-year mandate and be required to
report to the government every three months, the spokesperson
said.

The country's Central Bank recently intervened Bancoplus at the
owners' request due to high past-due loans and capital problems.



=======
P E R U
=======

COBRELSA: Creditors Meet To Decide Future
-----------------------------------------
Creditors of copper products company Cobres Laminados (Cobrelsa)
were slated to meet Wednesday last week to decide whether to
restructure or withdraw the company from the market to be
liquidated, South American Business Information said in a report.
Cobrelsa has about US$15 million in liabilities, 85 percent of
which corresponds to debts with Wiese Sudameris. The copper
company recently succeeded in the Peruvian Central Bank's tender
for the supply of coins worth US$2.5 million per year, which
represents 50 percent of the company's production and allows it
to continue operating normally.




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
written permission of the publishers.

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.


* * * End of Transmission * * *