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                   L A T I N   A M E R I C A

            Thursday, July 12, 2001, Vol. 2, Issue 135


A N T I G U A   &   B A R B U D A

LIAT LTD.: Wants Authorities To Monitor Competitor's Fares
LIAT LTD.: Shareholders Support Re-capitalization Plan


AUSTRAL: SEPI Calls In The Receivers
GATIC: To Reopen Four Plants Soon


VARIG: Silva Lone Optimist About Getting Out Of The Red Soon


EDELNOR: ElectroAndina Launches Tender; Uncertainty Remains


BANCO DEL PACIFICO: Finance Ministry Expects Bonds


ATLANTICO: Popular In Talks Over Possible Stake Acquisition
ATLANTICO: Bital Acquisition Draws Nearer
BANCRECER: IPAB Counts ING Out Of Forthcoming Reprivatization
GESA: Sources Deny Pepsi-Gemex Acquisition Reports
GRUPO DINA: To Announce Deal With Bondholders Over The Weekend
GRUPO SIDEK: Assets Sales Report June 1 to June 30, 2001
SERFIN: Santander Mexicano Makes Top-Level Management Changes
TELSCAPE: Hearing To Approve Auction Results Set For Friday
VITRO: Announces Preliminary Second Quarter 2001 Results


POSVEN: POSCO Books 69.05B Won Special Loss From Debt Guarantee

     - - - - - - - - - - -

A N T I G U A   &   B A R B U D A

LIAT LTD.: Wants Authorities To Monitor Competitor's Fares
Officials of the regional carrier LIAT (1974) Limited requested
aviation authorities in Barbados, as well as in the Caribbean, to
monitor fares offered by its newest competitor, Caribbean Star,
The Barbados Advocate reported July 6, 2001.

According to LIAT's director of marketing, David A. Stuart, while
his organization had attracted more travelers than its fellow
Antigua-based competitor, its "predatory" price was becoming a
major worry.

"They are operating in a manner which indicates that they are a
predator to LIAT. They are announcing route services and have
already said that their flights will be at 50 per cent of the
current (LIAT) air fares," the official stated.

"We think that is predatory and we feel that the air authorities
should take note of that. And we are particularly peeved, as all
Caribbean people should be, that in another section of the media
(in Antigua) they have referred to LIAT as a `rinky-dink
airline'," he added. Stuart also charged that Caribbean Star had
told its employees that the struggling LIAT "must die by
November" this year. Caribbean Star's intention is to succeed
LIAT by establishing a hub here, which would be a major blow.

LIAT LTD.: Shareholders Support Re-capitalization Plan
A statement released Friday revealed that during a shareholders
meeting at the Royal Antiguan Resort last week, LIAT (1974) Ltd.
shareholders expressed their full support of a plan to re-
capitalize the airline company, Caribbean Airnews said in a

"Shareholders were briefed on the current phase of the re-
capitalization of the company. They expressed their full support
for the Company in its efforts and also passed a resolution
authorizing the board to raise additional capital through a new
share offering," the statement said.


AUSTRAL: SEPI Calls In The Receivers
Spanish state holding company Sociedad Estatal de Participaciones
Industriales (SEPI) will call in the receivers for the airline
company Austral, according to a report Tuesday in South American
Business Information. The Spanish State owns 90 percent of
Austral's share package and 10 percent is owned by its employees.
The airline, which has a net capital of US$18 million, had losses
of US$30 million during the financial year 1999-2000.

Austral was privatized in 1987 and its capital decreased from
US$68mil in 1994 to US$42mil in 1999. That same year, Aerolineas
Argentinas started to sell Austral's tickets.

GATIC: To Reopen Four Plants Soon
Sports clothes and shoe manufacturing company Gatic will open
four plants again soon. Production, which fell 50 percent, is
expected to return to normal levels, South American Business
Information reported Tuesday. Reopening of the plants comes after
a VAT repayment, represented by a US$12-million debt that the
government owed to Gatic. The funds will help the company pay
salary debts totaling US$6.5 million, while the rest of the money
will be destined to the brands that own the licenses (Adidas, LA
Gear, Le Coq Sportif, Reef, Arena, Signia and Asics). The balance
of the repayment will be used to restart production. The
Bakchellian-family owned Gatic had US$210 million in debts, which
it refinanced last year.

Meanwhile, Gatic still has to deal with the renewal of its
license with Adidas International, set to expire at the end of
this year. Adidas International accounts for 50 percent of
Gatic's sales. The company is also negotiating to acquire the
license of the Italian company Kappa.


VARIG: Silva Lone Optimist About Getting Out Of The Red Soon
Despite a crushing $1.3-billion debt and nearly four straight
years of losses at Brazil's No. 1 airline Varig, Ozires Silva,
the head of the country's national carrier, is still optimistic.
Mr. Silva says that the airline's reputation and 140-strong fleet
will help catapult earnings out of the red and into friendlier
skies in the near future, according to a South American Business
News story Tuesday.

However, with a domestic market severely impacted by high dollar
costs, the usual airline strategies of selling more tickets or
expanding routes won't work fast enough.

"We want to create assets with the Varig brand that can then be
sold to reduce our debt," Silva said, adding, "If I need money, I
go to the market and sell what I have."

Some industry analysts, on the other hand, do not share Silva's
optimism after witnessing Varig's fruitless attempts to turn its
finances around during the last few years. Carlos Antonio
Magalhaes, director of analysis at Sirotsky & Associados said
Silva "is the only one who is optimistic about Varig."

"Varig is like a father who cannot support his children and puts
them to work," he said.

If it does not reduce its debt, Magalhaes said Varig can forget
about attracting a powerful partner.

"The best thing for Varig would be a big partner, but that is
difficult because it would have to inject a lot of money," he

The airline's hefty debt load, 80 percent of which is in
denominated in dollars, has kept Varig from really taking off.


EDELNOR: ElectroAndina Launches Tender; Uncertainty Remains
ElectroAndina announced Tuesday its intent to launch a tender
offer for all of Empresa Electrica del Norte Grande S.A.'s
(Edelnor) $340 million of outstanding bonds at a price of $0.325
on the dollar.

The move follows the deterioration of credit fundamentals at
Edelnor and the announcement in 1998 by Mirant, Inc. (formerly
the Southern Company, and Edelnor's majority shareholder of 82%)
of its intent to sell and write off its Edelnor investment. The
terms of the tender offer are for `not less than all' of
Edelnor's 10 1/2% senior loan certificates due 2005 and 7 3/4%
senior loan participation certificates due 2006 and the
acquisition of Mirant's entire equity interest for not more than

The transaction as proposed holds the potential to be moderately
positive for ElectroAndina's credit fundamentals, giving the
company the commanding presence in Chile's Northern
Interconnected System (SING), improving its overall cost
position, and adding to its existing generation portfolio.
ElectroAndina currently owns several coal and diesel fired units
and one, new 400 MW combined cycle gas turbine unit.
ElectroAndina's ability to add to revenues and reduce overhead,
coupled with reduction of the face value of Edelnor's debt should
result in improved cash flow and possibly coverages depending on
the all-in cost of acquiring Edelnor's outstanding debt.
Completion of the transaction as proposed remains uncertain.

Edelnor's debt is currently rated `CCC', Rating Watch Negative
and reflects continuing poor financial performance, short-term
liquidity concerns, and reliance on non-core asset sales. The
company's liquidity position is very tight given estimated cash
on hand and required expenditures and payments in 2001. Cash
generation through operating activities has been limited due to
competitive pricing pressures in the SING and the resulting
impact on Edelnor's margins and cash flow. If the current offer
fails to attract adequate participants, Edelnor's ratings would
be expected to remain unchanged at `CCC', Rating Watch Negative.
A `CCC' rating indicates that default of some kind is a

ElectroAndina is currently rated `BBB' based on its long-term
purchased power agreements with strong mining companies,
continued service territory demand growth, new owned low-cost
gas-fired generating plant, sound operating strategy, and solid
financial profile. The company is owned by Inversiones Tocopilla
Ltda, which has control, and Codelco. Inversiones Tocopilla is
controlled by the consortium Inversora Electrica Andina, which is
100%-owned by Tractebel.


BANCO DEL PACIFICO: Finance Ministry Expects Bonds
The capitalization of Banco Pacifico was declared illegal by the
Banks Superintendece, requiring disposal and devolution of the
bonds orginally issued for this goal. However, the papers have
not been returned to the Finance Ministry yet, according to the
Bolsa de Valores de Guayaquil. Accordingly, the US$ 89 million
worth of bonds are frozen in an account at the Central Bank in
favor to Banco Pacifico.

Banco Pacifico had to be capitalized with US$ 98.9 million
instead of the US$ 89 million originally planned because of a
deficit in the provisions level. With the higher amount banks
provisional capital level increases from 10 percent to 27


ATLANTICO: Popular In Talks Over Possible Stake Acquisition
A spokesperson from Banco Popular Espanol SA confirmed that the
Spanish financial group is now in talks with Banco Atlantico SA
over a possible acquisition of an equity stake in Atlantico, AFX-
Europe revealed in a report Tuesday.

"It's one thing to talk and quite a different thing to
negotiate," the spokesperson cautioned.

This confirmation follows weeks of speculation concerning
Popular's and Banco Sabadell SA's interest in Banco Atlantico.
Rumors that Atlantico is in play have circulated since its
chairman and Arab Banking Corp (ABC) representative Abdulmohsen
Al-Hunaif said ABC is open to selling its 68 percent stake in the
Spanish bank.

"We've spoken to Atlantico and, as with Sabadell, they've told us
they aren't interested," the spokesperson disclosed. "At the
moment we're not negotiating with anybody", he added.

Meanwhile, Banco Atlantico has denied that it is in formal
conversations with Popular.

ATLANTICO: Bital Acquisition Draws Nearer
Mexico's Grupo Financiero Bital is about to wrap up the
acquisition of Banco del Atlantico and is now in talks with
foreign strategic partners ING, BSCH and BCP about the completion
of its capitalization program, South American Business
Information reported Tuesday. Bital needs capitalization of
US$100 million for the Atlantico acquisition, with banking
institute IPAB having already injected 13 billion pesos into the
restructuring of the bank-to-be-bought. Once it finalizes the
acquisition, Bital must spend another US$200 million on
Atlantico. To acquire such quantities, Bital may have to sell
stakes in Camesa (30 percent) and Vidrio Saint Gobain (20
percent) and/or issue shares or bonds. In addition, Bital will
need to strenghten its ties to one of its partners to pull off
the deal.

BANCRECER: IPAB Counts ING Out Of Forthcoming Reprivatization
ING Baring of Mexico has stated that it is not one of the formal
bidders for Bancrecer of Mexico after all, South American
Business Information reported Tuesday. According to the Mexican
banking institute IPAB, Deutsche Bank, which is handling the
tender process, had informed it incorrectly. As a result, there
will only be three banks considered as "serious" in the bid for
the upcoming reprivatization of Bancrecer, namely Banorte,
Scotiabank and Sabadell. Scotiabank, however, is at a risk of an
enforced withdrawal due to its close ties at present with IPAB.

ING Baring of Mexico had been expected to bid as it continues its
rapid return to form, but has instead surprised analysts by not
competing after all. Now, ING is widely believed to be preparing
a buy-out of famously independent partners Bital in Mexico.

GESA: Sources Deny Pepsi-Gemex Acquisition Reports
The Mexican subsidiary of PepsiCo Inc. is reportedly urging its
Mexican anchor bottler, Pepsi-Gemex, to acquire fellow Pepsi
bottler Grupo Embotelladora del Sureste (GESA), according to a
report Monday in Mexico City daily Reforma. However, sources at
GESA, currently owned by U.S.-based capital fund Advent, denied
it had been approached by Pepsi-Gemex regarding a possible
acquisition. While PepsiCo Mexico is in close contact with GESA,
the issues at stake are the company's financial difficulties and
an ongoing refinancing process, not a potential acquisition by
Pepsi-Gemex. The refinancing process and a required injection of
fresh capital at GESA reportedly involve a total amount of $30
million. GESA will not be in a position to hold talks with Pepsi-
Gemex until the process is completed, likely late in the third

GRUPO DINA: To Announce Deal With Bondholders Over The Weekend
Mexican heavy-vehicle maker Dina is expected to make an
announcement by the end of the week that it has reached an
agreement with bondholders over bonds originally issued for $164
million, Mexico City daily Reforma reported Tuesday.

Early reports have it that ongoing talks with bondholders revolve
around the subject concerning the discount at which Dina would
propose to buy back the bonds. The majority of the bonds are
reportedly held by Joseph Little Jones, whom Dina currently is
believed to be in negotiations.

GRUPO SIDEK: Assets Sales Report June 1 to June 30, 2001
Grupo Sidek, S.A. de C.V. (OTC Bulletin Board: GPSAY GPSBY)
announced Friday a report regarding assets sales from June 1,
2001 to June 30, 2001, pursuant to its obligations under the
restructuring agreements entered into with Sidek Creditor Trust:

                        Assets Sales Report
                 From June 1, 2001 to June 30, 2001
                     (Figures in US$ thousands)

Assets with
Reorganization Value
higher than USD$ 5,000        Sales Value    Reorganization

I. Hotels                           0               0
II. Real Estate                     0               0
III. Marinas and Golfs              0               0
IV. Other                           0               0
Subtotal                            0               0

Assets with
Reorganization Value
less than USD$ 5,000
Subtotal (transactions)           794               N.A.
Total                             794               N.A.

When a new ADSL system installed for the company by another
company broke down on its first day in operation, Mexican
facilities-based telecommunications provider Maxcom turned to
U.S.-based Cisco Systems for assistance, according to a report in
Mexico City daily Reforma Tuesday edition. Turning to Cisco for
help is just one of a recent series of changes taking place at
the company since Fulvio del Valle took office in April as
Maxcom's top executive. Del Valle, a former CEO of Mexican No. 2
mobile carrier Iusacell, has taken the proverbial broom to Maxcom
since moving to the company, relieving Maxcom chief of
Procurement, Guillermo Azurdia, and the company's external
auditors, BDO, of their responsibilities.

SERFIN: Santander Mexicano Makes Top-Level Management Changes
After acquiring Grupo Financiero Serfin last May for $1.4 billion
from bank bailout agency IPAB, Grupo Financiero Santander
Mexicano, the Mexican subsidiary of Spain's Banco Santander
Hispano Central (BSCH), is implementing top-level management
changes, Mexico City daily Reforma said Tuesday in a report.
Rafael Caballero, Santander Mexicano's Executive Director of
Human Resources, is expected to leave the group soon. His move is
seen as the first of a series of top-level departures. Santander
Mexicano reportedly is seeking to eliminate many of the layers in
the group's hierarchical structure. Additionally, several new
executives could join the group from its parent company in Spain.

TELSCAPE: Hearing To Approve Auction Results Set For Friday
An auction of certain CLEC, Internet and satellite teleport
assets of Telscape International, Inc. and several of its
affiliates ("Telscape") occured on July 10, 2001 at 2:00 p.m. at
the offices of the law firm of Greenberg Traurig in New York
City. A hearing to approve the sale is to be held on July 13,
2001 in the United States Bankruptcy Court for the District of
Delaware, according to David Neier, the Chapter 11 Trustee for

Telscape is a bankrupt telecom company that owns a variety of
assets, including a CLEC in California and a fiber optic network
in Mexico, as well as two teleports. In the United States,
Telscape offers local access and network products, international,
long distance and other voice and data services, primarily to
"niche" markets in Hispanic communities in Los Angeles, San Diego
and Houston. Telscape filed for bankruptcy in Delaware on April
27, 2001. Bids for Telscape assets were submitted by July 9.
Anyone interested in receiving information concerning the sale
should contact David Neier via e-mail at

VITRO: Announces Preliminary Second Quarter 2001 Results
Vitro, S.A. de C.V. (BMV: VITROA; NYSE: VTO) announced Tuesday
selected unaudited preliminary results for the three-month period
ended June 30, 2001.

Consolidated net sales for the second quarter were Ps$7,183
million, compared with Ps$7,298 million for the same quarter of
last year. In U.S. dollars, consolidated net sales for the
quarter rose YoY by 7.5 percent to US$784 million. Main drivers
of these results were the sales performance by the Flat Glass,
Acros Whirlpool and Glass Containers business units, including
the recent acquisition of Cristalglass' 60% stake, a Spanish flat
glass producer and distributor.

For the quarter, the Company posted consolidated EBIT of Ps$810
million and EBITDA of Ps$1,360 million, representing YoY declines
of 14.5 percent and 6.9 percent, respectively. In U.S. dollars,
consolidated EBIT and EBITDA for the quarter were US$88 million
and US$148 million, respectively, representing a decline of 5.4
percent in EBIT and an increase of 3.4 percent in EBITDA, when
compared with the same period for the previous year. The Company
continues to be affected by the strong peso, and still high YoY
energy prices. Other factors having an impact on results include
price pressures arising from the slowdown of the US and Mexican
economies, which has reduced demand and, as a consequence,
increased the amount of fixed costs as a percentage of sales for
some of the business units.

The Company continues with its strategy to divest non core assets
and completed the sale of 50% of Regioplast to its partner Owens
Corning for approximately US$8 million.

An overview of the operating results for each of the five
business units follows:

Flat Glass

In nominal dollar terms, sales in this unit rose mainly as a
result of the growth in the construction industry as well as the
acquisition of Cristalglass, which started to consolidate during
May '01, partially offsetting lesser sales in the auto segment
for both Mexico and the U.S. Profitability is being pressured by
a strong peso that promotes imports, volume adjustments in the
OEM sector and extraordinary charges resulting from the write-off
of obsolete inventories.

              Second Quarter          Second Quarter
              Constant Pesos          Nominal Dollars
              --------------          ---------------
                2001    2000      %     2001    2000      %
                ----    ----      -     ----    ----      -
Con. N. Sales  2,488   2,516   -1.1%     272     256    6.5%
EBIT             285     415  -31.4%      31      41  -24.2%
EBITDA           422     559  -24.4%      46      55  -16.5%

Acros Whirlpool

Acros Whirlpool continued to enjoy sales growth, driven by volume
increases in both the domestic and export markets. In the
domestic front, sales volumes for both refrigerators and washers
continued to improve, while in the export market refrigerator
shipments to the US increased significantly, in spite of the US
economic downturn, since our export models represent a more
affordable option to the US consumers. As to profitability, the
competitive environment has resulted in continuous price
pressures in the domestic market, specially as a result of Asian

                Second Quarter          Second Quarter
                Constant Pesos          Nominal Dollars
                --------------          ---------------
                  2001    2000      %     2001    2000      %
                  ----    ----      -     ----    ----      -
Con. N. Sales    1,527   1,453    5.1%     166     142   17.4%
EBIT               136     163  -16.6%      15      16   -6.8%
EBITDA             195     228  -14.8%      21      22   -4.8%


Sales for the quarter decreased mainly as a result of reduced
demand in the retail and industrial sectors, as a consequence of
the slowdown of the US and Mexican economies. To mitigate the
reduction in sales, the Company is reducing inventories as a
strategy to increase its cash flow. There are also higher YoY
distribution costs as a result of the improvement of its
distribution network (which was mentioned in previous quarters).

               Second Quarter          Second Quarter
               Constant Pesos          Nominal Dollars
               -------------          ---------------
                2001    2000      %     2001    2000      %
                ----    ----      -     ----    ----      -
Con. N. Sales    516     593  -13.0%      56      59   -4.2%
EBIT              68     108  -36.8%       7      11  -30.3%
EBITDA           120     150  -20.4%      13      15  -12.0%

Glass Containers

Volume increases YoY, specially in the export markets, drove the
sales increase for the quarter, overcoming price pressures in
this business. Profitability wise, price pressures continue to
impact margins in a YoY comparison. However, it is important to
note that for the third consecutive quarter the EBIT margin shows
an improvement as compared to the previous quarter (margin for
IQ'01 was 10.7% against 11.3% for IIQ'01).

                Second Quarter          Second Quarter
                Constant Pesos          Nominal Dollars
                --------------          ---------------
                  2001    2000      %     2001    2000      %
                  ----    ----      -     ----    ----      -
Con. N. Sales    1,965   1,939    1.4%     215     195    9.9%
EBIT               222     271  -18.2%      24      27   -9.4%
EBITDA             429     454   -5.6%      47      45    4.4%

Diverse Industries

The YoY comparison in sales for the business is affected by the
closing of MEF, the former joint venture with General Electric,
last August, which represented nearly 7% of the unit's last
year's quarterly revenues. A decline in the domestic consumption
by retailers affected the aluminum cans and plastic businesses,
which were partially offset with additional sales by the capital
goods segment and the soda ash operations. EBIT for the quarter
declined primarily as a result of the strength of the peso. The
increase in natural gas prices continued to affect YoY
comparisons, particularly in the soda ash operations.

                 Second Quarter          Second Quarter
                 Constant Pesos          Nominal Dollars
                 --------------          ---------------
                   2001    2000      %     2001    2000      %
                   ----    ----      -     ----    ----      -
Con. N. Sales       675     787  -14.2%      74      77   -4.5%
EBIT                113     109    3.9%      12      11   16.6%
EBITDA              178     168    6.1%      19      16   18.7%


POSVEN: POSCO Books 69.05B Won Special Loss From Debt Guarantee
Pohang Iron & Steel Co (POSCO), in a statement to the Korean
Stock Exchange, said it booked a 69.05-billion won special loss
in the first half associated with payments made on a debt
guarantee provided for its Venezuelan unit POSVEN, revealed AFX-
Asia in a report Tuesday. According to the statement, POSCO and
its two units repaid a total of US$159.6 million in debt
defaulted by POSVEN, with POSCO taking up US$106.4 million and
the two units the remaining US$53.2 million on behalf of the hot-
briquette iron manufacturing unit in Venezuela.

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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