TCRLA_Public/010723.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 23, 2001, Vol. 2, Issue 142



AEROLINEAS ARGENTINAS: Chairman's Sale Decision Expected Monday


CVRD: Electricity Rationing Bites Into Aluminum Profits
CVRD: Authorizes Share Buyback Program
CVRD: Moves Forward On Copper Joint Venture With Phelps Dodge
DAIMLERCHRYSLER: To Launch Voluntary Redundancy Program In Brazil
TRANSBRASIL: Employees To Strike Over Non-Payment Of Salaries


CANAL RCN: Continues Debt Renegotiation With Creditors




BANCRECER: Banorte May Seek External Funding For Purchase
GAN: Federal Tribunal Issues Arrest Warrants For Two Executives
MINERA AUTLAN: Searching For Strategic Partner; Selling Assets
MULTICANAL: Offers 93 Cents For $125M Bond Due In February
STEWART ENTERPRISES: BofA Solves Debt Restructuring Dilemma
VITRO: Planned Lay-offs To Affect Only Contracted Personnel

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AEROLINEAS ARGENTINAS: Chairman's Sale Decision Expected Monday
The departing chairman of Sociedad de Participaciones
Industriales (SEPI), Pedro Ferreras, expects a decision on the
sale of Aerolineas Argentinas to come before Monday, AFX-Europe
reported Thursday. Ferras revealed that the Spanish state holding
company has already received a total of four offers for the
ailing airline, but these are fairly vague at present. He hopes
to have most of the issues resolved over the weekend.

Peru's Aerocontinente, a consortium headed by Aeropuertos
Argentina 2000 SA chairman Eduardo Eurnekian and including
Spain's Air Europa, as well as two Argentine companies have made
offers for Aerolineas, he said. In a last minute race against the
clock, SEPI will have to select one of the bids to keep the
company afloat. One thing is clear: SEPI will not assume
Aerolineas' debts nor will it contribute to the cost of a change
in management.

Ferreras has reportedly decided to resign in order to resume his
career as a lawyer in Barcelona, after spending five years at


CVRD: Electricity Rationing Bites Into Aluminum Profits
Companhia Vale do Rio Doce disclosed that the power crisis in
Brazil took a bite out of the company's profits enjoyed from its
bauxite-to-aluminum operations, Business News Americas reported

CVRD's aluminum operations turned in net income of R$63 million
(US$25.7 million at current exchange rates) in 2Q01, down 24
percent from the R$83 million in same-period 2000. Net operating
revenues were R$719 million compared to R$558 million.

According to CVRD, reduced output due to electricity rationing
was to be blamed for the reversal in what has been a series of
profitable quarters for the one-time ugly duckling of its

Additionally, CVRD said macroeconomic factors affected its
prospects - Brazil's electricity rationing, the Argentine
economic crisis, the depreciating real and tighter domestic
monetary policy.

"The combination of a tighter monetary policy and the effect of
the energy crisis runs the risk of producing a sharper-than-
desired deceleration in short-term economic growth," the company

CVRD has acted to prevent disruption to its main businesses due
to power rationing. Bauxite mining is covered by self-generation,
but electric-intensive activities, aluminum smelting and ferro-
alloys will see further output reductions.

CVRD: Authorizes Share Buyback Program
The Board of Directors of Companhia Vale do Rio Doce (CVRD)
authorized on Wednesday a share buyback program, according to the
following conditions:

(a) it will be limited to 10,870,366 common shares and 10,338,303
class "A" preferred shares;

(b) the Company will buy the shares at the Sao Paulo Stock
Exchange (BOVESPA);

(c) the acquisition of these shares will made through the
following brokerage houses: Liberal S.A. Corretora de Cambio e
Valores Mobiliarios, rua do Carmo, 7, 8th floor, Rio de Janeiro,
RJ and Bradesco S.A. CTVM, av. Ipiranga, 282, 11th floor, Sao
Paulo, SP;

(d) the share buyback program will be effective up to three
months after July 18, 2001.

The decision of the CVRD's Board of Directors is based on article
30 of Law 6,404/76 and CVM Instructions number 10, of 02/14/80,
and number 268, of 11/13/97.

CVRD: Moves Forward On Copper Joint Venture With Phelps Dodge
In a move, which marks a first step towards achieving an
aggressive plan of becoming one of the world's leading copper
producers, CVRD declared it was pressing ahead with a $400-
million copper mining joint-venture with Phelps Dodge, the US
mining group, the Financial Times reported Thursday.

CVRD, which has restructured over the past year to focus on its
core business of mining and logistics, is looking to develop at
least five copper mines in the Caraja region in Brazil's northern
Para state over the next six to seven years.

"If they all go ahead, we are looking at investments of $1.2bn
and a production of 700,000 tonnes per year," said Roberto
Castello Branco, head of investor relations.

After it was privatized in 1997, CVRD expanded its mineral
exploration to include nickel, zinc, copper and diamonds.

"We are looking at other ways to make CVRD big in the global
context," said Roger Agnelli, who was confirmed as the new chief
executive officer on Wednesday and pledged to push ahead with the
company's transformation.

DAIMLERCHRYSLER: To Launch Voluntary Redundancy Program In Brazil
DaimlerChrysler AG will launch Monday a program of voluntary
redundancies for as many as 583 workers at its Mercedes-Benz
plant in Sao Bernardo do Campo, Brazil, AFX Europe reported
Thursday. The plant employs 10,400 people.

"The measure is a temporary program to reduce costs but not
vehicle production," said company spokesman Andre Senador. The
company is restructuring some areas in order to reduce fixed
costs through the rationalization of processes and synergies
between some activities.

DaimlerChrysler's Sao Bernardo workers have three weeks to accept
layoff packages, which can include severance payment of up to
eight months salary, Senador said. If workers don't accept the
layoffs, the company may resort to a different program. Senador
didn't say whether firings are being considered.

DaimlerChrysler recently announced it would invest R$500 million
in Brazil this year and in 2002 to transform the country into a
leading center for the development and manufacture of commercial
vehicles. The announcement, which was made by the company's
chairman in Latin America, Ben van Schaik, came in the midst of a
debate about the company's strategy to offset a possible slow-
down in the second half.

TRANSBRASIL: Employees To Strike Over Non-Payment Of Salaries
Employees of Transbrasil SA Linhas Aereas are threatening strike
action over non-payment of salaries and are also preparing to
make a complaint to the Ministero Publico, South American
Business Information reported Thursday. The company's pilots, who
will take a strike vote in mid-July, are concerned about the
recent application by General Electric (GE) to initiate
bankruptcy proceedings against the Brazilian carrier. Transbrasil
affirmed it has presented to the court on Wednesday its defense
against GE's petition. General Electric hopes to collect funds it
claims due for the leasing of aircraft, the amount of which has
been disputed by both companies.


CANAL RCN: Continues Debt Renegotiation With Creditors
Canal RCN, a 3-year old Colombian private TV station, is
currently renegotiating debt payments with its creditors in an
effort to turn its short-term debt into medium-term credit, South
American Business Information reported Thursday. Should the
process yield positive results, the dollar-peso ratio of the debt
would not be affected. At the end of March 2001, RCN has debts to
groups such as SG, Lloyds, Chase Manhattan and Bancafe of
Colombia amounting to 144.217 billion pesos (49.222 billion pesos
acquired in pesos and 94.995 billion pesos acquired in dollars).


Guatemalan deputy banking regulator Ergas Barquin revealed that
the government has reached a decision to merge state-owned bank
Banco Credito Hipotecario Nacional (BCHN) and army-controlled
Banco del Ejercito in December this year, Business News Americas
reported Thursday. The forthcoming transaction will see BCHN
absorbing Ejercito's operations, with the new entity set to
become a mid-sized bank. Both small banks are individually
struggling with solvency problems relating to high past-due and
non-performing loans, Barquin related.

Authorities will start with the evaluation process later this
month, including hiring a local consulting firm, he stated.

The merger is part of the regulator's goal to weed out troubled
banks from the financial system and reduce the number of
operators, which today stands at 28, "... too many for a small
economy such as Guatemala's," Barquin said.


BANCRECER: Banorte May Seek External Funding For Purchase
Othon Ruiz Montemayer, director general of Banorte Financial
Group, said that their strategy to obtain Bancrecer awaits the
valuation of the government-intervened institution, COMTEX
reported Thursday. However, he predicted that the group could
resort to external funding in order to buy Bancrecer. Banorte
still has to evaluate Bancrecer. The moment the value of the
proposed purchase is known, Banorte will look at options, whether
to use their own resources or approach some alternative source,
although Ruiz said their primary interest was to look after the
franchise they already have.

GAN: Federal Tribunal Issues Arrest Warrants For Two Executives
A Federal Tribunal issued warrants of arrest for two top
officials of Grupo Acerero del Norte (GAN), Mexico City daily
Reforma said Thursday in a report. The company's president,
Xavier Desiderio Autrey Maza, and its financial director, Jorge
Alberto Ancira Elizondo, allegedly falsified information in order
to obtain an 11 million-peso loan from the Bank of Bajio. When
the loan, which was made on Feb. 19, 1998, was not paid on time,
the bank turned to the guarantees provided, which turned out to
be insufficient to cover the debt.

Lawyer Gerardo Jimenez, who is acting for the bank, said that as
of Wednesday there was no sign of the two executives, and they
would be asking assistance from the Attorney General's Office and
Interpol to find them.

"The most likely case is that they have escaped to the United
States of America," Jimenez said.

Just last week, GAN obtained from its bank creditors approval on
a series of steps toward its goal to restructure several hundred
million dollars of debt. The completion of GAN's restructuring is
vital to the lifting of Altos Hornos de Mexico SA's (AHMSA) two-
year-long suspension of payments.

MINERA AUTLAN: Searching For Strategic Partner; Selling Assets
Gustavo Cardenas, a spokesperson for Mexican ferro-manganese
producer Minera Autlan, revealed that the company is seeking a
"strategic partner" and has launched a program to sell off its
non-core assets in a bid to reduce debt, Business News Americas
reported Thursday. A likely partner may emerge from among the
eight or ten companies, mostly foreign, who have expressed an
interest in such a role.

Autlan is looking to sell off its extensive land holdings
throughout Mexico to raise cash, Cardenas revealed. Other asset
sales have not yet been defined, but the spokesperson reiterated
that the company would not be selling any of its core businesses,
including its mines and manganese-processing facilities. The
company has hired BNP Paribas bank to head the search for a
strategic partner, but so far there are no specific candidates in
mind, he added.

The financial situation at the Mexican mining group is
deteriorating. Primary factors in the strugglin include the US
economic deceleration and the exchange rate between dollars and
Mexican pesos. Much of the company's debt is listed in dollars
and stands at around US$80 million.

MULTICANAL: Offers 93 Cents For $125M Bond Due In February
Multicanal SA, Argentina's second-largest cable television
company, said it is offering to buy its $125 million bond due in
February for 93 cents on the dollar, Bloomberg reported Thursday.
The offer, which started June 29, is contingent on selling a 4
percent stake in DirecTV Latin America to pay for buying back the

Multicanal, which is owned by media company Grupo Clarin SA, is
one of the companies in Argentina that may have trouble
refinancing $11.6 billion in bond payments due this year and next
amid concern the government may default on its debt. The cable
television company is currently negotiating with banks to
refinance $150 million in bonds coming due next month held by
seven banks, including Deutsche Bank AG, BankBoston, Citigroup
Inc. and Credit Suisse First Boston, said Daniel Lerner, a Latin
America debt analyst at Bear, Stearns & Co.

"These banks have every incentive to roll it over," Lerner said.
"If the banks say `no,' they risk having $850 million of
Multicanal debt go into default now."

STEWART ENTERPRISES: Banc of America Securities Provides
Comprehensive Financing Solution
Banc of America Securities announced Wednesday a successful
recapitalization for Stewart Enterprises. Through a suite of
solutions including syndicated finance, high yield, high yield
special products and derivative products, Banc of America
Securities provided a one-stop financial solution for Stewart
Enterprises, Inc.

The financing package, which consisted of $550 million of senior
secured credit facilities and $300 million of senior subordinated
notes, refinanced the majority of Stewart's corporate
indebtedness. The floating rate transaction included a $175
million revolver, a $75 million asset sale term loan and a $300
million "B" term loan. Due to significant oversubscription, the
term loan tranche was upsized and pricing was flexed down 12.5
basis points from its original level. The high-yield offering was
equally well received by investors and is currently trading
strongly in the secondary market.

In addition to leading both the syndicated loan and high-yield
offerings, Banc of America Securities was the sole manager on a
tender offer for $200 million of outstanding Senior Notes. In
addition the Banc of America Securities M&A group has been
advising Stewart on the sale of its international operations.

Stewart Enterprises is the third largest provider of death care
services in North America. It owns and operates 612 funeral homes
and 161 cemeteries in North and South America, Europe and

"Investor receptivity in the debt capital markets was very
favorable," noted Glenn Stewart, head of Loan Syndicate at Banc
of America Securities. "The transaction is a prime example of
investors' desire for diversification. We were especially pleased
that investors took the time to analyze and understand the
company's performance as well as improving industry

William Rowe, president and CEO of Stewart Enterprises commented:
"We were very satisfied with the high level of interest
demonstrated by the investment community in our debt offerings.
We have a healthy company, with strong business fundamentals, and
we are well positioned to deliver outstanding results in the
future. We received tremendous support from Banc of America
Securities LLC in structuring and arranging this complicated
recapitalization. Their execution was solid, in a challenging
market, across all product lines."

Previously, in a TCR-LA report, Mexican businessman Joaquin
Arrangoiz was believed to be poised to acquire Stewart
Enterprises' funeral services company, Gayosso. According to the
report, 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.

VITRO: Planned Lay-offs To Affect Only Contracted Personnel
With an aim to reduce its payroll in a cost-cutting move, Mexican
glassmaker Vitro SA revealed on Wednesday who will be affected by
the previously-announced layoffs, Mexico City daily Reforma
reported Thursday. Vitro, which has been suffering under a strong
peso and high energy costs, confirmed that 1,000 contracted
workers would be axed; operating or unionized workers will not be
affected. The company specified that the July 13 information,
which stated that 20 percent of staff would be cut, affected only
contracted personnel. Vitro has a total of 33,800 workforce
inside Mexico and overseas, including administrative and
operating staff.

Last week, Vitro said its preliminary second quarter operating
profit was 810 million pesos, down 14.5 percent from the year-ago
period. The company said its results were impacted by the strong
Mexican peso, which has clipped exporters' profits, and high
energy costs versus those in 2000.

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
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Information contained herein is obtained from sources believed to
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