/raid1/www/Hosts/bankrupt/TCRLA_Public/010816.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

            Thursday, August 16, 2001, Vol. 2, Issue 160

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: SEPI Delays Sale Until September


B R A Z I L

ALPARGATAS: Sells Fishing Company To Shore Up Finances
ELETROPAULO/CELESC: Likely To Struggle In Rolling Over Debts
EXCEL: Former Pres. Sues Banco Central, BBV; Demands Reparations
GLOBO CABO: 2Q01 Results; Net Revenue Down 11%, EBITDA Down 19%
LOJAS ARAPUA: Pending Court Rulings, Future Still Unclear
VARIG: 1H01 Net Loss Widens To R$509M
VARIG: Creates $50M Venture With 5 Other Companies


C O L O M B I A

PAZ DEL RIO: Gains Creditor, Shareholder Support For Restructure
SEVEN SEAS: 2Q01 Results; Pipeline Completion Widens Losses


D O M I N I C A

DOMINICANA AIRLINES: Only 4 Companies Remain In Bidding


E C U A D O R

FILANBANCO: Audit Results To Be Released October After Delay
FILANBANCO: Government Moves To Restore Faith In Banking System

M E X I C O

ATLANTICO: Bital Continues To Struggle For Its Acquisition
GRUPO MEXICO: To Restructure US$500M Debt Shortly
GRUPO TMM: Serrano/Segovia Insiders Buying Shares At Lows
QUADRUM: Talking To Potential Partners; Intervention Unneeded
SECURITY PLASTICS: Liquidating Latin American Plants Under Ch 7


P E R U

AERO CONTINENTE: Lima To Santiago Flights To Resume Soon


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: SEPI Delays Sale Until September
-------------------------------------------------------
Spanish state industrial holding company SEPI has postponed its
decision on a buyer for Argentine national carrier Aerolineas
Argentinas until September, Gaceta de los Negocios reported
Tuesday. SEPI originally planned to announce the winning bid this
Friday but sources said the company wants to take more time to
look at the possibility of carrying out a pre-qualifying stage.
During this phase of the process proposals of the two or three
companies with the best offers would be selected.

According to the same sources, SEPI will spend the balance of the
summer looking at the best quality offers, and would ask these
companies to expand their proposals to provide more detail. SEPI
says it will select the offer that provides the greatest
stability for the airline and the best financial improvements.



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

ALPARGATAS: Sells Fishing Company To Shore Up Finances
------------------------------------------------------
The textiles company Alpargatas concluded the sale of its fishing
company Alpesca to the South African company I&J (Irvine &
Johnson) in a transaction valued at US$50 million, La Nacion
revealed Saturday in a report. The recent move is expected to
boost the company's financial situation, however, it wouldn't be
sufficient to invest in the reopening of its trainer and textile
factories. The group, according to reports, was forced to use the
proceeds of the sale to reduce its debt. Alpesca was used as a
guarantee for a credit line of US$35 million extended by Banco
Nacion to Alpargatas last year.


ELETROPAULO/CELESC: Likely To Struggle In Rolling Over Debts
------------------------------------------------------------
Electricity distributor Eletropaulo Metropolitana Eletricidade de
Sao Paulo (Eletropaulo) is one of the Brazilian private
companies, which will have to face difficulties in rolling over
debts and raising money in the international market in the second
half of this year, Gazeta Mercantil reported Monday. According to
specialists, foreign investors are more interested in short term
paper. Eletropaulo has struggled to raise US$120 million Euro CP.
The company predicts to raising another US$350 million to roll
over its current debts and to finance new projects.

Similar troubles face Centrais Eletricas de Santa Catarina
(Celesc), which expects to conclude the renegotiation of US$61.2
million in debts in Euro commercial paper that was due in July
2001. According to a previous TCR-LA story, the sum will be paid
in 48 installments of US$1.275 million each and is guaranteed by
20.67 percent growth on charge rate authorized by Agencia
Nacional de Energia Eletrica (Aneel).


EXCEL: Former Pres. Sues Banco Central, BBV; Demands Reparations
----------------------------------------------------------------
Ezequiel Nasser, the former president of Excel, the Brazilian
bank which was sold in 1998, initiated legal proceedings against
Banco Central and Banco Bilbao Viscaya (BBV), South American
Business Information reported Aug. 9. The suit demands, among
other things, reparations for material and moral damages.

According to Nasser, Banco Central pressured him to sell Excel
bank or face immediate liquidation. Nasser says, at that time the
bank had sufficient equity, though not as much as stated in the
bank's financial reports. The bank was sold to BBV for the
symbolic amount of R$1.

He also questions the accounting procedures used in the
evaluation of the bank's resources. Excel continues to be the
subject of fraud investigations related to the operations of its
agency in the Bahamas.


GLOBO CABO: 2Q01 Results; Net Revenue Down 11%, EBITDA Down 19%
---------------------------------------------------------------
In a press release, Globo Cabo S.A. (Nasdaq: GLCBY) (Bovespa:
PLIM4 and PLIM3; Latibex: XGLCP), the largest Pay-TV multi-
service operator in Latin America, provider of bi-directional
broadband Internet access and multimedia and data communication
services for corporate networks, announced Tuesday its earnings
for the second quarter of 2001 (2Q01). The following financial
summary, except where otherwise indicated, is presented in U.S.
GAAP and on consolidated basis.

    * Net Revenues this quarter were US$ 124.2 million, an 11.0%
decrease in relation to 1Q01.  In Brazilian GAAP terms, ARPU rose
1.2% to R$ 68.73 in 2Q01, compared to R$ 67.90 of 1Q01.  In the
first half of 2001, net revenues reached US$ 263.8 million, a
4.6% decrease over the first half of 2000 (in Brazilian GAAP,
1H01 net revenues was R$ 563.3 million, a 14.3% increase compared
to 1H00 - R$ 492.8 million).

    * EBITDA was US$ 27.5 million, 19.7% lower than 1Q01 (US$
34.3 million) primarily due to the Real devaluation combined with
higher SG&A.  In the first half of 2001, EBITDA was US$ 61.8
million, a 10.0% increase compared to the same period of 2000 (in
Brazilian GAAP, EBITDA increased by 20.3% to R$ 129.2 million in
1H01 compared to R$ 107.4 million in the same period of 2000).

    * Net Debt was reduced by 6.7% compared to 1Q01, from US$
687.8 million to US$641.4 million, despite the 6.6% depreciation
of the Real in relation to the US dollar over the period, as a
consequence of the amortization of debt, such as Senior Notes and
IFC.

    * Net loss in 2Q01 totaled US$ 91.2 million, -US$0.3 per ADR,
a reduction of 18.8% compared to the 1st quarter (US$ 112.3
million).  This improvement is due to net financial result, which
totaled US$ 57.8 million compared to US$ 80.2 million in the
previous quarter, representing a 27.9% reduction.


LOJAS ARAPUA: Pending Court Rulings, Future Still Unclear
---------------------------------------------------------
The Sao Paulo Court of Justice is now studying whether the
Brazilian retail chain Lojas Arapua should be declared bankrupt
because of its failure to pay the two portions of the bankruptcy
settlement, Gazeta Mercantil reported Tuesday. The company is
operating under court ordered protective reorganization which
began in 1998.

Justice Egas Galbiotti, who serves as reporter of the
proceedings, disagreed with the April 2000 ruling of Judge
Claudia Longobardi of the Sao Paulo 6th Court of Civil
Jurisdiction, that threatened the retail chain with bankruptcy if
the first portion of the reorganization settlement was not paid.
Two other justices of the 8th TJ Chamber of Private Law are to
hand down their rulings on the Arapua proceedings next Monday.


VARIG: 1H01 Net Loss Widens To R$509M
-------------------------------------
Due to its high debt, the depreciation of the real and high fuel
prices, Varig saw its first half net losses widened to R$509.18
million from the previous year's R$24.5 million, AFX-Europe
reported Tuesday. The company's debt amounted to US$1.3 billion
at the end of May, of which 85 percent is linked to the dollar.

The airline saw a 5-percent drop in ticket sales for
international flights in the first half from a year earlier due
also to the depreciation of the real.

Varig said it would release a full first-half earnings report
before the end of the week.


VARIG: Creates $50M Venture With 5 Other Companies
--------------------------------------------------
Varig (Viacao Aerea Riograndense SA), Brazil's largest airline,
has established a joint venture with Globo Cabo, United Airlines,
Lufthansa, Hilton International Worldwide and MasterCard to sell
and distribute travel services, Bloomberg reported Tuesday. The
transaction valued at $50 million, will see the creation of two
companies, Varig Virtual and X-Virtual. Varig said it would hold
55 percent of the venture and predicted a sales increase of 200
million reais ($79.5 million) in the first year of operation.
Sales via the two companies should reach $3.4 billion reais ($1.4
billion) in five years, the airline added.

"In the short term sales from these companies will not have a
great impact in Varig's results, but it's a new way of selling
products that should help to gain more clients," said Manuel
Guedes, Varig's investor relations' director.

The two new companies will provide information about hotels,
places to visit, tickets and other services and how to purchase
them over the Internet and television. According to Ozires Silva,
Varig's chief executive, the two companies would likely start
operations by October.



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

PAZ DEL RIO: Gains Creditor, Shareholder Support For Restructure
----------------------------------------------------------------
Colombian steel group Acerias Paz del Rio, which is in need of
110 billion pesos for its industrial reconversion, has gained the
support of its creditors as it embarks on an effort to find a way
out of its financial crunch, South American Business Information
reported last week. The company also has the support of its
shareholders. During its recent meeting, shareholders allowed the
company to continue operating to find a way out of its
difficulties believing that it has future possibilities,
especially if it can convince the government to lend a hand. Part
of the problem is that Acerias owes pension monies and also owes
money to government social security offices.

The firm is currently operating under Ley 550, a Colombian
regulation allowing indebted firms to seek out debt restructuring
deals, but the end of the time period for doing so is rapidly
approaching.


SEVEN SEAS: 2Q01 Results; Pipeline Completion Widens Losses
-----------------------------------------------------------
Seven Seas Petroleum Inc. (Amex: SEV) announced Tuesday results
for the three months and six months ended June 30, 2001. For the
second quarter of 2001, the Company reported a net loss of $2.1
million or $0.06 per share, as compared with a net loss of $1.5
million or $0.04 per share in the second quarter of 2000. For the
first six months of 2001, the Company reported a net loss of $2.1
million or $0.06 per share, as compared with a net loss of $4.3
million or $0.11 per share in the first six months of 2000.

Revenue from oil sales decreased $2.2 million in second quarter
2001 to $1.2 million from $3.4 million in first quarter 2001
principally a result of a net 53,200 barrel (32%) production
decline and a net 48,200 barrel inventory build-up. The
production decline was principally attributable to remedial well
workovers, individual well testing required by the Colombian
Ministry of Mines and Energy for field unification, and the
conversion from trucking operations to pipeline operations at the
end of the quarter. The inventory build-up was a result of
filling the Guaduas-La Dorada pipeline in late June 2001 and
inventory in transit or storage which will be reported as third
quarter sales.

During second quarter 2001, the Company completed construction of
the Guaduas-La Dorada pipeline and completed negotiations that
resulted in the consummation of a $45 million financing required
for its 2001-2002 business plan. The Company also drilled and
completed as a producer the first Guaduas Oil Field development
well and commenced operations for the second development well.

"Although revenues fell this quarter as we prepared for pipeline
production, we expect third quarter revenues to exceed our record
set in the first quarter of the year," stated Robert A. Hefner
III, Chairman and Chief Executive Officer of Seven Seas. "The
Guaduas Oil Field is currently producing approximately 7,000
barrels per day and is expected to increase as more development
wells are drilled," concluded Mr. Hefner.

Seven Seas Petroleum Inc. is an independent oil and gas
exploration and production company operating in Colombia, South
America. The Company's primary emphasis is on further
exploration, development and production of the Guaduas Oil Field,
located in Colombia's prolific Magdalena Basin.



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D O M I N I C A
===============

DOMINICANA AIRLINES: Only 4 Companies Remain In Bidding
-------------------------------------------------------
The race for the bankrupt state airline Dominicana Airlines is
now down to only four companies, according to a report Tuesday in
the Caribbean Week. Out of 11 companies that initially showed an
interest in the tender for Dominicana Airlines, four have chosen
to continue participating in the process. The remaining firms are
Aerospace Finance Ltd. - represented by Victor Gomez Berges;
Consorcio Dominicana 2001 (Aeropostal, Alas de Venezuela)-
represented by Jose Mustafa; Orsen Trading S.A. - represented by
Fermin I. Tavarez; and The Kingsford Corporation - represented by
Rey Antonio Nœ ez Cabral.

According to the Commission for the Reform of State Enterprise
(CREP), the choice of a company to privatize the state airline
will be announced on the 19th of September.



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E C U A D O R
=============

FILANBANCO: Audit Results To Be Released October After Delay
------------------------------------------------------------
The results of the audit being conducted by
PricewaterhouseCoopers into Filanbanco's portfolio won't be
released until October, Bloomberg reported Tuesday. Results were
supposed to have been released Monday but were delayed after
employees barred access to the bank's records. Employees are
expected to allow auditors access to data once they receive their
severance pay.

Ecuador closed Filanbanco, the country's largest bank with $1.2
billion in assets, after its operations became unsustainable due
to growing losses and overdue loans. The bank, founded in 1908,
was taken over by the government in 1998 to avert its collapse in
the wake of a severe financial crisis.


FILANBANCO: Government Moves To Restore Faith In Banking System
---------------------------------------------------------------
In a move to wind up the bank and restore faith in the nation's
banking system, Ecuador's four largest banks agreed to pay out up
to $96 million in deposits to former Filanbanco SA customers,
Bloomberg reported Tuesday. Banco del Pichincha SA, Produbanco
SA, Banco de Guayaquil SA and Banco Bolivariano SA said they
would reimburse depositors who held $301 to $10,000 in Filanbanco
accounts.

The government is reimbursing depositors with less than $300
while the banks are receiving Finance Ministry bonds and revenue
from Filanbanco's credit card operations to cover funds in the
accounts.


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

ATLANTICO: Bital Continues To Struggle For Its Acquisition
----------------------------------------------------------
Mexican financial institution Grupo Financiero Bital, which
agreed to buy Banco del Atlantico from the country's bank bailout
agency IPAB three years ago, still continues to struggle over the
failed bank's acquisition, Mexican financial daily El Economista
reported Tuesday. Atalantico has been under the administration of
Bital since 1998 while negotiations over the purchase continue.
However, Bital and IPAB have been "refining details" for over six
months. Everything now, according to analysts, depends on the
results of an audit ordered by IPAB into Bital's administration
of Atlantico.


GRUPO MEXICO: To Restructure US$500M Debt Shortly
-------------------------------------------------
Grupo Mexico, the world's third leading copper producer, is
expected to refinance US$500 million of its debt soon, which at
the end of June 2001, totaled US$2.615 billion, Mexican financial
daily El Economista said Monday in a report. Subsequently, the
company will restructure another US$100 million, according to
Afin Securities.


GRUPO TMM: Serrano/Segovia Insiders Buying Shares At Lows
---------------------------------------------------------
Transportacion Maritima Mexicana, S.A. de C.V. (NYSE: TMM,
TMM/A), the largest Latin American multi-modal transportation and
logistics company and owner of the controlling interest in
Mexico's busiest railway, TFM, announced that the Serrano/Segovia
families have purchased in excess of 500,000 of the company's
ADR's (American Depository Receipts) and "A" shares.

Javier Segovia, president of TMM, noted: "Over the past few
weeks, TMM shares have traded lower on heavy volume. TMM's
financial prospects remain strong, and the recent market activity
is not reflective of a change in our outlook. Accordingly, the
Serrano/Segovia families have purchased in excess of 500,000 of
the company's ADR's (American Depository Receipts) and "A"
shares."


QUADRUM: Talking To Potential Partners; Intervention Unneeded
-------------------------------------------------------------
Ernesto Rodriguez, investor relations director at Quadrum,
revealed that the Mexican bank is now in talks with several
potential buyers or partners in order to obtain additional
capital for its ambitious plans in the low-income mortgage
segment, Business News Americas reported Tuesday. Quadrum is in
talks with banks and local investors and is open to selling out
or teaming up, depending on the price-factor, Rodriguez said.
Non-banking investors are interested in Quadrum because it is
very difficult to obtain a banking license in Mexico today, he
added.

Meanwhile, Rodriguez countered recent comments of analyst Mario
Di Constanzo, a local financial consultant and advisor to the
former ruling PRI party, that Quadrum had capital problems and
should be intervened. According to Rodriguez, the analyst's
comments were exaggerated, because the bank meets the minimum
internationally accepted Basle index of 8 percent. However, it
lacks capital to enter the low-income mortgage segment and is
therefore looking for buyers or partners.


SECURITY PLASTICS: Liquidating Latin American Plants Under Ch 7
---------------------------------------------------------------
Custom injection molder Security Plastics Inc. filed with the
Miami court on August 7 protection under Chapter 11 of the U.S.
Bankruptcy Code, Plastics News revealed Monday in a report. The
company, which is owned by President Norman Cohan, specializes in
small parts made with its Hetero-Cavity molding technology,
which relies on small, quick-change tools in standard mold bases.
The company employed about 890 and had molding sales of $70
million last year, down from $72 million in 1999.

Security's North American operations include 173 presses in four
plants in Miami Lakes; McAllen, Texas; Rio Grande, Puerto Rico;
and Chihuahua, Mexico.



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P E R U
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AERO CONTINENTE: Lima To Santiago Flights To Resume Soon
--------------------------------------------------------
Peruvian Aero Continente's flights between Lima (Peru) and
Santiago (Chile), which had been hindered on July 18, 2001, will
return to normal operations, Gestion reported Friday. Chilean
authorities have not forbidden flights coming from Lima, and the
airline has been authorized to land in Chile. Peruvian
authorities, on the other hand, were concerned about the fact
that the reciprocity agreement between the two countries could
have been ignored by Chilean authorities.




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 and Edem
Psamathe P. Alfeche, 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
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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.


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