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       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, August 17, 2001, Vol. 2, Issue 161

                           Headlines



B R A Z I L

CESP: Weaker Real Leads To 94% Increase In 2Q Loss
ELETROPAULO: Net Income Rises As Revenue Increases
EMBRATEL: Seeks Fixed-Line Licenses To Operate In Major Cities
LOJAS AMERICANAS: To Conclude Three Year Restructuring Process
TELEMAR: To Sell Off Underperforming Subsisdiary Connect
TELEMAR: To Delay Commencement Of SMP Operations Until March 2002
TRANSBRASIL: Files Suit Against GE On Tuesday


M E X I C O

ATLANTICO: Bital's Infusion Hinges On Atlantico Agreement
MAXCOM: Pegaso, PanAmSat Refute Satellite Arguments
STEWART ENTERPRISES: Sells Mexican Operations To Reduce Debts
VITRO: Signs $235 Million Securitized Credit Facility


P E R U

AERO PERU: Supreme Court Yet To Decide On Liquidation
CONSORCIO TRANSMANTARO: To Raise US$30M Via Bond Issue
PESQUERA CAROLINA: 80% Of Creditors Approve Restructuring Plan


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

CESP: Weaker Real Leads To 94% Increase In 2Q Loss
--------------------------------------------------
Brazilian power generator Cia. Energetica de Sao Paulo informed
the stock exchange that losses in the second quarter jumped 94
percent, to 278.6 million reais ($112 million), or about 2.97
reais per 1,000 shares, from 143.5 million reais, or about 1.53
reais per 1,000 shares, in the previous year, Bloomberg reported
Wednesday. The company blamed the increase in losses during the
period on a weaker currency. The real weakened 6.8 percent in the
quarter, increasing the cost of servicing the utility's $5-
billion debt, analysts said.


ELETROPAULO: Net Income Rises As Revenue Increases
--------------------------------------------------
Eletropaulo Metropolitana SA, Brazil's No. 1 electricity
distributor, announced net income in the second-quarter rose 17
percent to 86.2 million reais ($37.3 million), or 2.06 reais per
thousand shares, from 73.8 million reais, or 1.76 reais per
thousand shares in the same period a year earlier, Bloomberg
reported Wednesday. The utility also posted a 26-percent increase
in revenue to 1.39 billion reais from 1.1 billion reais recorded
in the same period in the previous year. Revenue from sales of
extra energy that it received from generators in the wholesale
market came as a consequence of Brazil's program to cut power
consumption.

A previous report in the TCR-LA stated that specialists see
Eletropaulo as one of the Brazilian private companies likely to
face difficulties in rolling over debts and raising money in the
international market in the second half of this year since
foreign investors are more interested in short term paper.
Eletropaulo has struggled to raise US$120 million Euro CP. The
company predicts raising another US$350 million to roll over its
current debts and to finance new projects.


EMBRATEL: Seeks Fixed-Line Licenses To Operate In Major Cities
----------------------------------------------------------------
In a bid to operate fixed-line services in a number of major
cities including Sao Paulo, Rio de Janeiro, Brasilia, Belo
Horizonte, Porto Alegre, Curitiba, Recife, Fortaleza and
Salvador, Embratel Participacoes SA is now seeking licenses in
order to operate services in these locations, AFX Europe reported
Wednesday. Company executive Roberto Duraes noted though that
Embratel already has a license to operate throughout the country.

Earlier this month, Embratel said it plans to complete the
introduction of a Universal Service within its concession by the
end of this year. Under decree 2,592 of 1998, operators are
required to introduce a Universal Service within their concession
area by 2003.


LOJAS AMERICANAS: To Conclude Three Year Restructuring Process
--------------------------------------------------------------
The Brazilian retail chain Lojas Americanas is expected to
conclude a three-year restructuring process, according to a
report Monday on Gazeta Mercantil. Mr. Claudio Galeazzi, the new
chairman, who was hired in 1998 by GP Investimentos, Americanas'
controller, changed internal processes, implemented a control
system and centralized the logistics operations.

Americanas is currently headed by Mr. Miguel Gutierrez. Despite
the 50-percent drop in its net profit in the second quarter of
2001, gross margin, operating expenses and inventories have
managed to produce a positive result. Credit Suisse First Boston
recently changed Americanas rating from "hold" to a trading buy.

Lojas Americanas, which ended year 2000 with negative financial
results of R$47 million, is a chain of over 87 discount
department stores distributed across Brazil. The company provides
customers with an ample selection of merchandise such as,
household appliances and soft furnishing items, clothing and
other related items.


TELEMAR: To Sell Off Underperforming Subsisdiary Connect
--------------------------------------------------------
Telemar intends to put on sale next year its subsidiary Connect,
which was created this year to provide installation and
maintenance services in Rio de Janeiro, according to a report
Wednesday in Gazeta Mercantil. Connect, which employs 7,000
workers, was widely believed to have caused the reduction on
Telemar's net profit and EBITDA in this year's second quarter.

After reaching 16 million in installed telephone lines, Telemar
also plans to conclude by the end of this year other corporate
goals in the 16 states where it operates.


TELEMAR: To Delay Commencement Of SMP Operations Until March 2002
-----------------------------------------------------------------
Brazil's Telecoms carrier decided to delay the start of the SMP
operations until March next year instead of January 2002 as was
originally planned, Jornal do Brasil reported Wednesday. The
delay stems from a 90- to 120-day timeframe in which Anatel
(Agencia Nacional de Telecomunicacoes) will evaluate the
certificate of concession which gives Telemar the right to expand
its coverage area.


TRANSBRASIL: Files Suit Against GE On Tuesday
---------------------------------------------
Transbrasil S.A. Linhas Aereas filed a suit on Tuesday at the
Central Forum in Sao Paulo against General Electric Capital Corp.
(GE) for causing losses and damages to the company, Gazeta
Mercantil Online reported Wednesday. The company is requesting
the court to arbitrate an indemnification for damages stemming
from GE's request to order the bankruptcy of Transbrasi, informed
Gianfrancesco Genoso, the aviation company's attorney. GE had
alleged an unpaid debt of the company as grounds for declaring it
bankrupt. Transbrasil's lawyer said that the material and moral
damages stemming from such irresponsibility are immense and still
continue to have repercussions.

GE's request has already been ruled unfounded.



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

ATLANTICO: Bital's Infusion Hinges On Atlantico Agreement
---------------------------------------------------------
The controlling shareholders of Mexico's Grupo Financiero Bital
are ready to make the $100 million capital injection into the
bank, Mexican financial daily El Economista reported Wednesday.
However, the infusion will come only when a concrete agreement is
reached with bank bailout agency IPAB to allow the final
acquisition of Banco del Atlantico.

In addition, close to $200 million in investment could also come
from one of several international investors interested in the
Mexican banking industry. The conventional assumption is that the
Banco del Atlantico issue will be resolved, according to Bital
head Jaime Ruiz Sacristan. Bital has had talks with General
Electric's GE Capital, ING and an international fund manager.

Bital has suffered from its inability to secure a merger with
Atlantico over the last 3 years. The company needs no less than
$300 million in fresh capitalization. Its stock market value is
down to 2.935 billion pesos compared to its book value of 7.350
billion pesos. Analysts of the sector have little doubt over
Bital administration but plenty of questions about debt-ridden
Atlantico.


MAXCOM: Pegaso, PanAmSat Refute Satellite Arguments
---------------------------------------------------
Maxcom's reasons for rejecting the opening of the Mexican
satellite industry to foreign players have been rebutted by
Pegaso Communicaciones and PanAmSat, partners in Controladora
Satelital de Mexico, reported Mexico City daily Reforma.

"Their complaints are because they're bothered by having
unexpected competition, but we think they've exhausted their
arguments," said Gomez Ortigoza, head of Pegaso Communcaciones.


STEWART ENTERPRISES: Sells Mexican Operations To Reduce Debts
-------------------------------------------------------------
In a company press release, Stewart Enterprises, Inc. (Nasdaq
NMS:STEI) announced Wednesday that it has completed the sale of
its Mexican operations. The proceeds from the sale were
approximately US$ 72 million. The proceeds, net of transaction
expenses, and cash on hand will be used to retire the $75 million
asset sale term loan the Company entered into in its debt
refinancing on June 29, 2001. The Company's debt outstanding
after the asset sale term loan is retired will be $776 million.
The revenues, operating earnings and EBITDA of the Mexican
operations in fiscal year 2000 presented on a pro forma basis for
SAB 101 were $22.8 million, $10.1 million and $12.7 million,
respectively.

William E. Rowe, President and Chief Executive Officer, stated,
"On June 29, 2001, we announced that we had completed our plan to
refinance substantially all of our long-term debt. Today, we are
very pleased to announce additional progress in our Company's
deleveraging strategy of reducing our overall debt over the next
two to three years to approximately $500 million and our debt to
EBITDA ratio to about a 2.5 multiple. We expect this to be the
first of several announcements of debt reduction as we proceed
with our plans to sell our foreign operations."

Mr. Rowe continued, "We want to thank all of our employees in
Mexico for their hard work and dedication. We are confident that
Jardines del Tiempo, S.A. de C.V., the largest death care
provider in Mexico, will continue to provide the same high level
of service and value to the families in Mexico that we have been
privileged to serve."

Founded in 1910, Stewart Enterprises is the third largest
provider of products and services in the death care industry in
the United States, currently owning and operating 606 funeral
homes and 161 cemeteries in North America, South America, Europe
and the Pacific Rim.


VITRO: Signs $235 Million Securitized Credit Facility
-----------------------------------------------------
After several weeks of negotiations, Vitro, S.A. de C.V. (NYSE:
VTO and BMV: VITRO A), through its subsidiary Compania Vidriera,
S.A. de C.V., as borrower, executed Tuesday a credit facility
providing for new financing in an aggregate principal amount
equal to US$235 million.

The facility was lead by HSBC and Citibank, and included as
participants Banco Nacional de Comercio Exterior, ABN AMRO, Bank
of Montreal, Banamex, Banca Nazionale de Lavoro, JPMorgan-Chase
and Credit Suisse First Boston and exceeded initial subscription
efforts that aimed at US$200,000,000.

The loan matures in five years and has an average life of two and
one-half years. Vitro will be paying a decreasing rate of
interest, which will start at Libor plus 225 basis points, that
the company considers advantageous taking into account current
market conditions.

Vitro will use the proceeds of the facility to refinance short-
term holding company debt and debt of its containers division.

The facility is part of several measures being taken by the
company's management to reduce its cost of funding, extend the
tenor of its indebtedness and improving its liability profile. It
reflects the confidence that a core group of lenders are placing
on Vitro and its management.



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P E R U
=======

AERO PERU: Supreme Court Yet To Decide On Liquidation
-----------------------------------------------------
Aero Peru airlines, which had its insolvency proceedings started
more than 2 years ago, awaits the decision of the Peruvian
Supreme Court on whether or not it will decide to liquidate the
airline, El Comercio reported Monday. Should the Supreme Court
decide not to liquidate the airline, it will continue being
managed by its workforce. Top Consulting is conducting the
airline's liquidation and is against a possible restructuring
since debt payment would be at risk.

Aero Peru owns equity in the Cita foundation worth US$5 million.
This may be used to pay part of labor debts - the remainder would
be paid through the sale of land near the airport.


CONSORCIO TRANSMANTARO: To Raise US$30M Via Bond Issue
------------------------------------------------------
Peru's Consorcio Transmantaro consortium plans to raise US$30
million through a bond issue probably at the end of this month or
early next month, Gestion reported Monday. The funds will be used
to refinance current and non-current liabilities,.

Aside from the planned bond issue, the consortium is also
considering taking out a loan from the same banks (Citibank,
Banco de Credito, Banco Continental and Banco Wiese Sudameris)
that financed the construction of the power transmission line,
which it operates between Mantaro and Socabaya and which had
demanded investments of US$95 million.

Consorcio Transmantaro is teamed by Hydro Quebec (56.7%), Fonds
de Solidarite des Travailleurs du Quebec (28.3%) and Etecen
(15%).


PESQUERA CAROLINA: 80% Of Creditors Approve Restructuring Plan
--------------------------------------------------------------
More than 80 percent of the creditors of Peruvian fishing company
Pesquera Carolina have agreed to the company's restructuring
plan, South American Business Information reported August 10,
2001. The plan will see the company paying debts of US$51.2
million over a 12-year term beginning October. The company will
operate using 4 ships with an overall capacity of 1,573 tons.
Additionally, it will also operate 2 fishmeal producing plants
situated in Coischo and Huarmey.

Pesquera expects to generate annual sales of US$21 million in the
first 4 years, US$15 million in the first year subsequent to that
period, US$22.3 million between 2005 and 2009, US$14.22 million
in 2010, and US$21 million in 2011. The minimum fishmeal and oils
production is projected to range from 29 to 6,000 tons, while the
maximum production will total 14,000 tons and 50,000 tons.

   


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.

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