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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 24, 2001, Vol. 2, Issue 166

                           Headlines


A R G E N T I N A

IMPSAT: Sees Decline In Customer Collections In 2Q01


B O L I V I A

COTEL: Inalco To Take Charge


B R A Z I L

BANESPA: Back In The Black, Moody's Upgrades With Stable Outlook
CVRD: To Unwind Accounting Activities
TELEMAR: Reports Preliminary 7-Mo. Results; Fundraising Plans
TRANSBRASIL: Dealing With Another Financial Blow
VARIG: Financial Troubles Worry Star Alliance
VARIG: Rio Sul Reports Red Ink Flowing During First Half Of 01


C O L O M B I A

AVIANCA/ACES: Government Kicks Out Industry Regulator


M E X I C O

AMERIJET INTERNATIONAL: Files For Chapter 11 Bankruptcy
E-M SOLUTIONS: Puts Two Plants On The Block
LTV CORP: Sells VP Buildings Unit to Grupo IMSA
QUADRUM: CNBV Intervenes In Bank, Subsidiaries


P A N A M A

PAFCO: Workers' Strike Enters Third Day; Negotiations Stalled
NIPPON YUSEN: Liquidates Panama Subsidiaries In Restructuring


U R U G U A Y

PLUNA: Varig Cooperatomg With Government For Solution


     - - - - - - - - - -


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

IMPSAT: Sees Decline In Customer Collections In 2Q01
----------------------------------------------------
Regional broadband services provider Impsat Fiber Networks
disclosed a drop in collections from customers during the second
quarter of this year, Business News Americas reported Monday.
According to company CFO Guillermo Jofre, the decline is largely
due to delayed payments by government agencies in the company's
key market, Argentina.  

"The macro-economic situation forced a number of our clients,
especially some government agencies in Argentina, to delay
payments," Jofre said.

Days outstanding widened from 71 days in the first quarter to 108
days at the end of the second quarter. Argentina generated 40
percent of the company's US$78.5 million second quarter revenues.
Government accounts represent 13 percent of total revenues from
Argentina.

"The uncertainty about payments from government contractors
could, directly or indirectly, cause our receivables to further
accumulate," Jofre said. The Argentina Government's "zero-
deficit" law could also aggravate collections, as government
agencies would only make payments equal to actual revenues
received by the government.

Meanwhile, Impsat must confront it's most urgent task --
restructuring a US$1-billion debt or finding additional equity
financing. As of June 30, the company only had US$144.5 million
available cash.



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B O L I V I A
=============

COTEL: Inalco To Take Charge
----------------------------
The intervention of Bolivia's telecoms regulator Sittel in La
Paz-based telecoms company Cotel was supposed to end August 20,
2001, but up to now, no decision as to which agency or
institution will take charge of the company has been made, La
Razon revealed in a report. According to government authorities,
the national cooperatives institute Inalco (Instituto Nacional de
Cooperativas) is likely to take over Cotel.

Sittel intervened Cotel in August 2000 after service was
jeopardized by a nine-day strike by employees protesting
corruption and staff cuts. Sittel began the search for an
administrator after an unsuccessful attempt to auction a 51-
percent stake of the telecoms company on February 7.



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

BANESPA: Back In The Black, Moody's Upgrades With Stable Outlook
----------------------------------------------------------------
Banco Banespa, the Brazilian bank, which Spanish bank Banco
Santander Central Hispano (BSCH) acquired in November 2000,
posted a profit of R$69.287 million in July of the current year,
O Globo reported Wednesday. The Sao Paulo state-based bank ended
the first seven months of the year with accumulated profits of
R$304.796 million.

In May, Moody's Investors Service upgraded Banespa's financial
strength rating to D from E, with a stable outlook. Moody's
stated that the upgrade reflected Banespa's profitability
prospects, which improved following BSCH's acquisition, which
should result in enhanced franchise value. The rating agency
pointed out that Banespa offers significant revenue growth
potential, after having gone through what might be considered by
some observers to have been a long "dormancy" period in the hands
of the federal government.


CVRD: To Unwind Accounting Activities
-------------------------------------
Cia. Vale do Rio Doce (CVRD), which recently struck a US$2-
billion contract with Baosteel, took one more step for the
approval of its privatization process with Cade (Conselho
Administrativo de Desfesa Economica). CEO Roger Agnelli, and
minister Mr Eliseo Padilha have signed an agreement for the
creation of virtual companies to unwind the accounting operations
of the railroads Vitoria-Minas, and Carajas from the remaining
business of the company.


TELEMAR: Reports Preliminary 7-Mo. Results; Fundraising Plans
-------------------------------------------------------------
Tele Norte Leste Participacoes SA (Telemar) posted preliminary
sales of 5.589 billion reals in seven months to July, AFX-Europe
reported Wednesday. Telemar announced investments during the
period reached 4.884 billion reals. The company managed to
install a total of 16.333 million lines and the number of lines
in use totaled 13.927 million for the period. According to the
company, provisions for doubtful accounts in the period remained
at high levels due mainly to retroactive effects, reaching 4.4
percent of gross sales. Telemar is optimistic it will be able to
raise 1.8 billion in funding this year, 1.3 billion of which will
come from the Brazilian Development Bank (BNDES) and 500 million
in finance from suppliers. The company expects to have gross
debts of 9.8 billion reals by the end of the year.


TRANSBRASIL: Dealing With Another Financial Blow
------------------------------------------------
Petrobras and Shell demanded that Brazilian air transportation
company Transbrasil deposit a R$4,000-check to their accounts in
order for them to continue supplying goods, Jornal do Commercio
said Wednesday. Meanwhile, airports manager Infraero also urged
Transbrasil to make weekly payments instead of monthly. The
recent demands from two oil giants and the airports manager are
increasing the financial squeeze on the carrier, which is already
facing a mountain of debts.


VARIG: Financial Troubles Worry Star Alliance
---------------------------------------------
Varig's financial woes have raised apprehensions from Star
Alliance, a strategic alliance of air transportation companies,
in which Varig is a part, according to a report Wednesday in
Gazeta Mercantil. Varig represents Star Alliance in the South
American market, and one of its main challenges is to reduce its
structure to improve performance. However, it can expect the
support of the 14 companies comprising Star as they are planning
to help the Brazilian carrier.

Recently Varig announced its net loss ballooned to 509.1 million
reais ($203.6 million) in the first half of the year, its biggest
six-month loss ever, due to soaring debt costs.

"It's the worst loss of Varig's history, it makes the situation
even more complicated for the company," said Carlos Antonio
Magalhaes, an analyst at Sirotsky & Associados consultancy. He
said the only exit for Varig is to get help in the form of a
foreign partner.


VARIG: Rio Sul Reports Red Ink Flowing During First Half Of 01
--------------------------------------------------------------
Brazilian regional airline Rio Sul Linhas Aereas posted a loss of
R$15.022 million during the first half of this year, reversing a
profit of R$12.213 million registered in the same year-ago
period, O Globo - Brazil reported Tuesday. The regional airline,
which belongs to Varig, Brazil's largest air transport group,
said that the negative result could be attributed to the
depreciation of Brazil's currency (30 per cent of the company's
costs are linked to the dollar) and rising fuel prices. It
recently cancelled a contract with Embraer for the acquisition of
15 aircrafts.



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

AVIANCA/ACES: Government Kicks Out Industry Regulator
-----------------------------------------------------
The Colombian government is now seeking a new arbitrator after it
removed industry regulator Emilio Jose Archila from ruling
whether Aerovias Nacionales de Colombia SA (Avianca) and
Aerolineas Centrales de Colombia (Aces) should merge, Bloomberg
reported Wednesday.

Both the carriers said that Archila is prejudiced to the merger
process after he rejected the companies' application to combine.
The regulator believes that the operation would create a
monopoly. In addition, the carriers criticized Archila for
discussing the matter in a public forum.

Valores Bavaria SA, Avianca's majority owner, is under increasing
pressure to turn the company around, analysts said. Avianca
posted losses of 187.5 billion pesos ($81.4 million) in the first
six months of the year and was blamed for second-quarter losses
of 82.1 billion pesos at Valores Bavaria.



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

AMERIJET INTERNATIONAL: Files For Chapter 11 Bankruptcy
-------------------------------------------------------
Cargo airline Amerijet International, which primarily serves the
Caribbean, Mexico and South America, filed for Chapter 11
bankruptcy protection, but said the filing will not affect its
operations, the Associated Press said in a report.

The privately-held corporation attributed the move to a loss in a
lucrative subcontract, which happened earlier this year when
Emery Worldwide lost its contract with the U.S. Postal Service.
The 27-year-old company dismissed 22 of its 397 employees last
week, but said it is not planning any more terminations.


E-M SOLUTIONS: Puts Two Plants On The Block
-------------------------------------------
Fremont, Calif.-based E-M-Solutions, which filed for Chapter 11
bankruptcy protection Aug. 2 in Oakland, Calif., is in talks
regarding the sale of two plants but will shut down a third if it
fails to attract a buyer, The Daily Deal reported Tuesday.
According to E-M spokeswoman Marlynh Rummler, Boston-based
Teradyne Inc. agreed to buy the balance of the bankrupt company's
assets in the U.S., Mexico and Northern Ireland for $85 million
under a stalking-horse agreement. Excluded in that agreement are
E-M plants in Longmont, Colo., Gretna, Va., and Monterrey,
Mexico.

"We are in active discussions to sell two of our last three
plants but no one has come forward thus far to buy our last plant
in Gretna, and we will shut that plant down if no buyer comes
forward," Rummler said.

She refuses to reveal the companies with which E-M was holding
talks about the plants, but Teradyne isn't one of them. According
to Susannah Humphries, a Teradyne spokesman, the company doesn't
have any intentions of acquiring any of those three plants
because they didn't mesh with its operations.

The tentative sale agreement with Teradyne includes plants in
Fremont, Calif.; Westbrook, Maine; Guadalajara, Mexico and
Lisburn, Northern Ireland. The agreement is subject to a court-
supervised auction.


LTV CORP: Sells VP Buildings Unit to Grupo IMSA
-----------------------------------------------
The LTV Corporation announced Tuesday that it has selected Grupo
IMSA SA de CV as the successful bidder for all of the assets of
VP Buildings, Inc. and certain related VP Buildings subsidiaries.

VP Buildings is the nation's second largest manufacturer of pre-
engineered steel buildings for low-rise commercial applications.
The company has eight plants in the United States that produce
metal buildings and components, and joint ventures in Brazil,
India and in Mexico with IMSA. Revenues for 2000 were
approximately $400 million. LTV employs about 2,300 people in the
United States.

The purchase price was $102 million plus the assumption of
certain liabilities.

"The sale of VP Buildings will provide LTV with additional
financial resources and is an important step in our restructuring
effort," said John D. Turner, executive vice president and chief
operating officer. Mr. Turner said that VP Buildings had grown
appreciably since being acquired by LTV in 1997 and that he
expected the company to continue its pattern of success under the
ownership of IMSA.

The LTV Corporation is currently operating under protection of
chapter 11 of the U.S. Bankruptcy Code. Completion of the sale is
subject to regulatory and bankruptcy court approvals. A hearing
on the transaction is scheduled in U.S. bankruptcy court on
August 29.

The LTV Corporation is a manufacturing company with interests in
steel and metal fabrication. LTV's Integrated Steel segment is a
leading producer of high-quality, value-added flat rolled steel,
and a major supplier to the transportation, appliance, electrical
equipment and service center industries. LTV's Metal Fabrication
segment consists of LTV Copperweld, the largest producer of
tubular and bimetallic products in North America.


QUADRUM: CNBV Intervenes In Bank, Subsidiaries
----------------------------------------------
The National Banking and Exchange Commission (CNBV) intervened in
Banca Quadrum de Mexico and its subsidiaries after uncovering
serious problems during routine audits, EFE reported Wednesday.
According to the CNBV, Quadrum failed to report any non-
performing assets, had no loan-loss provisions and its income
statement did not fully report losses.

"The magnitude of its decline puts this bank in a situation of
clear asset and operational weakness that affect its stability
and liquidity," the government agency said. However, it noted
that deposits were protected by federal deposit insurance
guarantees.

Democratic Revolution Party legislative aide Mario Di Costanzo
revealed in statements to the media that Banca Quadrum suffered
some $66 million in losses and said the bank should not be
refinanced, but rather liquidated to prevent the same mistakes
made by the administration of former President Ernesto Zedillo,
who attempted to bail out failed banks.

Banca Quadrum, which was founded in 1994, has 3.59 billion pesos
(some $398 million) in assets. The bank's subsidiaries, which are
also under intervention, are Factor Quadrum and Arrendadora
Financiera Quadrum.



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P A N A M A
===========

PAFCO: Workers' Strike Enters Third Day; Negotiations Stalled
-------------------------------------------------------------
Negotiations between Panama-based Puerto Armuelles Fruit Company
(Pafco) and its 3,200 employees over the status of three
plantations, known as "Mega 4," which the company closed in June
due to inefficient production, are now at an impasse, EFE
reported Wednesday.

Three days have passed since workers lodged a strike against
Chiquita Brands subsidiary Pafco but the company and the workers'
union have not been able to reach an accord. According to the
labor union's secretary general, Edgard Williams, talks
deadlocked when the banana company refused to re-open Mega 4.

Cameron Forsythe, Pafco's general manager in Panama, said that
his company could bridge the conflict by subletting the Mega 4
lands to the Atlantic Banana Cooperative (Cobana).

In a letter to Panamanian President Mireya Moscoso, Chiquita
Brands President Steven Warshaw revealed that Pafco has been
unable to compete for several years because of the union's
refusal to increase the harvest and improve the protection and
packaging of the fruit. The president also warned that a
prolonged strike could force the company to "restructure."


NIPPON YUSEN: Liquidates Panama Subsidiaries In Restructuring
-------------------------------------------------------------
Nippon Yusen K.K., Japan's largest shipping firm, which is
currently undergoing a restructuring, liquidated two of its
wholly-owned Panama-based subsidiaries, reported The Japan Times
Online Wednesday. Accordingly, Growth Maritima SA and Fairhope
Shipping SA were disbanded in line with a decision adopted at a
Nippon Yusen board meeting June 22.

Nippon Yusen disclosed that both the subsidiaries were set up as
shipping and cargo vessel rental firms, with capitalization of
$1,000 each. However, since 1999, they have sold off their
vessels and undertaken procedures to liquidate themselves. Nippon
Yusen said it set aside loan-loss reserves against losses from
the liquidation in the year ended March 31.

Growth Maritima and Fairhope Shipping were created in April 1988
and in Sept. 1989, respectively, in Panama City.


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

PLUNA: Varig Cooperatomg With Government For Solution
-----------------------------------------------------
Both Brazilian airline Varig and the Uruguayan government are now
searching for alternatives to resolve Uruguayan transportation
company Pluna's grave financial situation, Gazeta Mercantil
reported Tuesday. Pluna reportedly has debts of US$52 million and
has accumulated losses of US$10 million between July 2000 and
June 2001. Pluna's financial hardships are seen negatively
affecting the financial performance of Varig, which has a 49-
percent stake in the Uruguayan carrier. The Uruguayan government
also controls 49 percent of the airline.




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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