TCRLA_Public/010827.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, August 27, 2001, Vol. 2, Issue 167

                           Headlines



A R G E N T I N A

IMPSAT: Morgan Stanley To Take Charge, Search For Partner
MULTICANAL: To Sell $144M Two-Year Notes To Fulfill Obligations


B R A Z I L

ARAPUA: Decision On Bankruptcy Imminent
TRANSBRASIL/VARIG/VASP: Management Negotiating With Government
VITECH AMERICA: Company Profile


C O L O M B I A

AVIANCA: Regulator Quits After Being Removed From Airline Ruling



M E X I C O

GRUPO ALFA: Continues To Reconfigure Business Portfolio
GRUPO DESC: Maintains $100M Investment Objective
LUZ Y FUERZA: Wants 22B-Peso Subsidy For 2002
LTV: VP Buildings To Gain Higher Ground Upon Acquisition
QUADRUM: CNBV Intervention Won't Intrude On Elektra Alliance
QUADRUM: Sought IPAB Help Earlier This Year To No Avail
QUADRUM: Shareholders To Determine Bank's Future At Meeting
QUADRUM: IPAB Backs Savings, Clients' Deposits


P A N A M A

PAFCO: Panamanian VP Calls For Immediate Solution To Strike


     - - - - - - - - - - -


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

IMPSAT: Morgan Stanley To Take Charge, Search For Partner
---------------------------------------------------------
Morgan Stanley Dean Witter & Co. will take over the financial
management of Impsat Fiber Networks Inc., the company in which it
holds a 16 percent stake, until it finds a partner, Bloomberg
reported Thursday. Morgan Stanley's focus on Impsat, which
provides telecommunications networks and Internet services in
Latin America and is controlled by the Pescarmona group, will be
to guide the company through the restructuring of its debts.
Impsat reportedly has about $1 billion in debt, of which $75
million comes due within a year.

In the midst of building a South American fiber-optic network,
Impsat lost one of its most important clients, 360networks Inc.,
in June after the Canadian company filed for bankruptcy
protection amid the global decline in financing for
telecommunications companies.


MULTICANAL: To Sell $144M Two-Year Notes To Fulfill Obligations
---------------------------------------------------------------
Buenos Aires-based company Multicanal SA, which reported a loss
for each of the past four years, announced plans to sell $144
million of two-year notes, Bloomberg said Thursday. The financing
comes just a week before $164 of debt comes due. The second
second-largest cable television company also informed the Buenos
Aires Stock Exchange it called a shareholders' meeting on
Thursday to discuss matters regarding the sale of a 4-percent
stake in satellite television company DirectTV Latin America LLC.

Multicanal recently agreed with seven banks to extend talks until
Aug. 30 over $164 million in two bonds coming due. The debt's
original payment date was last Tuesday. Included in the
negotiations are Credit Suisse First Boston, Citigroup Inc.'s
Citibank, FleetBoston Financial Corp.'s Bank of Boston, Toronto-
Dominion Bank, Credit Lyonnais, Deutsche Bank AG, and state-owned
Banco de la Nacion, according to ING Barings analyst Christopher
Taylor. The company wouldn't confirm which banks hold its debt.



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

ARAPUA: Decision On Bankruptcy Imminent
---------------------------------------
A final decision about bankruptcy protection for Brazilian retain
chain Arapua will be announced late this month, Valor Economico
reported Tuesday. The company, which entered into an agreement
with its creditors in 1998, had an involuntary petition for
bankruptcy proceedings filed against it by Evadin in relation to
an R$82-million debt. Arapua registered R$13.9 million in net
loss between April and June this year, closing seven of its 162
stores during that period.


TRANSBRASIL/VARIG/VASP: Management Negotiating With Government
--------------------------------------------------------------
Representatives of Varig, Vasp, Transbrasil, TAM and Gol are
expected to meet with the Brazilian government Friday in order to
discuss how to strengthen the airline sector's activities in the
country, O Globo - Brazil reported Thursday. The airline
companies are expected to present proposals to be studied by the
Brazilian civil aviation council Conac. Discussions will be aimed
at helping the companies provide their services in a competitive
and profitable way, according to a Defense Ministry source. These
measures will not involve public funding, the source related.


VITECH AMERICA: Company Profile
-------------------------------
NAME:    Vitech America, Inc.
         2190 Northwest 89th Place
         Miami, FL 33172-2427

TELEPHONE: (305) 477-1161

FAX: (305) 477-1379

OTHER FACILITIES:  Ilh‚us, Bahia, Brazil
                   Sao Paulo, SP Brazil

WEBSITE: http://www.vitech.net

TYPE OF BUSINESS: Vitech America, Inc. is a manufacturer and
                  marketer of computer products, peripherals and
                  software to business, governmental and
                  individual clients in Brazil. The Company's
                  diversified family of products includes desktop
                  personal computers, notebook personal
                  computers, workstations, network servers,
                  networking equipment, peripherals and software.

SIC: ELECTRONIC COMPUTERS [3571]

EMPLOYEES: 650

TOTAL ASSETS: US$135 million (quarter ended March 2001)

TOTAL LIABILITIES: US$91 million (quarter ended March 2001)

REVENUE: US$11.4 million (quarter ended March 2001)

TRIGGER EVENT: Vitech filed a voluntary petition for bankruptcy
               protection under Chapter 11 of the U.S. Bankruptcy
               Code in the U.S. Bankruptcy Court for the Southern
               District of Florida just days after California
               computer company Gateway Inc. filed a lawsuit
               against the company claiming the computer and
               electronics retailer had reneged on a $41-million
               deal in convertible notes. However, Microtech, its
               Brazilian subsidiary, wasn't included in the
               bankruptcy filing.

PUBLIC SECURITIES: 20,534,626 outstanding shares of the Common
                   Stock of the Company, no par value (As of May
                   15, 2001)

CHAIRMAN, CEO: Georges St. Laurent, III

PRES, COO, DIRECTOR: William St. Laurent

CFO: Edward Kelly

Last TCRLA Headline DATE: Wednesday, August 22, 2001, Vol. 2,
Issue 164


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

AVIANCA: Regulator Quits After Being Removed From Airline Ruling
----------------------------------------------------------------
Emilio Jose Archila resigned his position as industry regulator
after the Colombian government removed him from ruling on a
proposed merger by Aerovias Nacionales de Colombia SA (Avianca)
and Aerolineas Centrales de Colombia (Aces), according to a
report Thursday in Bloomberg. The vacancy may smooth the way to
possible approval of both the airlines' merger.

In June, Avianca, Colombia's biggest airline, and Aces
resubmitted an application to merge after Archila rejected an
earlier request. The carriers complained that Archila was biased
against the merger and acted improperly by discussing it with the
press. Archila has denied the accusations.



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

GRUPO ALFA: Continues To Reconfigure Business Portfolio
-------------------------------------------------------
Mexico's Grupo Alfa continues carrying out various operations of
divestments and the acquisition of new businesses in an effort to
reconfigure its business portfolio, Mexican financial daily El
Economista disclosed Thursday. The company predicts its strategy
will solidify its assets by the end of the year, believing that
newly acquired businesses will generate better revenues than
those being sold-off. Grupo Alfa managed to reduce its net debt
significantly because of better revenue flows during the second
quarter, better administration of working capital and the
positive impact derived from good investment operations. Alfa's
second-quarter results demonstrated an improvement over the first
quarter, but still showed effects of negative external factors
such as the strengthening of the peso against the dollar, the
weakness in exports, slumping steel prices and the high cost of
energy.


GRUPO DESC: Maintains $100M Investment Objective
------------------------------------------------
Mexico's Desc has been negatively affected by the slowdown in the
United States, the strengthening of the peso over the dollar and
the 13.6-percent drop in sales experienced by the automobile
parts sector, Mexican financial daily El Economista revealed
Thursday. Despite the current economic challenges, the company is
maintaining its objective of investing $100 million, mainly in
development and strengthening of its automobile division, which
represents 46.5 percent of annual sales. Desc has close to 30
auto-parts plants across the country, working at approximately 75
percent of capacity.


LUZ Y FUERZA: Wants 22B-Peso Subsidy For 2002
---------------------------------------------
Luz y Fuerza del Centro (LFC) chief Alfonso Caso informed the
Chamber of Deputies' Energy Commission that the state-owned
electricity utility needs a 22-billion-peso subsidy for 2002,
Mexican financial daily El Economista revealed Thursday. The
figure is 70 percent more than the 12.95-billion-peso amount
authorized for this year. These subsidies reportedly take into
account the costs of maintenance, growth, investment and the
payments to state-owned power utility, the Federal Electricity
Commission (CFE). The company expects to sell 21 billion pesos
worth of electricity next year, for which it will have to pay the
CFE 19 billion pesos. The small resulting profit margin requires
LFC to seek the government subsidies, said Deputy Rosario Tapia.


LTV: VP Buildings To Gain Higher Ground Upon Acquisition
--------------------------------------------------------
Monterrey-based conglomerate Imsa's impending US$102-million
acquisition of the Chilean and Mexican operations of VP Buildings
will take the steel building company to a new level, according to
VP Buildings president Dave Gilchrist in a Business News Americas
report released Thursday.

"This is a highly successful company with superb management and
vision. In my view, this pending new ownership will give VP the
opportunity to grow unencumbered by handicaps of the past,"
Gilchrist said in reference to Imsa.

VP Buildings has factories in Santiago and Monterrey in
partnership with Imsa's Ipac business unit, plus in Brazil (Nova
Bassano, Rio Grande Do Sul state) with the Medabil Group and in
Argentina (La Plata, Buenos Aires province) with Estanislao
Miller.

VP Buildings' present owner, Cleveland-based LTV Corp, is
currently operating under Chapter 11 bankruptcy protection and is
selling the company as part of its financial restructuring.
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.


QUADRUM: CNBV Intervention Won't Intrude On Elektra Alliance
------------------------------------------------------------
Elektra officials believe that the National Banking and
Securities Commission's (CNBV) recent intervention into Banco
Quadrum won't affect the company's strategic alliance with
Elektra for the financing of homes under the Elektra brand name
"Credimax," Mexico City daily Reforma reported Thursday.

"At the moment we don't believe there will be any effect, because
the intervention doesn't mean that the bank is no longer
operating, but signifies a process of reorganization," a source
said.


QUADRUM: Sought IPAB Help Earlier This Year To No Avail
-------------------------------------------------------
A source from the Mexican bank bailout agency IPAB revealed that
Banca Quadrum had asked for the agency's support between April
and June this year, but failed to meet the requirements
established in the Bank Savings Protection Law, Mexico City daily
Reforma reported Thursday.

"The support solicited by Banca Quadrum was not in agreement with
what was permitted by the Bank Savings Protection Law," the
source stated.

The financial regulator, the National Banking and Securities
Commission (CNBV) had to carry out the intervention because the
law bars IPAB from intervening in banks because of weak capital,
according to CNBV Vice President Pablo Escalante.

"IPAB does not have enough force to be able to take an
institution, which is logical, because the IPAB has to resolve
the issues of Quadrum, whether by lending money, by reorganizing
and selling it, or by liquidating it," related Escalante.


QUADRUM: Shareholders To Determine Bank's Future At Meeting
-----------------------------------------------------------
Banca Quadrum's future will be decided by shareholders when they
meet in mid-September, Mexico City daily Reforma reported
Thursday. If they opt to stick with the bank, they will have to
contribute additional capital to comply with the regulatory
requirements of at least 8-percent capitalization. Otherwise, the
financial institution will be taken over by Mexico's bank bailout
agency IPAB. According to the report, it will take several days
for CNBV to revise the bank's numbers, during which time
shareholders will have an opportunity to meet. The law stipulates
that shareholders have 60 days to gather the required capital.


QUADRUM: IPAB Backs Savings, Clients' Deposits
---------------------------------------------
Mexico's bank bailout agency IPAB announced it guarantees the
deposits of 2,800 savings clients of CNBV-intervened bank Banca
Quadrum, according to a report Thursday in Mexican financial
daily El Economista.

"IPAB informs that, according to the deposit insurance
established by the Bank Savings Protection Law, all resources of
the depositors of Banca Quadrum are completely guaranteed," IPAB
said. "IPAB reiterates its responsibility, established by the
law, of guaranteeing the deposits of bank clients when so
required."

The only items excluded from this insurance coverage are
operations carried out by Banca Quadrum on behalf of clients on
the Mexican Stock Exchange (BMV), IPAB added.



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

PAFCO: Panamanian VP Calls For Immediate Solution To Strike
-----------------------------------------------------------
Panamanian Vice President Arturo Vallarino is calling on Puerto
Armuelles Fruit Co. (Pafco) and its workers to resolve the banana
workers' strike as soon as possible, EFE reported. Vallarino
feared that the situation with Pafco, a subsidiary of troubled
Chiquita Brands International, Inc., might create further
problems with its parent company. Considering that Chiquita "is
already bitter" about a 50-day strike that occurred in 1998 and
the problems it has encountered marketing fruit internationally,
the Vice President is calling for a prompt solution to this
strike.

"We may be faced with a near disaster in this region (Panama's
Pacific Coast, in Chiriqui province, which borders Costa Rica) if
the company decides to leave Panama," the vice president said. He
also pointed out that if the company moves out of the country, he
does not know where its 3,200 employees will find work.




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
written permission of the publishers.

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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