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                   L A T I N   A M E R I C A

            Thursday, September 27, 2001, Vol. 2, Issue 189

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: SEPI Anxious To Close Sale Next Week
CORREO ARGENTINO: Owes 66.8M Pesos To Argentine Bank
SIDECO AMERICANA: S&P Lowers Ratings to `CCC' from `B-`


B R A Z I L

CVRD: Negotiating For Use Of Devastated Amazon Area
MOULINEX SA: Receives Two Takeover Offers


C H I L E

LANCHILE: Threatens to Idle Fleet Without Gov't Ins. Guarantees


M E X I C O

BANCRECER: Banorte To Fire 2,000, Cut Costs Through Merger
GAM: Files Injunction To Prevent Expropriation Of Refineries



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A R G E N T I N A
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AEROLINEAS ARGENTINAS: SEPI Anxious To Close Sale Next Week
-----------------------------------------------------------
The Spanish state holding company SEPI is looking to conclude the
sale of its ailing Argentine unit next week at the latest,
Aerolineas Argentinas. The marjority owner is attempting to forge
ahead, despite the crisis in the sector stemming from the recent
terrorist attacks lodge against the U.S., El Pais reported
Tuesday.

SEPI said that none of the four prospective purchasers have asked
for any modification of the conditions of the sale, nor have they
altered their offers, even in light of the fact that terrorist
attacks in the United States have plunged the sector into crisis.
Aerolineas has only operated domestic flights and services to a
limited number of Latin American capitals since May, when it
stopped paying for fuel shortly before officially suspending all
payments. The company states that occupancy levels of 40 - 50
percent have remained unaffected by the recent events affecting
air travel.


CORREO ARGENTINO: Owes 66.8M Pesos To Argentine Bank
----------------------------------------------------
Banco Galicia SA said it is owed 66.8 million pesos by its
post office concession affiliate and Macri group's Sideco
Americana SA unit Correo Argentino SA, AFX reported Monday.
According to the report, the Argentine bank has a 42-million-peso
stake in a syndicated loan totalling some 250 million that has a
pledge on Correo Argentina's shares, two trust funds, and is
guaranteed by Macri's Socma SA.

Financing for the postal operator's working capital totals 24.8
million pesos, of which, 10.8 million pesos is secured by
invoices to third parties ceded by Correo Argentino, while the
advance on current account is 3.3 million, and 3.5 million as
advance payment of rents. Guarantees granted to the national
state are 7.2 million, the bank said.


SIDECO AMERICANA: S&P Lowers Ratings to `CCC' from `B-`
-------------------------------------------------------
Standard & Poor's lowered the local and foreign currency
corporate credit ratings on Sideco Americana S.A. to triple-'C'
from single-'B'-minus following the announcement that Correo
Argentino S.A., Sideco's 69.23%-owned postal subsidiary,
purchased in the 1997 privatization of the former Argentine
government postal system, had filed for "Concurso Preventivo"
(akin to Chapter 11 protection). In addition, Standard & Poor's
also lowered its senior unsecured debt rating on Sideco to
double-'C' from triple-'C'. All ratings remain on CreditWatch
with negative implications, where they were placed March 10,
2000.

The original CreditWatch placement followed the decision by
Correo Argentino S.A. to withhold royalty payments due to the
government. The decision was based on unresolved claims
concerning mainly the compensation mechanism of monies owed to
and by the government and competitive disadvantages arising from
the lack of regulations for the postal market (that results in
unfair competition) and onerous labor contracts.

Based on the severe strain on Correo's operations and financial
position caused by the delays in negotiating a solution to these
issues, Correo filed for a "Concurso Preventivo." Standard &
Poor's believes that this action may constitute an event of
default under the indenture of Sideco's $125 million 9 1/8% notes
due 2002.

The "Concurso" filing is one of the possible causes for
termination of Correo's postal concession. However, Standard &
Poor's expects Correo's basic operations, which account for
approximately 40% of Argentine postal services, to continue
throughout negotiations. In addition, the filing voids all
existing labor contracts (which were part of Correo's claims) and
makes all payments due to the government part of the debt under
reorganization.

Sideco is involved in postal services (through its stake in
Correo) in Argentina and in toll roads and waste management in
Argentina and Brazil. Correo is Sideco's largest and most
important operation, representing 53% of Sideco's 2000
consolidated revenues and about 41% of consolidated EBITDA of
US$$180 million in 2000, prior to concession payments owed by
Correo to the government of Argentina of approximately US$103
million per year.

Correo was a cash drain for Sideco; the company's other
businesses, while impacted by worsened macroeconomic conditions
in both Argentina and Brazil, have generated funds from
operations of $67 million for the twelve month ended June 30,
2001. However, Correo's filing seriously constrains Sideco's
financial flexibility and deteriorates the company's overall
credit quality. Without considering Correo's debt and concession
obligations, Sideco and its subsidiaries face more than $260
million in maturities within the next 12 months. That amount
includes about $80 million of short-term rollover lines due in
September 2001 (of which the largest piece is a $20 million loan)
and the maturity of Sideco's $125 million senior notes in August
2002.

The ratings on Sideco will remain on CreditWatch until the
situation is resolved.


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B R A Z I L
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CVRD: Negotiating For Use Of Devastated Amazon Area
----------------------------------------------------
The Brazilian government is now looking into a proposal made by
CVRD (Companhia Vale do Rio Doce) regarding a concession of a
devastated area at Amazon region, Gazeta Mercantil reported
Monday. CVRD is looking to reforest the said area in order to
supply vegetable coal for the production of pig iron that would
be destinated to exports. The project can receive the grant of
the Brazilian development bank BNDES (Banco Nacional de
Desenvolvimento Economico e Social).

CVRD recently ditched a Costa Atlantica steel slab project it was
planning for Colombia's Caribbean coast along with local
steelmaker Acesco. The company's decision came after the
Colombian government declined to guarantee the gas and energy
supplies the two companies said the plant would require.

CONTACT:  Roberto Castello Branco, +55-21-3814-4540, or
          castello@cvrd.com.br, or Andreia Reis,
          +55-21-3814-4643, or andreis@cvrd.com.br, or
          Barbara Geluda, +55-21-3814-4557, or
          geluda@cvrd.com.br, or Daniela Tinoco, or
          +55-21-3814-4946, or daniela@cvrd.com.br,
          all of Companhia Vale do Rio Doce


MOULINEX SA: Receives Two Takeover Offers
-----------------------------------------
Two companies have formally offered to takeover French appliance
maker Moulinex SA, which filed for bankruptcy protection from
creditors this month, the CGT union revealed in an AP report
released Tuesday. These companies are private real-estate company
Fidei and a company formed by a group of Moulinex employees.

Meanwhile, French rival SEB, which had previously showed
interest, did not file a request with court administrators by the
Tuesday deadline, the union said.

A court in Nanterre, outside Paris, will decide on the viability
of the two offers. No information was given about how the
proposed offers would affect Brazilian operations.

Moulinex filed for bankruptcy after its primary shareholder,
Italy's Elettro Finanziaria, decided to withdraw its backing for
a $320 million rescue package.

Plagued by industry overcapacity, fierce competition from
overseas suppliers and debts of more than $750 million, Moulinex
has been struggling to survive for months, and its employees have
waged several protests against projected job cuts.



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C H I L E
=========

LANCHILE: Threatens to Idle Fleet Without Gov't Ins. Guarantees
---------------------------------------------------------------
LanChile SA threatened to ground much of its jet fleet unless the
government provides guarantees to compensate for losing some
insurance coverage, reported Bloomberg. In a statement issued
Monday, the Chilean airline said it would ground an unspecified
number of planes unless it can obtain insurance coverage for
damages caused by acts of war or terrorism. LanChile executives
met with government officials to seek guarantees after insurers
worldwide lowered the cap on payouts for such damages to $50
million, from $2 billion before the terrorist attacks.

Without such guarantees, "our planes could be paralyzed," the
company said.

So far, LanChile has locked in coverage for its planes,
passengers, and other equipment, company officials said. But
without insurance for terrorist acts, the company would have to
idle at least half its fleet, said LanChile President Luis
Ernesto Videla.

LanChile expects a government decision to come soon.



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

BANCRECER: Banorte To Fire 2,000, Cut Costs Through Merger
----------------------------------------------------------
Mexico's Grupo Financiero Banorte SA will spend $110 million next
year to merge its assets with the defunct bank BanCrecer SA, that
Banorte bought from the government for 1.65 billion pesos ($174
million), Bloomberg reported Tuesday. Banorte's chief economic
officer, Othon Ruiz Montemayor, revealed that the bank would
raise the money through cost cutting measures, which would
include the dismissal of more than 2,000 of BanCrecer's 6,513
employees.

"The funds will come from cost reductions," Ruiz Montemayor said.
"We will have no further capital requirements." He said the
company would save 1.4 billion pesos over the next two years by
closing as many as 250 branches from both banks.


GAM: Files Injunction To Prevent Expropriation Of Refineries
------------------------------------------------------------
Grupo Azucarero Mexico (GAM) filed an injunction to prevent the
federal government from expropriating its sugar refineries,
Mexican financial daily El Economista reported Tuesday. GAM,
which refineries, were among the 27 that the federal government
confiscated on September 23, argued that the refineries don't
fall within the parameters laid out by the injunction.

Just recently, Grupo Santos also presented six suits to federal
judges in an effort to legally block the expropriation of its six
sugar refineries by the federal government. Alberto Santos
Boesch, company director, disclosed that the company would fight
to regain its lost refineries. According to Boesch, no government
authority has met with Grupo Santos to explain what criteria were
used to determine the expropriation of the six refineries.

Injunctions filed by companies that have lost their refineries to
the government will likely interfere with the government's goal
to have the refineries returned to private hands within a period
of 18 months, according to Agriculture ministry senior official
Xavier Ponce de Leon.

"That situation complicates the times and will affect our plans.
It's probable that now it will take a little longer," the
official said.




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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