TCRLA_Public/011012.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

            Friday, October 12, 2001, Vol. 2, Issue 200

                           Headlines


A R G E N T I N A

GATIC SA: Files For Protection From Creditors


B R A Z I L

EMBRAER: China Southern Awaits Regulatory Approval For Jet Deal
EMBRATEL: AMS To Provide Collections, Support To 30M Customers
MOULINEX: Offers Insufficient, Liquidation Looms Ahead


C H I L E

LANCHILE: Monthly Traffic Down for September 2001
LANCHILE: Airline, Affiliate Flying To All Regular Destinations


J A M A I C A

AIR JAMAICA: To Impose New Insurance Levy To Offset Expenses
AIR JAMAICA: Implements Changes In Flight Schedules  


M E X I C O

AEROMEXICO/MEXICANA: Canceling Flights To Slash Costs
CINEMASTAR LUXURY: Announces Confirmation Of Reorganization Plan
CORPORACION GEO: Sees 3Q01 Revenues Of 1.2-1.25B Pesos
GMD: Two Govt. Officials Placed Under House Arrest For 90 Days
GRUPO BITAL: More Credit Card Clients Prefer Fixed Payment Plan

HOPI HARI: In The Black After Debt-Restructuring, Cost Reduction
HYLSAMEX: Analyst Presents Options For Handling Debt Payments
MEXICANA: Seeks Intervention To Compete With U.S. Airlines
SL INDUSTRIES: Completes Restructuring, Closes Reynosa Plant


     - - - - - - - - - - -


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

GATIC SA: Files For Protection From Creditors
---------------------------------------------
Gatic SA, an Argentine textile and sportswear maker, filed for
protection from creditors after accumulating US$340 million in
debt, EFE reported Wednesday. Company President Fabian
Bakchellian blamed Gatic's demise to smuggling, piracy and the
"indiscriminate" opening up of the Argentine market. However, the
filing does not endanger the company's exclusive licenses to sell
foreign brands such as Germany's Adidas and Brazil's Reef,
Bakchellian said.

Gatic contacted representatives of all the brands it represents
in Argentina, "and they all agreed (filing for protection from
creditors) was the only way to stay in business," he added.

Gatic reportedly owes US$150 million in taxes, US$90 million to a
group of banks, including London's Standard Charter, and US$100
million to its suppliers.



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

EMBRAER: China Southern Awaits Regulatory Approval For Jet Deal
---------------------------------------------------------------
China Southern Airlines, China's largest carrier, is expecting
approval from the General Administration of Civil Aviation of
China (CAAC) and the powerful State Development Planning
Commission (SDPC) for an agreement signed with Brazil's Embraer
last November, industry sources revealed in a report Wednesday in
Reuters.

The Chinese carrier signed an agreement with Embraer last
November to add 20 ERJ145 regional jets to its fleet, plus an
option to acquire another 10. The market price for one ERJ145 is
about US$20 million. The deal could be a financial shot in the
arm for Embraer, whose stock has been battered by the wave of
cutbacks and layoffs across the global aviation industry.

"Both parties have filed applications with the CAAC and SDPC, and
they are still waiting for their endorsement. Approval is very
likely," the source revealed.


EMBRATEL: AMS To Provide Collections, Support To 30M Customers
--------------------------------------------------------------
Empresa Brasileira de Telecomunicacoes (Embratel) has appointed
American Management Systems (AMS) (Nasdaq: AMSY), a leading
international business and information technology consulting
firm, to provide new collections strategies and a credit
management solution to support the company's 30 million
customers.

Embratel is the premier communications provider in Brazil and one
of the largest in the world.  The company faces increasing
competition in 2002 as the Brazilian communications market is
opened up to allow competition across all communications products
and market segments.

Embratel has used third-party organizations to handle collections
from its extensive customer base.  The AMS solution is expected
to deliver productivity improvements and better management
control over accounts receivable, as well as a reduction in bad
debt provision.  AMS will develop and implement enhanced risk-
based collections strategies, enabling Embratel to introduce
different credit management treatments for high and low risk
customers.

The AMS engagement will involve credit risk management
consulting, organization design and change management services,
the re-engineering of business processes and implementation of
AMS's CACS(R)-Telecom credit management solution.  CACS-Telecom
is already delivering reductions in delinquent accounts and
operating costs for clients in North America and Europe.

Jose Maria Zubiria, Chief Financial Officer of Embratel said: "We
expect the introduction of new credit management strategies,
systems and processes to deliver significant return on investment
as well as enabling us to provide a responsive, world class
service to our customers.  AMS has impressed us with their
commitment and professionalism, and their expertise in credit and
collections is second to none.  We began the transfer of
knowledge from AMS to our own collections staff last March and we
feel confident that it will allow us to implement a state of the
art system."

AMS completed earlier this year Implementation Assessment and
Performance Test projects at Embratel, examining the client
organization in detail and outlining the vision for a new credit
management and collections environment. The AMS team, which
includes experts in credit risk, customer management, business
process design, decision analytics and interface design, from
Brazil, Europe and the United States, is helping the Embratel
team to complete the deployment of the CACS(R)-Telecom collection
management solution later this year.

Jim Sheaffer, Senior Vice President in AMS's New Media &
Communications group said: "Embratel is demonstrating real
business acumen in moving now to secure its market leadership in
advance of further deregulation next year.  We are delighted to
be working with them on this exciting and far-reaching project.  
This project is a significant business win for AMS and reflects
growing demand from across the world for customer and credit
management strategies that hold down costs and help
telecommunications companies to sustain competitive advantage."

AMS has over 20 years' experience in helping communications firms
more effectively manage their customers, by providing the
consulting services and solutions necessary to make operational
improvements across the company, in collections organizations,
call centers and marketing areas.

To see company's latest financial statements:
http://www.bankrupt.com/misc/Embratel.pdf

CONTACT:  Embratel Participacoes S.A.
          Silvia M.R. Pereira
          Investor Relations
          TELEPHONE: (55 21) 2519-9662
          FAX: (55 21) 2519-6388
          EMAIL: invest@embratel.com.br

          or

          Wallace Borges Grecco
          Press Relations
          TEL: (55 21) 2519-7282
          FAX: (55 21) 2519-8010
          EMAIL: cmsocial@embratel.net.br


MOULINEX: Offers Insufficient, Liquidation Looms Ahead
------------------------------------------------------
The French domestic appliances group Moulinex SA is now faced
with the threat of liquidation after receivers deemed all
takeover offers for the group insufficient. The court-appointed
administrators have pointed out the possibility of liquidation
despite group chairman Patrick Puy rejecting this hypothesis
during that time when he announced that the group was entering
administration on September 7. In a report sent to union members
by the works council, the administrators state that Fidei's take-
over offer is unacceptable while SEB's remains insufficient, as
the price offered bears no resemblance to the value of the assets
on offer. All union representatives have denounced the taking of
stocks as financial guarantees by the banks in order to settle
Moulinex's debts.



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

LANCHILE: Monthly Traffic Down for September 2001
---------------------------------------------------
Lan Chile S.A. (NYSE: LFL) Chile's largest domestic and
international airline, reported its preliminary September monthly
and accumulated traffic statistics and punctuality indicators.

The Company reported that its system passenger traffic for
September increased 1.1% while capacity increased 10.8%. As a
result, the Company's load factor decreased 6.0 points to 62.5%.
The passenger business in the month of September was
significantly impacted by the terrorist attack on the United
States, which resulted in flight cancellations and frequency
reductions.

International passenger traffic for September decreased 6.6%,
while international passenger capacity increased 6.6%.
Accordingly, the international passenger load factor for the
month decreased 8.6 points to 61.4%. Domestic passenger traffic
for September increased 29.7% as capacity increased 25.3%.
Accordingly, the domestic load factor for the month increased 2.2
points to 65.6%.

Cargo capacity for September decreased 11.3% while cargo traffic
as measured in RTKs decreased 17.9%. The reduction in
international cargo traffic primarily resulted from the
cancellation of belly and freighter operations due to the
terrorist attack on the United States and weaker demand in major
markets including the United States, Argentina and Brazil.

In addition, in September, 49.9% of the Company's total flights
left on time, based on a fifteen-minute standard (considering all
departures leaving up to fifteen minutes of the scheduled
departure time as "on time"). This represented a 40.8 point
decrease as compared September 2000 and was the result of a
pilot-induced slowdown in anticipation of the LanChile pilot
union contract negations scheduled to begin October 15, 2001.

To see company's latest financial statements:
http://www.bankrupt.com/misc/LanChile.pdf

CONTACT:  Lan Chile S.A., Santiago
          Alejandro de la Fuente or Daniel Jones
          562/565-2538 / 6812
          djones@lanchile.cl
          or
          i-advize Corporate Communications, Inc., New York
          Maria Barona or Blanca Hirani, 212/406-3691
          mbarona@i-advize.com or bhirani@i-advize.com


LANCHILE: Airline, Affiliate Flying To All Regular Destinations
---------------------------------------------------------------
In a press release, LanChile Airlines (NYSE:LFL) and its
affiliate LanPeru announced they are currently operating flights
to all of their regular destinations, including more than 90
percent of their regular schedule. LanChile offers service from
16 U.S. cities, including daily non-stop and direct flights from
its Miami, New York and Los Angeles gateways to Lima, Santiago,
Buenos Aires, Bogota, Caracas, Quito, Guayaquil and Punta Cana.
LanPeru is operating 100 percent of its regular schedule with
service from Miami, New York and Los Angeles to six destinations
throughout Peru. All LanChile and LanPeru flights within Latin
America remain fully operational.

"LanChile is a strong company with an excellent safety record,"
said Roberto Bianchi, LanChile's Vice President North/Central
America and Asia. "As always, our first priority is our
commitment to providing the highest quality of safety and service
for our passengers. I want to assure our passengers that we are
doing everything in our power to ensure their safety."


CONTACT:  MSP Communications, Inc., Coral Springs, Fla.
          Misty Pinson, 954/341-2535
          mspcomm@home.com
          or
          LanChile Airlines, Miami
          Martin Mosley, 305/670-1961
          mmosley@lanchile.com



=============
J A M A I C A
=============

AIR JAMAICA: To Impose New Insurance Levy To Offset Expenses
------------------------------------------------------------
Air Jamaica will introduce on October 15 a new insurance levy on
all tickets in order to offset the increase in insurance costs on
airlines worldwide, RJR Radio Jamaica said Tuesday. For domestic
flights, passengers will be required to pay a surcharge of US
$2.50 or its equivalent in local currency. The same also applies
to all Air Jamacia Express flights. For international flights,
the surcharge will be US$5 or the local equivalent for each leg
of the flight. Therefore, persons traveling from Kingston to
Miami return, the surcharge is US$10.

Following the September 11 terrorist attacks in the United
States, airlines were faced with higher insurance costs as
reinsurers hiked rates in order to cover themselves against
excess liabilities.

Air Jamaica, which has faced a drastic drop in revenue due to a
huge decline in airline travel, lost US$11 million in the days
after the attacks as several of its planes were grounded for
three days.


AIR JAMAICA: Implements Changes In Flight Schedules  
---------------------------------------------------
National airline Air Jamaica was scheduled to implement Tuesday
changes in its flight schedules and to reduce capacity, RJR Radio
Jamaica said in a report. The airline had explained that the
changes were necessary due to the fall-out in the travel sector
triggered by the September 11 terrorist attacks in the US.



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

AEROMEXICO/MEXICANA: Canceling Flights To Slash Costs
-----------------------------------------------------
Cintra-controlled airlines, Aeromexico and Mexicana, began a
process of cutting costs through the cancellation of some 100
flights, and, in some cases, the complete termination of routes,
Mexican financial daily El Economista reported Wednesday. The
airlines were prompted to implement this strategy because of the
serious financial situation they are experiencing as a result of
last month's terrorist attacks in the US.

Aeromexico has already canceled four routes: Guadalajara-
Monterrey-New York, Mexico-Phoenix, Guaymas-Phoenix, and Cozumel-
Atlanta. The company has also reduced the frequency of other
flights by 5 percent, said its executives. Mexicana, on the other
hand, predicted the cancellation of 60 flights, most of them to
tourist destinations.

Both airlines have downgraded their projected total Mexican
tourist passengers from 3 million to 2 million for the last
quarter of this year.

CONTACT:  AEROMEXICO
          Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or
          mweitzman@aeromexico.com

          MEXICANA DE AVIACION
          Jenny Jenks, Marketing Director, International
          Division of Mexicana Airlines, +1-210-491-9764, or
          ennyjenks@mexicana.com


CINEMASTAR LUXURY: Announces Confirmation Of Reorganization Plan
----------------------------------------------------------------
CinemaStar Luxury Theatres Inc. announced Wednesday that the
United States Bankruptcy Court for the Southern District of
California has entered an order confirming the company's plan of
reorganization.

CinemaStar voluntarily filed a petition to reorganize its
business under chapter 11 of the U.S. Bankruptcy Code on Jan. 4,
2001, after overbuilding in the motion picture theatre industry
and the resulting intense competition for movie patrons caused
the company to incur significant losses.

Under the company's plan of reorganization, unsecured creditors
were given the option of accepting an immediate one time payment
equal to 65 percent of their claim, or a promissory note equal to
100 percent of their claim, payable semi-annually installments
with interest over five years. Shareholders were given the option
of being cashed out for an amount equal to the current going
concern value of their stock, or they could elect to contribute
cash to the reorganized debtor and be issued new shares of common
and preferred stock in the reorganized debtor. Shareholders were
advised that CinemaStar's previously outstanding shares of stock
will be cancelled under the plan and that CinemaStar will cease
to be a publicly traded company.

CinemaStar anticipates that the confirmed plan will become
effective on Oct. 18, 2001. Upon the effective date of the plan,
CinemaStar will operate four first-run theatres, containing 61
screens, in Southern California, and one first-run theater,
containing 10 screens, in Baja California, Mexico.

"The bankruptcy process has been a challenging time for
CinemaStar, and we appreciate those customers, vendors and
employees who have continued to support the company during these
past 10 months," said Don Harnois, CinemaStar's chief financial
officer. He added, "CinemaStar is emerging as a smaller yet
stronger organization, poised to take advantage of any
opportunities that may become available to the company in the
years ahead."

CONTACT:  CinemaStar Luxury Theatres Inc.
          Donald H. Harnois, 760/929-2525


CORPORACION GEO: Sees 3Q01 Revenues Of 1.2-1.25B Pesos
------------------------------------------------------
Mexican Corporacion Geo, the homebuilder that disclosed it would
release its earnings results on October 22 after markets close,
said it expected its third-quarter revenues to come in between
1.2 billion and 1.25 billion pesos, Reuters disclosed Tuesday.  

"Third quarter results are expected to show increases in the most
important operating items when compared to the same period of
2000 and quarter over quarter," the company said in a brief
statement.

Geo said it expected to have sold between 6,300 and 6,500 homes
in the quarter. The company's operating margin for the quarter
was expected to come in between 15 percent and 15.3 percent, the
statement said. The company did not provide a figure for
operating profit.

Geo recently sold 135 million pesos (US$14.2 million) in five-
year bonds to help cover US$50 million in euro-debt coming due
next year. It was able to sell the bonds at the same yield as a
300 million-peso bond with a four-year maturity sold in August,
signaling investor confidence in the company.


GMD: Two Govt. Officials Placed Under House Arrest For 90 Days
--------------------------------------------------------------
The assistant judiciary department head at the Institute for the
Protection of Bank Savings (IPAB), Eugenio Gonzalez Sierra, and
the director of corporate investment at the government Foreign
Trade Bank (Bancomext), Leon Schietekat, have been placed under
house arrest for 90 days under charges of bribery, money
laundering and criminal plotting.

According to a report Tuesday in Deutsche Presse-Agentur, both
men are accused of having asked the construction firm Grupo
Mexicano de Desarrollo (GMD) to pay them $1.5 million to help the
struggling company restructure its debt and financial liabilities
through the government agencies they were working for.

Reports suggest that Gonzalez Sierra and Schietekat also received
a $650million bribe from broker firm Grupo Bursatil
Mexicano, which was deposited in an offshore account, and could
be money linked to illicit activity.

IPAB, in a press release, denied any responsibility in the
alleged criminal activity by Gonzalez Sierra.


GRUPO BITAL: More Credit Card Clients Prefer Fixed Payment Plan
---------------------------------------------------------------
Bital Vice President Felipe Lopez revealed that close to 330
thousand credit card clients, even with imperfect credit
histories, would now be able to make purchases on credit with
fixed payment terms of between three and 18 months, with fixed
annual interest rates of between 25 percent and 28 percent,
Mexico City daily Reforma reported Wednesday.

"For terms of three and six months, the rate is 25 percent. For
nine to 12 months, the rate is 27 percent, and for 15 to 18
months, the rate is 28 percent," said Lopez.

Close to 3,500 clients per week are transferring to the plan,
which doesn't punish clients for being slightly behind on
payments, he said. The main reason why clients are transferring
to the new card is the certainty of the payments, he added. The
bank also reduced the interest rate on its normal credit card by
15 percentage points to 33 percent, Lopez disclosed.


HOPI HARI: In The Black After Debt-Restructuring, Cost Reduction
----------------------------------------------------------------
In the first nine months of 2001, Hopi Hari amusement park was
able to reverse last year's losses following a restructuring of
its debts and cost cutting measures, Gazeta Mercantil Online
reported Tuesday. The park's operational cash flow (measured by
the EBITDA criteria) between January and September exceeded R$10
million, enough to cover the R$9 million loss recorded in 2000.
During the first half of the current year, Hopi Hari already was
registering an increase in visits and revenues. It reportedly
posted revenues of R$34.7 million during the period, 6.7 percent
greater than during the first six months of 2000.


HYLSAMEX: Analyst Presents Options For Handling Debt Payments
-------------------------------------------------------------
Mexico's largest steel producer, Hyslamex, has $94 million in
debt coming due in December and another $125 million coming due
on January 31, Mexico City daily Reforma reported Wednesday.
Presently, the steel producer is considering all of its options.
According to Vector Casa de Bolsa analyst Angelo Garcia, the
company could renegotiate its debt, form a strategic alliance or
inject new capital,

"It's difficult for the January due date, but Alfa is behind
them. That's what will keep them going," he said. Hyslamex is
owned by Grupo Alfa.

The company is carrying out a detailed analysis of its financial
situation in order to develop a future financial plan, said CEO
Alejandro Elizondo Barragan.


MEXICANA: Seeks Intervention To Compete With U.S. Airlines
----------------------------------------------------------
Believing that it can't compete with U.S. airlines that have
received financial support from the U.S. government, Mexicana
airline will make a formal proposal to the Transport and
Communications ministry (SCT) for intervention to insure the
airline's future, according to a report Wednesday in Mexico City
daily El Universal. Mexicana CEO Fernando Flores said that the
U.S. airlines are able to sell fares below cost because they are
receiving financial support from their government.

"Mexicana de Aviacion can't compete in unequal conditions in
routes between Mexico and the United States, with airlines that
have just received strong financial support, and that are now
using (the support) to lower fares on international routes," he
said.

CONTACT:  MEXICANA DE AVIACION
          Jenny Jenks, Marketing Director, International
          Division of Mexicana Airlines, +1-210-491-9764, or
          ennyjenks@mexicana.com



SL INDUSTRIES: Completes Restructuring, Closes Reynosa Plant
------------------------------------------------------------
SL Industries Inc. (NYSE:SL)(PHLX:SL) provided Wednesday an
update on business developments and announced that it has
completed its planned restructuring in response to the slowdown
in the telecommunications industry, with the closure of its
manufacturing facility in Reynosa, Mexico.

Owen Farren, president and chief executive officer, said: "To
further reduce the impact on SL Industries of the slowdown in the
telecommunications market, the company's Condor D.C. Power
Supplies subsidiary will close its manufacturing plant in
Reynosa, Mexico, and consolidate operations in its facility in
Mexicali, Mexico.

"We expect these actions to further improve operating profits and
cash flow, while maintaining Condor's flexibility to meet
increased demand for power supplies for customers in the
telecommunications industry when conditions improve.

"The company will record an additional restructuring charge of
approximately $2.5 million in connection with the closure of the
Reynosa facility."

Farren continued: "As a result of aggressive cash management,
cost reductions and restructuring activities, the company's
financial condition has significantly improved over the last
quarter. In addition, the company has experienced continued
strength in all of its business segments other than the
semiconductor and telecommunications markets.

"Assuming that business activity continues at its current levels
and the company is able to draw on its revolving credit facility,
we anticipate that the company will have adequate liquidity to
fund operations and working capital requirements."

As previously announced, the company obtained a waiver of certain
financial covenants in its revolving credit facility for the
fiscal quarters ended March 31, 2001, and June 30, 2001. The
company has advised its banks that it will be in default of the
financial covenants in the revolving credit facility for the
quarter ended Sept. 30, 2001, and is currently in discussions
with its banks to amend its financial covenants for such quarter
and beyond.

As the company and its banks are still in negotiations, it is too
early to determine if these discussions will be successful. If
the company and the banks are unable to reach an agreement, the
company's ability to continue operations as presently conducted
will be materially adversely affected.

Farren concluded: "As mentioned earlier, the company has
experienced strong activity in all of its business segments,
other than sales to the semiconductor and telecommunications
markets. Although the company has not yet been adversely impacted
by the attacks of Sept. 11, it is still too early to determine
future business conditions as a result of the attacks.

"The company's SL-Montevideo Technology and Elektro-Metall Export
subsidiaries engage in substantial business in the aerospace
sector, serving both defense and commercial aerospace customers.
As previously announced, we know of no development or event to
account for the recent unusual trading activity in shares of the
company's common stock.

"The recent attacks have, however, impacted the capital markets
and delayed the sales process for the company and its business
segments. The company and Credit Suisse First Boston expect to
conclude preliminary discussions with potential purchasers and
complete analyses of proposed transactions by the end of
October."

About SL Industries

SL Industries Inc. designs, manufactures and markets Power and
Data Quality (PDQ) equipment and systems for industrial, medical,
aerospace and consumer applications. For more information about
SL Industries Inc. and its products, visit the company's Web site
at www.SLpdq.com.

CONTACT:  SL Industries Inc.
          Owen Farren, 856/727-1500
          www.SLpdq.com
          or
          Neil Berkman Associates
          Neil Berkman/Melanie Beeler, 310/277-5162
          (Investor Relations)
          info@BerkmanAssociates.com




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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