TCRLA_Public/011025.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

            Thursday, October 25, 2001, Vol. 2, Issue 209



AEROLINEAS ARGENTINAS: Projecting Breakeven By Next Year
EPEC: Opening Bids Slated For October 30


BANCO ECONOMICO: Race For Acominas Stake Down To One Bidder
CESP: Shares Drop On Sale Speculation
CVRD: Teaming Up With Other Firms To Bid For Copel
EMBRAER: Seeks To Increase Market Share In Non-Commercial Sector

EMBRATEL PARTICIPACOES: 3Q01 Report Sites Devaluation For Loss
FAZENDAS REUNIDAS: Files For Bankruptcy Protection
GAZETA MERCANTIL: Hires Worldinvest To Carry Out Restructuring
GLOBO CABO: To Fire 1,000 Workers In Bid To Recover Losses
PROLAGOS: Negotiating To Secure US$35M Loan From BEI


AEROMEXICO/MEXICANA: Applauds Government's Airport Decision
GRUPO DINA: Workers Lodge Protest Demanding Intervention
MINERA AUTLAN: Cacho Expects Restructuring Efforts To Pay Off
SANLUIS: Nears Conclusion On Debt Refinancing


PESQUERA CAROLINA: Posts Sales Of US$12.7M In September

T R I N I D A D   &   T O B A G O

BWIA: Pension Surplus Settlement Expected To Finalize Shortly

     - - - - - - - - - - -


AEROLINEAS ARGENTINAS: Projecting Breakeven By Next Year
Argentine airline Aerolineas Argentinas, which was recently
acquired by Air Comet, slowly resurrects with the target of
breaking even next year and returning to solid profitability in
two years' time, El Mundo reported Tuesday.

Accordingly, Air Comet has devised a plan using the amount
provided by SEPI to fulfill its promise to take on half the
airline's $1.2 billion debt load.

The carrier, which suspended payments to creditors in June, will
not finalize negotiations with them until April. While Argentine
legislation allows a group to renegotiate up to 60 percent of its
debts, the company has stated that larger creditors may be
granted equity stakes in the carrier's share capital.

The new management model will be the key to Aerolineas
resurrection, and will focus on cutting costs by between 25 and
30 percent, along with raising revenues through the launch of new
tourism products.

Antonio Mata, head of Aerolineas Argentinas, revealed that the
debt of the Spanish state holding company (SEPI), former owner of
Aerolineas Argentinas, has been absorbed by Interinvest,
Expansion reported Tuesday. Interinvest is a company controlled
by Air Comet and holder of 91.9 percent of Aerolineas Argentinas.

According to Mata, Air Comet will agree to the terms of repaying
the debt by mid-2002 and the Argentine government will allow the
negotiation of up to 60 percent of the debt.

Air Comet has already drawn up a reconversion plan for the
Argentine airline, which includes a 15-20 percent pay cut in
exchange for shares which will have to be held for three years.

The intent is to cut costs by 25-30 percent in order to make
sales of $1.054 billion and return to the black in the first year
of the airline's new management.

Aerolineas Argentinas has carried out a capital increase, 10
percent of which has been set aside for employees and 15 percent
for Argentine institutional investors.

In its effort to create a solid core group of shareholders, Air
Comet will also negotiate the participation of some creditors
into the airline's capital, such as banks, Airbus and Repsol YPF.

Air Comet has not ruled out reducing its stake to 51 percent and
eventually floating Aerolineas Argentinas shares on the stock

EPEC: Opening Bids Slated For October 30
After a series of delays in the process of selling control in
integrated power company Epec, Argentina's Cordoba province has
scheduled once again to open bids from US power company AES,
Belgium's Tractebel and Spain's Union Fenosa on October 30,
Business News Americas reported Tuesday.

Previous postponements came at the request of prospective bidders
over difficulties associated with financial guarantees amid
Argentina's slumping economy.

"One cannot rule out the process being postponed once again at
the request of one of the companies, but to date there has been
no indication of this happening and more than on previous
occasions we believe we will conclude this process," Epec public
relations manager Adrian Calvo said.

Earlier estimations made by governor Jose Manuel de la Sota
indicated that the government of Cordoba expects to receive some
US$400 million for Epec.

Once Epec is sold, the privatization of Santa Fe province
distributor Epesf should begin, in line with a deal between de la
Sota and Santa Fe governor Carlos Reutemann, who agreed that the
sales would not run at the same time to avoid clashing.


BANCO ECONOMICO: Race For Acominas Stake Down To One Bidder
The Brazilian Central bank was slated to auction Wednesday the
17.67 percent stake in Acominas, O Globo said in a report. The
stake is held by Agropecuaria Senhor do Bonfim, a subsidiary of
Banco Economico, the Brazilian bank which is being liquidated by
the Brazilian Central bank.

According to O Globo, the auction for the stake was down to only
one pre-qualified bidder, Brazilian steel manufacturer Belgo
Mineira, following Gerdau's withdrawal to bid for an increased
stake in Acominas.

Gerdau, which already holds a 38-percent share of the Minas
Gerais-based steelmaker Acominas, decided against bidding for an
increased stake because it considered the minimum price of R$489
million to be too high.

The Banco Central is now analyzing a proposition submitted by the
former controllers of Banco Economico, Mercantil de Pernambuco
and Banco Nacional in their attempt to prevent the auctioning off
of the securities (NTNs), which are part of their banks'

According to a report released by South American Business
Information, the idea of the proposal is that the Banco Central
buys back the securities for the same price the banks paid for
them, minus the necessary costs associated with the transaction.

The ex-controllers see an advantage on the part of the Banco
Central in the said proposal, as the securities could be deducted
from the public debt, making space for new issues.

The NTNs held by the three banks currently being liquidated
amount to R$11.004 billion, or 1.78 percent of the public debt.

The ex-controllers are worried that the securities will be sold
cheaply, thereby generating a loss for the banks.

CESP: Shares Drop On Sale Speculation
Shares of Companhia Energetica de Sao Paulo (CESP) fell 2.98
reais to 11.80 reais after doubling in two weeks on speculation
the government would sell the company after the sale of Cia.
Paranaense de Energia on Oct. 31, Bloomberg revealed Tuesday.

Investors are concerned the government doesn't have the political
backing to follow through with the sale of CESP as early as next
year, analysts said.

"If they can privatize, the stock price could go up to 24 reais,
but it isn't clear they can sell it in 2002 because it's not
popular politically to sell the utility," said David Hurd, Latin
America electricity analyst at Deutsche Banc Alex. Brown in
Baltimore, Maryland.

CVRD: Teaming Up With Other Firms To Bid For Copel
Shares of Companhia Vale do Rio Doce (CVRD) were off 0.9 percent
to 55 reais, Bloomberg said Tuesday. Analysts believe that the
company's shares are drop, as the electricity sector is not the
core business of CVRD, which is mining.

The world's largest iron ore exporter is reported to be teaming
up with Belgium's Tractebel SA and Brazil's VBC Energia in order
to bid for the control of Copel on Oct. 31 but the company still
hasn't confirmed the report.

CONTACT:  Roberto Castello Branco:

          Andreia Reis:

          Barbara Geluda:

          Daniela Tinoco:

EMBRAER: Seeks To Increase Market Share In Non-Commercial Sector
Brazilian aircraft manufacturer Embraer is aiming to up the share
of its military, corporate and service segments to 25 percent of
overall turnover over the next three years, O Globo reported

Currently, the three targeted segments represent 13 percent of
the company's turnover, while sales of commercial aircraft make
up the balance or 87 percent.

Meanwhile, Embratel Chairman Mauricio Botelho disclosed that the
company is well positioned to win an order from the Brazilian Air
Force (FAB) for supersonic jets. This deal, according to the
executive, will help the company increase its sales in Latin

To see company's latest financial statements:

CONTACT:  Anna Cecilia Bettencourt
          +55 12 345 1106

          Milene Petrelluzzi
          +55 12 345 3054

EMBRATEL PARTICIPACOES: 3Q01 Report Sites Devaluation For Loss
Embratel Participacoes S.A. (Embratel Participacoes or the
"Company") (NYSE: EMT; BOVESPA: EBTP3, EBTP4), the Company that
holds 98.8 percent of Empresa Brasileira de Telecomunicacoes S.A.
("Embratel"), announced Tuesday results for the quarter ending
September 30, 2001. All financial figures are in Reais and based
on consolidated financial statements in "Legislacao Societaria"

    2001 Third Quarter Highlights

    --  Embratel Participacoes' third quarter 2001 net revenues
        were R$ 1.9 billion as a result of growth in domestic
        long distance voice revenues and corporate data services

    --  EBITDA was R$391 million

    --  Net loss for the quarter was R$195 million arising from
        the continued devaluation of the Real; net foreign
        exchange losses were R$318 million
    --  On a year-to-date basis, net revenues and net losses
        were, respectively, R$5.6 billion and R$267 million

Data Communication Service

Third quarter data revenues rose 10.9 percent to R$459 million
compared to the same quarter of 2000. Data growth was a
combination of growth in core data services and a continued
decline in wholesale revenues.

Core data services revenue which includes corporate networks,
frame relay services and Internet grew 18.4 percent when compared
to the same quarter of the previous year. Internet revenues
continued to grow in excess of forty percent. Internet revenues
have been impacted by lower dial-up access usage related to the
energy savings requirements by households and the overall decline
in the Internet market. Aggressive price competition slowed down
during the quarter, although we continue to see price reductions
at contract renewals.

Additionally, the continued devaluation of the Real is causing a
reassessment of current data price levels which will likely
result in price increases across various product lines. While we
expect wholesale revenues to continue to decline, wholesale
prices may be impacted by this overall reassessment.

On an accumulated basis, core data and Internet services grew
27.2 percent compared to the first nine months of the previous
year. Wholesale revenues declined 43.7 percent in the same
period. Total accumulated data revenues were R$ 1.4 billion,
representing a 16.5 percent growth compared to the first nine
months of 2000. These growth rates are in line with our full year
growth expectations.

Voice Services

Domestic Long Distance

Domestic long distance revenues rose to R$1.2 billion in the
third quarter of 2001 compared to R$1.1 billion in the third
quarter of 2000, representing an 11.4 percent growth year-over-
year. Traffic growth was the main cause for the increase in
revenues in the period of comparison.

Year-to-date, domestic long distance revenues were R$3.4 billion,
corresponding to a 21.4 percent increase when compared to the
nine months of 2000. Growth in domestic long distance traffic
(resulting from the growth in the number of lines), traffic mix
and new alternative calling plans, which contributed to the
increase in the average revenue per minute, were responsible for
the increase.

International Long Distance

International long distance revenues were R$218 million, a 10.1
percent decrease compared to R$243 million in the third quarter
of 2000. The main cause of the decrease was the reduction in
tariffs due to price declines. Compared to the second quarter of
2001, international long distance revenues fell 7.4 percent. The
reduction was the consequence of single digit rate promotions
adopted by the company in major international routes for a period
of approximately 7 weeks. This selective promotion maintained
Embratel's competitiveness in these markets and allowed us to
retain customers while growing outbound traffic by a total of
17.9 percent relative to the second quarter of 2001. This
reversed the decline in traffic observed in the previous two
quarters of the year.

Embratel's management of international relationships during the
aggressive outbound pricing campaign succeeded in securing
additional commitments of inbound minutes.

On an year-to-date basis, international long distance revenues
were R$674 million compared to R$736 million in the nine months
of 2000. Embratel believes international revenues will continue
to experience price declines.


EBITDA was R$391 million compared to R$475 million in the third
quarter of 2000. EBITDA margin was 20.4 percent this quarter
compared to 27.0 percent in the third quarter of 2000. The
increase in operating expenses is attributable to continued
higher bad debt provisions that increased by R$86 million from
the year-ago quarter to R$169 million (8.8 percent of net
revenues or 6.5 percent of gross revenues). The new Universal
Service taxes drove an additional increase of R$26 million from
the prior year and PIS/COFINS taxes on the hedge income caused an
additional R$9 million increase. Embratel reduced the overall
work-force in September creating severance costs of R$12 million.

Year-to-date EBITDA was R$1.2 billion compared to R$1.3 billion
in the same period a year ago. This decrease was mainly caused by
additional taxes and increases in provision for doubtful
accounts. The total amount booked for doubtful receivables in
2001 is R$490 million.

Net Income

The net loss for the third quarter of 2001 was R$195 million. The
loss was created by the effect of the devaluation of the Real
vis-a-vis the US dollar (15.9 percent in the quarter) on the
Company's foreign currency debt (see Financial Position below).

Embratel chose not to implement the Provisional Measure 03/2001,
which would have allowed deferral of the unusual foreign exchange
losses incurred in 2001. The decision was made to apply a
consistent treatment under both Brazilian and US accounting rules
and adopt a conservative approach.

On an accumulated basis, the net loss reached R$267 million in
the nine months of 2001 compared to a net income of R$419 million
in the nine months of 2000. The foreign exchange and monetary
variation losses, net of the offsetting hedge income, totaled
R$597 million.

Financial Position

Embratel Participacoes ended the quarter with a cash position of
R$551 million. Total debt outstanding as of September 30, 2001
was R$3.8 billion (net debt of R$ 3.3 billion). R$1.2 billion
corresponded to short term debt and current portion of long term
debt. New debt, net of repayments obtained in the quarter was
R$341 million.

While Embratel's debt profile continues to be primarily
denominated in foreign currencies, portions of this debt have
been swapped to the Real according to Exhibit 16 below.

The Company's policy is to hedge all new debt with maturity of
less than three years. This policy aims at achieving a balance
between preserving cash and protecting the balance sheet.

Accounts Receivables

The Company's net receivable position on September 30, 2001 was
R$2.6 billion, representing R$44 million increase from the second
quarter of 2001. Gross receivables were R$3.6 billion in the
third quarter of 2001 compared to R$3.4 billion in the second
quarter of 2001. Provision for doubtful accounts balance was
R$975 million at the end of the third quarter of 2001.

The Company continues to increase the number of blocked lines -
totaling over 500,000 at the end of September - and to send
client names to the credit scoring agencies.

Embratel is concerned that general economic conditions may cause
further deterioration in consumer credit quality. The company
continues to monitor the situation closely.

Capital Expenditures

During the third quarter, capital expenditures were R$380
million. The breakout of this expenditure is the following: local
infrastructure and access - 23.5 percent; data and Internet
services - 19.3 percent; network infrastructure - 20.8 percent
and others - 36.5 percent. Cumulative capital expenditure has
been R$ 963 million in 2001. The Company is monitoring capital
expenditures closely to maintain capital expenditures within the
planned amount of R$1.5 billion despite the devaluation of the

Tax Matters

On August 21, 2001, Embratel received two tax assessments from
the Brazilian tax authority (See Press Release dated August 24,
2001). The total amount of the assessments was R$501 million. The
first assessment was for R$342 million related to COFINS on
exportation of services. In this assessment, there were
mathematical errors by the tax auditor that resulted in
overstating the assessment by R$226 million. Aside from this, the
legal arguments supporting this assessment are not well founded
and hinge on an argument that Embratel does not provide
telecommunications services outside of Brazil. Accordingly, based
on opinions from our legal advisers, Embratel views the chance of
loss on this as remote.

The second assessment of R$159 million, was related to the
collection of PIS before 1995. In accordance with Complimentary
Law 7/70, Embratel offset credits for these PIS assessments.
Recent decisions by the Taxpayer Counsel and by the Superior
Court of Justice, support the deductibility of this tax credit.
Based on opinions from our legal advisors, Embratel views any
chance of loss on this assessment as remote.

On September 20, the company presented its administrative defense
for both assessments before the Federal tax authority (Delegacia
da Receita Federal de Julgamento), in accordance with article 151
of the Brazilian Tax Code (CTN), suspending the assessments until
the administrative litigation is complete. Embratel believes
these assessments can be cancelled or at least substantially
reduced at the administrative level. No provision was recorded
for these assessments.

Star One Launches Broadband Internet Services via Satellite

This quarter Star One launched the commercial pilot of broadband
Internet services via satellite. The service is directed to
medium and small companies (up to 10 PCs) and the residential
market located in areas untapped by broadband wireline and fiber.
The service is a partnership between Embratel (broadband),
UOL(Internet access) and Gilat (technology and equipment). In the
initial phase, the service is being provided in a simple format
with one Internet provider. In a second phase, the client will
have the flexibility to choose any Internet provider.

Also this quarter, Star One finalized the agreement with Alcatel
to acquire its first KU band satellite. This satellite, to be
completed in 2004, will enable Star One to meet demand for
broadband services, mainly Internet, as the above mentioned
service. The satellite will have 44 transponders and will be
launched in the 67(Degree)W orbital position covering the Andian
countries, Mercosur, Brazil and the US.

Embratel is the premier communications provider in Brazil
offering a wide array of advanced communications services over
its own state of the art network. It is the leading provider of
data and Internet services in the country. Service offerings
include: advanced voice, high-speed data communication services,
Internet, satellite data communications and corporate networks.
Embratel is uniquely positioned to be the all-distance
telecommunications network of South America. The Company's
network is has countrywide coverage with 28,868 km of fiber
cables comprising 1,068,657 km of optic fibers.

CONTACT:  Embratel Participacoes S.A.
          Investor Relations
          Silvia M.R. Pereira, (55 21) 2519-9662
          fax: (55 21) 2519-6388

          Press Relations
          Wallace Borges Grecco, (55 21) 2519-7282
          fax: (55 21) 2519-8010

FAZENDAS REUNIDAS: Files For Bankruptcy Protection
Mato Grosso-based Fazendas Reunidas Boi Gordo filed for
bankruptcy protection with a negative net worth of R$222.804
million, South American Business Information said in a report.

The company's liabilities were listed at R$780 million against
assets of R$500 million. According to the company, it will settle
all its debts but did not disclose how it will reverse its

Recently, management announced a plan to sack 300 employees or 20
percent of the total workforce in its attempt to settle a debt
with 1,200 investors in Brazil.

Fazendas Reunidas has 225,000 head of cattle and manages 111
farms, totaling 300,000 hectares. The company has been facing
financing difficulties due to the delay of CVM (Comissao de
Valores Mobiliarios) in approving the issuance of R$300 million
in debentures.

GAZETA MERCANTIL: Hires Worldinvest To Carry Out Restructuring
Currently dealing with a journalists' strike and a difficult
financial situation, the Gazeta Mercantil newspaper is going to
carry out a restructuring, Valor Economico reported Monday.
Accordingly, Gazeta has contracted Worldinvest consulting firm to
undertake the task.

The previous agreement with the Jornal do Brasil paper for
financial assistance has been suspended for two weeks, while
Worldinvest does its preliminary work.

The amount already advanced to the Gazeta from the Jornal do
Brasil is said to be R$2 million, which will be returned,
according to Gazeta owner, Mr. Luiz Fernado Levy.

GLOBO CABO: To Fire 1,000 Workers In Bid To Recover Losses
Struggling to cut costs in its bid to offset losses stemming from
a weakening currency and a drop in consumer demand, Globo Cabo
SA, Brazil's largest cable television operator, may fire at least
1,000 more workers, Bloomberg reported Tuesday.

According to Globo Cabo Chief Executive Luiz Antonio Viana, the
company may dismiss all workers in its call center unit and hire
a third party provider for the service.

The possible job cuts are in addition to the 1,600 dismissals
announced during the last quarter.

The company may also cut other "non-essential positions," Viana
said. "There are many jobs that can be outsourced. We may
outsource our call center," Viana said.

                              Marcio Minoru Miyakava, or
                              Luis Henrique Martinez
                              all of Globo Cabo S.A.
                              Rua Verbo Divino, 1356
                              Sao Paulo - SP - 04719-002 - Brazil
                              Phone: (5511) 5186-2681

PROLAGOS: Negotiating To Secure US$35M Loan From BEI
Prolagos, which finished last year in the red with defaults from
its customers running at 30 percent, is attempting to secure a
loan of US$35 million from the BEI (Banco Europeu de
Investimentos), South American Business Information said in a

The money would be used to finance public works projects planned
for next year in the area of expanding the water distribution
system, water collection and completing the sewage system in the
Regioa dos Lagos area of Rio de Janeiro state.

This loan will be the first from the BEI granted to a Brazilian
company. Once the loan is secured from the BEI, the next step
will be to find exchange rate protection in the form of a hedge
or swap.


AEROMEXICO/MEXICANA: Applauds Government's Airport Decision
Mexicana de Aviacion and Aeromexico, Mexico's two largest
airlines, hailed the government's decision on the location of the
new airport, Mexican financial daily El Economista revealed

Mexicana expects that by the time construction is completed on
the new airport in Texcoco, the airline will be in better
financial health and will be ready to make the necessary
investments to move its operations to Texcoco.

"It will be easier for the workers to move to Texcoco," said
Mexicana Vice President Antonio Martinez Salinas.

Aeromexico, on the other hand, said that the government's
decision would be good for the development of the aviation
industry in Mexico. The operation of only one airport will allow
for efficient connections, and optimized infrastructure and human
resources, said Aeromexico.

Aeromexico and Mexicana are owned by airline holding company

GRUPO DINA: Workers Lodge Protest Demanding Intervention
Over 200 Dina employees lodged protest in front of the Labor
Ministry office demanding the government's intervention to oblige
Dina to return them to work or liquidate their jobs according to
law, Mexican financial daily El Economista reported Tuesday.

According to union leader Lazaro Osorio, the company stopped
production and intends to lay off workers with only one month of
severance pay.

The union has given Dina the option of giving up its facilities
as part of its severance obligations.

Dina's plant, which is located in Sahagun, Hidalgo, closed due to
the decline in the sale of automobile parts.

MINERA AUTLAN: Cacho Expects Restructuring Efforts To Pay Off
Hecto Cacho, an executive at Mexican mining company Companhia
Minera Autlan, expects that the company's efforts to internally
restructure in order to generate sales, and its search for a
strategic partner, will allow it to resume its financial
obligations, Mexican financial daily El Economista said Tuesday.

The company, whose total debts have now reached 678.7 million
pesos, is considering several strategic partnerships, and is
studying ways to reduce its costs, including the viability of
retaining all of its workers.

Since last year, the Mexican mining industry has been affected by
the appreciation of the peso. Because most of the companies'
costs are in pesos, while their products are quoted in dollars,
the stronger peso has had an adverse affect, Cacho related. He
predicted a decline in exports of between 50 percent and 60
percent and said production at the company's five plants would
also be reduced.

Recent reports suggest that Minera Autlan, a magnesium exporter
based in Jalisco and Hidalgo, is now close to technical

SANLUIS: Nears Conclusion On Debt Refinancing
Refinancing of debt at SanLuis is now on the final stages and the
company is close to resuming payment of its financial
obligations, according to a report Tuesday in Mexican financial
daily El Economista.

The company expects partial change of ownership soon as it is
currently looking for a strategic partner. Management has already
hired a consulting company to conduct a study of the company's
situation and its alternatives for financing.

The company's debts as of June were US$550 million.

SanLuis is continuing to function, and no contracts have been
lost, said company officials. According to management sources,
the decline in this year's sales is due to the poor performance
of the automobile parts industry, on which the company relies

The company does not expect 2001 sales to reach the $552 million
achieved in 2000.


PESQUERA CAROLINA: Posts Sales Of US$12.7M In September
The Peruvian fishing company Pesquera Carolina, in the midst of
carrying out its restructuring plan, reported sales of US$12.7
million through September, South American Business Information
reported Friday.

The company said that the restructuring plan, which has the
backing of its creditors, is aimed at producing 44,000 tons of
fish flour and generating fish flour sales of US$17.3 million and
fish oil sales of US$2.2 million per year over the first 4 years.

Management sources confirmed that operations at Pesquera are
running at what it considers a normal level.

T R I N I D A D   &   T O B A G O

BWIA: Pension Surplus Settlement Expected To Finalize Shortly
The dispute over disbursement of a $116 million pension surplus
between aggrieved BWIA pensioners and the government is likely to
be settled within the next two weeks, according to Jerry
Hospedales, chairman of the board of "Old BWIA", or BWIA prior to

The Trinidad Guardian recalled Tuesday that state-owned "Old"
BWIA was privatized in February 1995, at which time the pension
distribution available for workers amounted to $195 million. From
that sum, Republic Bank Ltd, as trustee of the pension plan
purchased annuities from Barbados Mutual and Guardian Life to the
tune of $112 million.

Of the remaining $83 million, $52 million went to pension
enhancements and $30 million funded an early retirement plan.

The dispute arose over the disbursement of a $116 million surplus
that had accrued in interest and dividends on the original $195

Representative unions, the Aviation Communication and Allied
Workers Union (ACAWU); the Communication Transport and General
Workers Union (CATTU); the Superintendents' Association (ASA);
and the Trinidad and Tobago Airline Pilots Association (TALPA)
have said an agreement reached with Ken Valley, Minister in the
Ministry of Finance at the time of the privatization over the
disbursement, was wrongly interpreted.

What made matters worse was a split among the unions on how the
surplus should be shared.

Initially, they could not agree on a suggestion that the money be
divided equally among all categories of workers. TALPA, in
particular, argued for pilots to be treated separately from the
rest of the airline staff. They also wrangled with Hospedales
over the benefits to be paid to the different categories of

Those aged 50 and over were thought to have benefited most from
the initial payout, and so it was felt the under 50s should get
the bulk of the second disbursement. TALPA has this matter locked
in a court battle.

Meanwhile, their point was supported by Apex Consultants, the
plan's new actuaries, which noted previous actuaries, Buck
Consultants, had wrongly advised the management committee in the
period 1995-1997, leading to a calculation error in the benefits
to the under 50s.

Buck Consultants later acknowledged its original computation was
not "necessarily accurate" and re-calculation would result in
additional enhanced benefits to many of the members, aged 50 and
under, some of whom received zero enhancements under the original

Hospedales said he had studied the matter with great care and,
after an "Old" BWIA board meeting on Thursday, the feeling was
that a settlement was imminent.

He emphasized the delay in making a decision was due to the
complexity of the issue and the need to be properly guided before

Hospedales explained Apex had not deemed Buck Consultants to be
wrong, simply that there was a misinterpretation of the "Valley

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
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Information contained herein is obtained from sources believed to
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or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.

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