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/raid1/www/Hosts/bankrupt/TCRLA_Public/011029.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, October 29, 2001, Vol. 2, Issue 211 Headlines B O L I V I A LAB: Bolivia Wants VASP Chairman And Son Arrested B R A Z I L CLUB MED: Subsidiary Proceeding Despite Parent's Problems CVRD: Approves New Corporate Governance and Strategic Guidelines CVRD: Includes Electricity Generation As One Of Core Businesses CVRD: Acquisition of Sossego Project Confirms Copper Strategy SOLETUR: Files For Bankruptcy Protection VARIG: Delays Replacement Of Planes C H I L E COMPANIA MINERA: CVRD Still Contemplating Purchase TELEFONICA CTC: Financial Battle Still Far From Over TELEFONICA CTC: Trims Losses In First Nine Months Of 2001 M E X I C O AEROMEXICO/MEXICANA: Blames Terrorist Attacks For Worker Layoffs HYLSAMEX: Will Meet 2001 Debt Obligations Even Without Partner MEXICANA: Pilots Agree To Suspend Salary Increase To Save Jobs TRI-NATIONAL DEVELOPMENT: Company Profile P A N A M A CHIQUITA BRANDS: Company Profile P A R A G U A Y ANTELCO: Privatization Process Extended Until March P E R U AERO CONTINENTE: Plans To Expand Operations Next Year - - - - - - - - - - - ============= B O L I V I A ============= LAB: Bolivia Wants VASP Chairman And Son Arrested ------------------------------------------------- Bolivia demanded the arrest of Vasp Chairman Mr. Vagner Canhedo and of his son Mr. Ulisses Canhedo for allegedly applying illegal procedures in the management of LAB (Lloyed Aereo Boliviano), Jornal do Brasil reported Thursday. Vasp controls LAB with 50.37 percent interest since 1995. The Bolivian company has debts of US$50 million, losses of US$18 million and a net worth of US$60 million. According to market sources, the Bolivian authorities are pressuring Mr. Canhedo to sell off the shares he holds in LAB. =========== B R A Z I L =========== CLUB MED: Subsidiary Proceeding Despite Parent's Problems --------------------------------------------------------- The downfall of French resort operator Club Mediterranee didn't affect its Brazilian subsidiary, Club Med Brasil, according to a report Wednesday in Gazeta Mercantil. In fact, the subsidiary intends to proceed with its expansion plans, which include building a new hotel in Trancoso, Bahia state that will join other Club Med facilities in Rio das Pedras (Rio de Janeiro) and Itaparica (Bahia). The Trancoso project, which requires investments of approximately US$23 million, is expected to be completed by the end of 2002. Club Med Brasil accounts for 80 percent of the R$56 million turnover generated by its sisters in South America. CVRD: Approves New Corporate Governance and Strategic Guidelines ---------------------------------------------------------------- According to a company press release, the Board of Directors of Companhia Vale do Rio Doce (CVRD) approved a new corporate governance model and strategic guidelines to develop the Company's businesses. -- The new governance model clearly defines the roles and responsibilities of the Board of Directors and the Executive Board in the formulation of strategies and the running of the Company's businesses. The Board of Directors shall essentially focus on the analysis and discussion of the central questions related to the Company's future, without getting involved in operational matters, and ensuring that the Executive Board has more autonomy to act. -- The established strategic guidelines define the Company's action focus on the areas of mining, logistics and energy. They translate the aspiration to make CVRD a company with market value and total shareholder return at par with its main peers. -- The Executive Board, led by CEO Roger Agnelli, should focus its efforts on the challenge of devising action plans aligned to the strategic guidelines defined by the Board of Directors, so that targeted objectives can be achieved. -- CVRD's management model will drive the Company towards the objective of value creation. The Company's organizational structure and senior management are already defined and other key elements are under development to revise the main corporate processes and incentives. THE NEW CORPORATE GOVERNANCE MODEL CVRD's new governance model is built on the principles of transparency and stability needed to position CVRD on a clear growth and value creation path. -- It shall be the responsibility of the Board of Directors to define general company policies and guidelines, to evaluate the plans and projects submitted by the Executive Board, and to make sure that results are achieved. Company by-laws are being revised in order to define new autonomy levels and areas of responsibility meeting this orientation. -- To support the Board of Directors activities there will be five advisory committees: strategic, financial, governance and ethic, executive development, and auditing. The committees will be discussion forums where the visions of its members shall be examined. This shall help achieve greater maturity and alignment of the ideas presented to the Board of Directors, thus helping streamline the decision-making processes and improving decision making quality. -- The composition of each committee was established to ensure such principles as member competency, transparency, representativeness and independence. According to the nature of each committee, each will be made up of CVRD Board of Directors members, CVRD executives, as well as outside professionals without links to shareholders, who have a proven track record and knowledge in the specific areas of the Company's businesses shall participate in the committees. -- Key among the committees to be implemented is the Strategic Committee, which will conduct discussions related to the formulation of the Company's corporate strategy according to the growth and value creation goals and to the strategic guidelines and risk boundaries defined by the Board of Directors. The Strategic Committee shall be composed by the CEO, the Executive Director of Planning and Control and selected outside professionals. The Strategic Committee shall be led by the CEO. The presence of outside members and the non-representation of CVRD Board of Directors members in this committee illustrate the willingness to adhere to transparency and stability principles. STRATEGIC GUIDELINES The strategic guidelines approved by CVRD's Board of Directors are designed to guide the efforts of the Executive Board in the search, development and implementation of projects contributing to growth and value creation goals and bringing the Company to profitability and market valuation levels comparable to the CVRD main peers. -- Given the consolidation of the iron ore mining industry, CVRD should look to capture value through strategic positioning processes, favoring the strengthening of customer relations by vertically integrating in the value chain, deepening market penetration and diversifying the supply of products and services to the steel industry. -- CVRD should increase its participation throughout the aluminum value chain by expanding its bauxite and aluminum production capacities to meet the increasing global demand. At the same time, it should look to develop medium and long term strategic partnerships to place the Company's alumina output in the global market. -- In the copper business, CVRD should develop and exploit mining projects. It should look to develop medium and long term business partnerships with independent smelters to place the Company's future production of copper concentrate. Furthermore, CVRD must develop risk management mechanisms to hedge against copper price volatility and keep researching and prospecting new areas targeting reserve replenishment and expansion. -- The logistics area should represent one of the most significant opportunities for the Company to create value. To that effect, CVRD should increase the efficiency of its services and to capture value by managing services with greater added value. CVRD should further develop its abilities to act as a provider of integrated logistic solutions in the medium term. >From the definition of these guidelines it is expected that each business area should act with the methodological support from the Planning and Control area in prioritizing existing projects and developing new projects, all of which will be integrated into a corporate strategic plan. THE MANAGEMENT MODEL To ensure the integration and to coordinate the action of the various business areas, a new management model is under development to redesign the way business is conducted at CVRD, oriented towards growth and creation of shareholder value. The new management model should deal with the elements of corporate strategy, organizational structure, processes and management systems, personnel management and incentives in an integrated approach. A key element in the new model is the new structure of the Executive Board, which clearly defines the role played by the business and corporate areas. The business areas are responsible for development and business results within their sphere of action, while the corporate functions will focus on capturing synergies between areas by applying consistent practices for business planning, management and control. Key changes in the configuration of the Executive Board include: -- The strengthening of corporate functions with a restructuring of the Corporate Center and the resulting creation of three new Executive Boards: Planning and Control, Finance, Human Resources and Corporate Services. -- The configuration of the logistics area as a business area, separated from the Ferrous Minerals Executive Board, and the appointment of two new executive directors responsible for each one. -- The separation of the Non-Ferrous Metals area from Holdings into two executive boards and their reorientation under a business development approach. Aside from aluminum, the businesses initially assigned under the responsibility of this area should be prepared to foster new growth opportunities for the Company. These businesses would then become new executive boards, integrating with existing businesses if synergic, or they would be disinvested. Two new executive officers are being appointed for the Holdings and New Business Executive Directorship and Non-Ferrous Metals Executive Directorship. The executives integrating the Company's new senior management team were selected by the CEO and confirmed by CVRD's Board of Directors. Overall, the new team brings proven experience, expertise and a renewed willingness to face the challenges raised by this new phase in CVRD's history. The new management model's operational details are under development and should be widely discussed by the members of CVRD's new leadership team so that the model can be implemented as soon as possible. New value metrics should also be implemented to support the strategic planning process, so that the corporation's objectively-quantified goals and performance can be communicated to the market in a clear, transparent, dynamic and consistent way at each budgetary cycle. EXECUTIVE BOARD -- Roger Agnelli -- Chief Executive Officer of CVRD since July 2001. An economist, he was previously Chairman of the Board of Directors of CVRD, Director President of Bradespar S.A., Executive Director of Banco Bradesco and a Board of Directors member of several companies, like Companhia Paulista de Forca e Luz, Companhia Siderurgica Nacional, VBC Energia S.A. and Brasmotor S.A. -- Antonio Miguel Marques -- Executive Director of Businesses Development and Holdings. A mining engineer, he was previously Superintendent Director of Alcoa Mineracao, Superintendent Director of Paraibuna de Metais, Superintendent Director of Companhia Mineira de Metais and Superintendent Director of Votorantim Metais. -- Armando Santos -- Executive Director of Ferrous Minerals. A civil engineer, he has been with CVRD for 31 years, where he has assumed various roles such as Executive Director of the Ferrous Division, Sales Director and, most recently, President of Rio Doce America. -- Carla Grasso -- Executive Director of Human Resources and Corporate Services. An economist, since 1997 she has been responsible for the Directorship of CVRD's human resources, administration and information technology departments. Previously she occupied the post of Secretary of Complementary Security for the Brazilian Ministry of Social Security. -- Diego Hernandez -- Executive Director of Non-Ferrous Metals. A mining engineer, he was formerly President of Compania Mineradora Dona Ines de Collahuasi, in Chile. -- Gabriel Stoliar -- Executive Director of Planning and Control. A production engineer, he has been responsible since 1997 for the Executive Directorship of CVRD's Corporate Center and Investor Relations, having been formerly a Director of BNDESPAR. -- Guilherme Laager -- Executive Director of Logistics. A civil engineer, he was formerly Logistics and Supply Director for AMBEV. The appointment of the Executive Director of Finance is due to be announced shortly. Temporarily, Gabriel Stoliar will be responsible for Finance. CONTACT: Roberto Castello Branco: castello@cvrd.com.br +55-21-3814-4540 Andreia Reis: andreis@cvrd.com.br +55-21-3814-4643 Barbara Geluda: geluda@cvrd.com.br +55-21-3814-4557 Daniela Tinoco: daniela@cvrd.com.br +55-21-3814-4946 CVRD: Includes Electricity Generation As One Of Core Businesses --------------------------------------------------------------- The Board of Directors of Companhia Vale do Rio Doce (CVRD) has included electricity generation as one of its core businesses. As the Brazilian energy market becomes deregulated, CVRD intends to be a player in the wholesale market. The Brazilian electricity market presents good prospects. CVRD owns some of the basic competencies to thrive in the electricity generation business, like a successful track record in managing large projects and dealing with environmental protection issues. Additionally, centralized planning and management of the Company's own internal needs for electrical energy increases its ability to implement low risk generation projects, thus reducing capital cost. More specifically, the fact that CVRD Group is a large consumer of electrical energy makes it possible to enter into PPAs (Power Purchasing Agreements) that facilitate the access to long term funding, in the form of project finance. CVRD has an investment program in electrical power based on their rigorous economic evaluation criteria. The Company is currently involved in eight hydro-electrical power plants projects. Two of them are already under operation -- Igarapava and Porto Estrela -- and the remaining six are in different stages of construction. CVRD's estimated investment in the eight plants is US$ 503.5 million, with a participation in the total installed potency equivalent to 1,007 MW. CVRD considers the acquisition of a stake on Companhia Paranaense de Energia -- COPEL, an opportunity with good potential to anticipate and to increase expected earnings from its energy investment plan. The Company's interest is solely on the electricity generation assets. Consequently, CVRD qualified to participate in the auction of COPEL through a special purpose company. However; the decision to bid for COPEL will depend on the result of the studies being conducted regarding to the expected return on investment and the structure of the transaction. CVRD: Acquisition of Sossego Project Confirms Copper Strategy ------------------------------------------------------------- The Sossego project, control of which was acquired Wednesday by Companhia Vale do Rio Doce (NYSE: RIOpr) (CVRD), has an estimated 313 million tons in copper ore reserves, with a 1.02% copper content and 0.3 grams of gold per ton. This open-pit mining project -- among the most competitive in the global copper mining industry -- has an estimated capex cost of nearly US$ 2,800 per ton of annual production capacity and estimated cash production cost of approximately US$ 0.32 per pound of copper concentrate. The Sossego project is expected to start copper and gold production by mid-2004, with an annual capacity of 140,000 tons of high-grade copper concentrate and 3 tons of gold. Sossego will be CVRD's first copper project to begin production in Carajas, in the north of Brazil, where CVRD has four other copper projects -- 118, Cristalino, Alemao and Salobo -- all of which are in various stages of development and slated to start production between late 2004 and 2007. In addition, CVRD is prospecting 200 anomalies that have been identified by Company geologists and that are likely to contain copper deposits. Copper mining investments are an integral part of CVRD's strategy being a profitable growth opportunity. CVRD's mine production in Carajas will help modify Brazil's trade position, from a copper importer -- US$ 310 million in 2000 -- to a net exporter. It will position CVRD as one of the leading global producers. SOLETUR: Files For Bankruptcy Protection ---------------------------------------- One of Brazil's largest and most traditional travel agencies finally cedes to economic pressure. According to a report Thursday in O Globo, travel agency Soletur, with R$30 million in debt, filed for bankruptcy protection from creditors on Wednesday. Soletur has been battling with financial problems since 1999 when the government let the value of the real float freely against the dollar and the company needed to finance itself in the international market. Despite having carried out a restructuring process, the company failed to stabilize its accounts. The energy crisis and the terrorist attacks in the US, which hit sales heavily, later added up to the company's already grave situation. The company said that the number of passengers to the US fell from 800 per week to zero following the terrorist attacks in New York and Washington. The bankruptcy filing will affect about 7,000 customers who had already paid for tourist packages. Carlos Alberto Amorim Ferreira, chairman of Abav-RJ, the Rio de Janeiro division of the Brazilian travel agency association, urged the sector to join forces with airlines and the government in order to help Soletur's customers and save the reputation of the national tourism system. According to Mr. Ferreira, the government should give more incentives to the tourism sector. VARIG: Delays Replacement Of Planes ----------------------------------- Brazilian air transportation company Varig decided to delay for some months receiving four Boeing 737-800's that the US company was supposed to deliver late this year, O Estado de Sao Paulo reported Thursday. The company, which has been planning to remove 13 737-200 models from its existing fleet, made the decision as it struggles to conform to the new aviation reality worldwide. CONTACT: VARIG Brazil Media Relations 21-3814-5480 ========= C H I L E ========= COMPANIA MINERA: CVRD Still Contemplating Purchase -------------------------------------------------- Brazilian iron and steel company Cia. Vale do Rio Doce (CVRD) is eyeing multinational Exxon Mobil's Chilean subsidiary, Compania Minera Disputada de las Condes, EFE reported Thursday. Buying the copper mine is part of CVRD's strategic plan to meet greater copper demand expected in the next few years, according to the Brazilian company's president, Roger Agnelli. Agnelli said that his company has already hired the services of the firm Goldman Sachs to appraise the Disputada mine. He declined to say how much CVRD is willing to invest in the project. Exxon is putting the copper mine up for sale in the next few weeks. TELEFONICA CTC: Financial Battle Still Far From Over ---------------------------------------------------- When Bruno Philippi took over as chairman of Telefonica CTC Chile in March, he had only one mandate -- to reverse two years of losses at the telephone company. However, according to a Bloomberg report released Thursday, Philippi only accomplished part of that mandate as reflected in the company's third quarter results. But then, the numbers at least show that the company is improving although there's still a long way to go. The company, under Philippi's leadership, implemented cost cutting measures, which helped it return to profitability, breaking five straight quarterly losses that included a 34.9- billion-peso loss in the third-quarter 2000. But even if profits are higher, revenue is unlikely to recover much after the government in May 1999 lowered the former state- run monopoly's local calling fees for five years, stalling growth in its principal business. Mobile telephone service sales, which once boosted revenue, have also stalled. Analysts say it looks unlikely Telefonica CTC will return to the average 17 percent growth in revenue it registered in 1997 and 1998, a time when mobile services grew and the company faced less competition and earned higher fees for local services. Estimates by Larrain Vial SA indicate that revenue will grow 3 percent this year, compared to last year's 4 percent drop. The global slump in orders for telecommunications equipment and services may also make the task harder for Philippi. "The outlook is difficult and there aren't any miracles." Philippi said recently. According to analysts, even if cost cutting and sales of non- essential assets help restore profit, he still faces a rocky road rebuilding revenue. "I don't expect mobile to have a good rebound," said Barbara Angerstein, an analyst at Celfin SA. "And I don't see where they can get growth with the fixed line service." TELEFONICA CTC: Trims Losses In First Nine Months Of 2001 ---------------------------------------------------------- Telefonica CTC Chile reduced its net loss during the first nine months of this year to 9.392 billion pesos, compared to the figure posted in the same period a year ago, which was 43.558 billion pesos, Reuters reported Thursday. The smaller losses reflected a third-quarter net profit of 8.939 billion pesos, excluding extraordinary items, helped by a cost- cutting restructuring program, the company revealed in a statement. The loss was in line with the average forecast by analysts surveyed by Reuters, which had pegged the company's losses at 9.322 billion pesos. The firm reported a nine-month operating profit of 97.741 billion pesos, up 2.7 percent from 95.165 billion pesos in the same timeframe in 2000. =========== M E X I C O =========== AEROMEXICO/MEXICANA: Blames Terrorist Attacks For Worker Layoffs ---------------------------------------------------------------- Leading Mexican airlines Aeromexico and Mexicana are contemplating layoffs due to the losses they have incurred after suspending flights to the US a month ago, Mexico City daily Reforma reported Thursday. Aeromexico, which has a total of 7,000 workers, said it is considering the layoff of up to 1,400, but Mexicana didn't reveal how many it was going to sack. Aeromexico Director Alfonso Pasquel revealed that the airline lost 4 million dollars during the four days that flights were cancelled. Mexicana, on the other hand, lost $12.5 million because of the cancellation of 80 daily flights to the United States and Canada, according to spokesperson Fernando Martinez. 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 HYLSAMEX: Will Meet 2001 Debt Obligations Even Without Partner -------------------------------------------------------------- Mexican steel maker Hylsamex, which had debts of 17.466 billion pesos at the end of the third quarter, confirmed it is going to pay off debts due this year, even if it has not found a financial partner by that time, Reuters reported Thursday. "The projections for cash flow allow for the commitments for the rest of this year to be covered without problems," suggested Enrique Flores, spokesman for conglomerate Grupo Alfa. Hylsamex is a unit of Alfa. That includes interest and principal on $50 million due this year, Flores said. The announcement came amid analysts' speculations that company might not be able to meet its debt payment obligations as it struggles with effects of an international steel glut depressing prices and the rising cost of energy. Previously, Hylsamex announced it would consider giving up a controlling interest in the company to a partner willing to inject capital and help meet debt requirements. But Flores said it was unlikely to reach such an agreement this year. At the same time, Flores revealed that Hylsamex is in close contact with creditor banks in an effort to extend terms of short-term loans. "We are in the process of revising financial situations with creditor banks," he said. MEXICANA: Pilots Agree To Suspend Salary Increase To Save Jobs -------------------------------------------------------------- In an effort to retain their jobs and to help airline Mexicana de Aviacion SA overcome a drop in passenger traffic as a result of the terrorist attacks, Mexican pilots agreed to postpone for six months a 7.8 percent wage increase, Bloomberg reported Thursday. In addition, the pilots also offered to donate their overtime pay in order to help pay part of the salaries of 135 pilots Mexicana would have dismissed. "The severe market contraction, the reduction in the number of flights and routes, has led to an excess of pilots and so to avoid seeing any of them lose their jobs we reached an accord," the Mexican Pilots' Association said in a statement. Among Mexico's largest airlines, Mexicana is the carrier likely to suffer the most from the slowdown in air travel. The airline has reduced the frequency of its flights by 15 percent to lower its operational costs. "With all these measures we are securing the future of the company so that it can remain afloat," said Fernando Martinez, a Mexicana spokesman. TRI-NATIONAL DEVELOPMENT: Company Profile ----------------------------------------- NAME: Tri-National Development Corp 480 Camino Del Rio S., #140 San Deigo, California 92108 TELEPHONE: 619-718-6370 FAX: 619-718-6377 WEBSITE: http://www.tri-national.com/ INVESTOR RELATIONS: Jason Sunstein/Main Office Email: jason@adnc.com TYPE OF BUSINESS: Tri-National Development Corp. is an International Real Estate Development and Management Company publicly traded under the symbol, TNAV. The Company is a fully reporting Wyoming corporation and is headquartered in San Diego, California. The Company's projects include current and projected developments in Mexico, the United States, and Canada, with a current focus on large scale multi-use developments in Northern Baja, Mexico, approximately 45 miles south of the San Diego border. SIC: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] TRIGGER EVENT: Tri-National filed a voluntary Chapter 11 bankruptcy petition in the San Diego Bankruptcy Court because it didn't have cash to satisfy the claims of its creditors. PRES./CEO: Michael A. Sunstein CFO: Gilbert Fuentes VP, LEGAL COUNSEL: Paul G. Goss, Esq. ATTORNEY: Colin W. Wied, Esq. FIRM: C.W. Wied Professional Corporation 501 West Broadway, Suite 1780 San Diego, CA 92101-3568 Telephone: Direct dial: 619-338-4024 Facsimile: 619-338-4022 URL: http://www.cwwied.com Web Site: http://www.lawyers.com/cwwiedpc Last TCRLA Headline DATE: Friday, October 26, 2001, Vol. 2, Issue 210 To see company's financial statements: http://www.bankrupt.com/misc/TRI_NATIONAL.pdf =========== P A N A M A =========== CHIQUITA BRANDS: Company Profile -------------------------------- NAME: Chiquita Brands International Inc. 250 East Fifth Street Cincinnati, OH 45202 PHONE: (513) 784-8000 FAX: (513) 784-8030 EMPLOYEES (last reported count): 30,000 WEBSITE: http://www.chiquita.com/ TYPE OF BUSINESS: Chiquita Brands International Inc. is an international marketer, producer and distributor of quality fresh fruits and vegetables and processed foods sold under the "Chiquita" and other brand names. SIC: AGRICULTURE PRODUCTION - CROPS [0100] TRIGGER EVENT: The company plans to restructure under the protection afforded through the Chapter 11 bankruptcy code about $861 million of public debt after suffering losses of more than $1.5 billion over eight years during a dispute with the European Union over EU banana imports from former European colonies. PRES./CEO/DIRECTOR: Steven Warshaw CFO/SR.VP: James Riley +1-513-784-6307, DIRECTOR OF INVESTOR RELATIONS: William T. Sandstrom +1-513-784-6366 Last TCRLA Headline DATE: Friday, October 26, 2001, Vol. 2, Issue 210 To see company's financial statement: http://www.bankrupt.com/misc/Chiquita.pdf =============== P A R A G U A Y =============== ANTELCO: Privatization Process Extended Until March --------------------------------------------------- The Paraguayan Reform Secretariat says that the privatization process of government-owned telephone company Antelco has been extended until March 2002, EFE reported Thursday. Antelco was supposed to be auctioned in December but according to the agency, the schedule was changed due to the complexity of the privatization process and to the requests made by companies interested in its purchase. The document containing the terms and conditions was submitted on Monday, and 13 companies from several counties, including Argentina, Brazil, Uruguay and the United States, have until Novemnber 19 to pose questions. The pre-qualification stage begins on November 26 and envelopes with the bids will be opened on March 7, 2002, an Antelco spokesperson said. Among the firms that have expressed interest in the process are: Paraguay's Telecel (associated with U.S.-based Millicom), Spain's Telefoonica, Paraguay's Personal, U.S.-based AES Corporation, Hong Kong's Hutchinson, Paraguay's Coinsa, Brasil Telecom, Paraguay's Consorcio de Empleados de Antelco, Telecom Argentina and Uruguay's Antel. Joining the running in recent days are Paraguay's Rieder, Argentina's IMPSAT and Paraguay's Consorcio de Beneficiarios Inscritos de la Opcion Preferencial. The "preferential option" is a benefit that Peru's constitution guarantees to officials, suppliers and other industries linked with the company to assure their portion of the company's shares, once it goes private. ======= P E R U ======= AERO CONTINENTE: Plans To Expand Operations Next Year ----------------------------------------------------- Peruvian airline AeroContinente expects to increase its market presence and geographic reach next year, Gestion reported Tuesday. Under the plan, the airline will open subsidiaries in Argentina, Bolivia, Venezuela, Dominican Republic and the United States. According to AeroContinente, expansion will be based on franchising. The company's primary goal is to cover part of Mercosur, reaching further into the Andean market. 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 240/629-3300. * * * End of Transmission * * *