TCRLA_Public/011031.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

            Wednesday, October 31, 2001, Vol. 2, Issue 213  

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Setbacks Delay Resumption Of Operations
AEROLINEAS ARGENTINAS: Commences Intercontinental Flights Nov. 5
EPEC: Cordoba Suspends Privatization Indefinitely
FREDDO: Predicts Rebound In Operations, Market Share


B R A Z I L

CVRD: Copel Bid Stuns Analysts
EMBRAER: ERJ170 Seen As Direct Competition To Boeing, Airbus
SOLETUR: Bankruptcy Leaves Clients Hanging
VESPER: Reaching Agreement With Suppliers To Avoid Bankruptcy


C H I L E

EDELNOR: Likely To Default On December Bond Payment
EL INDIO: To Shut Down Permanently Mid-2002
MICHILLA MINE: Fires Workers, Suspends Projects On Weak Market


E C U A D O R

FILANBANCO: Clients Want Delay In Asset Liquidation


M E X I C O

ASARCO INC.: Suspending Zinc Operations in Tennessee
BANCRECER: Banorte Awaits Finance Ministry OK To Integrate
BANCRECER: IPAB To Recoup Less Than 10% Of Investments
CINTRA: Registers Losses In First 9 Months Of 2001
CONFIA: Defrauded Bondholders Still Seeking Solution
STANDARD AUTOMOTIVE: Announces Forbearance Under Credit Facility


P E R U

NUEVO MUNDO: BSCH Peru Returning Deposits To Clients


V E N E Z U E L A

SIDOR/AMAZONIA: Begins Debt Restructuring Talks With Creditors


     - - - - - - - - - - - -


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

AEROLINEAS ARGENTINAS: Setbacks Delay Resumption Of Operations
--------------------------------------------------------------
Aerolineas Argentinas' new owner, the Spanish airline Air Comet,
is struggling to lift the embargoes on its newly acquired unit.

According to a report in El Mundo, Spanish lawyers have gone to
several European and Latin American courts in order to negotiate
with creditors who are demanding payment in return for their
services or supplies.

But the most serious problem the company faces now is the
grounding of Aerolineas' 2 Boeing 747's in Brazil, as this could
jeopardize the resumption of operations at Aerolineas. Air Comet
must pay $1.5 million to Varig, the Brazilian airline, which is
responsible for the planes' maintenance, if it wants the aircraft
to fly again.

However, this payment should be an obligation of SEPI, the
Spanish state holding company and owner of Aerolineas until last
month. Although SEPI has sold its 92.1 per cent stake in the
Argentine airline, it has promised to pay wages owed to
Aerolineas' employees and to provide the working capital required
by the airline.


AEROLINEAS ARGENTINAS: Commences Intercontinental Flights Nov. 5
----------------------------------------------------------------
Argentine national carrier Aerolineas Argentinas is expected to
carry out its first intercontinental flight on November 5,
Expansion reported. Accordingly, the first flight will operate on
the Buenos Aires-Madrid route.

Up to this point, the airline had suspended 70 percent of flights
on international routes due to financial difficulties, which
forced it to suspend payments to creditors.

Union representatives have disclosed that Air Comet, Aerolineas'
new owner, has already made payments for backdated salaries,
which had not been paid. Despite the gesture, unions were still
unhappy with the decision to cut salaries by between 15 and 20
percent.


EPEC: Cordoba Suspends Privatization Indefinitely
-------------------------------------------------
Cordoba authorities decided to suspend for an indefinite period
of time the privatization of the EPEC electric company, EFE
reported Monday.

According to an official statement issued Monday by the
province's Public Works and Services Minister Carlos Caserio, the
company's privatization process was suspended due to the
recommendation of the foreign companies involved in the
operation.

Among these companies are, AES, from the United States;
Tractebel, from Belgium; and Union Fenosa, from Spain. Reports
have it that the companies' officials are apprehensive about the
crisis in the Argentine economy, which has been in recession for
40 months, and the possibility that the country could suspend
debt repayments.

Epec's privatization was scheduled for this year but now, the
process will remain suspended at least until 2003.


FREDDO: Predicts Rebound In Operations, Market Share
----------------------------------------------------
Ice cream chain Freddo is aiming to regain its presence in the
sector with a prediction to end this year with sales of US$24
million, La Nacion reported.

The chain, which was acquired by the investment fund The Exxel
Group in 1999, has been acquired by a trust fund headed by Banco
Galicia. Banco Galicia acquired the chain by capitalizing its
debt with the bank of more than US$30 million.

The new shareholders of the company have named Jose Guarracino,
one of the ex-owners of Freddo, as part of its management team.




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

CVRD: Copel Bid Stuns Analysts
------------------------------
Cia. Vale do Rio Doce's (CVRD) announcement to bid for Cia
Paranaense de Energia (Copel) caught analysts off guard, O Globo
revealed in a report.

Market analysts think that the company's decision doesn't fall in
line with its recent announcements of concentrating in mining and
logistic sectors.

However, CVRD believes that such investment is important as it
spends US$300 million per year on energy or 4.5 percent of the
Brazilian consumption.

Copel is scheduled to be privatized Oct 31. The minimum price of
the company was raised to 5.068 billion reals from 4.3 billion
after the government of the state of Parana bought back 90
percent of the common shares held by minority shareholders.

The government will auction 98.49 percent of common shares, which
corresponds to 52.2 percent of the company's total capital.

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


EMBRAER: ERJ170 Seen As Direct Competition To Boeing, Airbus
------------------------------------------------------------
As it continues to battle with the global aviation crisis,
Brazilian jet maker Embraer rolled out Monday its new 70-
passsenger plane, Reuters said in a report.

Embraer, which last month announced a series of cutbacks
resulting from a global crisis in the aviation industry, unveiled
the sleek ERJ 170 jet before clients and VIPs at its Sao Jose dos
Campos plant.

At $21 million a piece, the ERJ 170 will compete head-on with
Boeing's 717 and Airbus' A 318 jets, which are popular with the
regional air travel market.

Embraer said it already had 220 options and 110 firm orders for
the jet, which was launched commercially 28 months ago.

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

CONTACT:  Anna Cecilia Bettencourt
          +55 12 345 1106
          acecilia@embraer.com.br

          Milene Petrelluzzi
          +55 12 345 3054
          milene.petrelluzzi@embraer.com.br


SOLETUR: Bankruptcy Leaves Clients Hanging
------------------------------------------
Many consumers were left without answers following Soletur travel
agency's filing for voluntary bankruptcy, according to a report
Monday in the Gazeta Mercantil Online.

As a result, the Sao Paulo branch of the consumer
protection agency (Fundacao Procon-SP) published an official
notice outlining the rights of anyone who had contracted the
company's services. The notice stresses that "all appropriate
measures will be taken to minimize the consumers' loses."

In the note, Procon also disclosed that the values paid partially
or wholly by consumers who had not traveled will be the object of
analyses and evaluation together with the courts in Rio de
Janeiro so that a solution can be found that is fast and less
onerous for the consumers.

Soletur declared bankruptcy and shuttered its doors last week due
to a long-standing financial crisis worsened by the effects of
the September 11 terrorist attacks.


VESPER: Reaching Agreement With Suppliers To Avoid Bankruptcy
-------------------------------------------------------------
Brazilian phone company Vesper is expected to reach an agreement
with its suppliers Ericsson, Harris, Lucent and Nortel, wherein
these suppliers would waive 80 percent of Vesper's US$1.2 billion
in order to stave-off its bankruptcy, Valor Economico reported.

Additionally, 20 percent of Vesper' s debt, or US$240 million
will be acquired by Qualcomm, which has 16.2 percent stake in
Vesper.

The details of the deal will be announced by Vesper's CEO Luiz
Kaufmann during a meeting to take place at Florianopolis, Santa
Catarina state.



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C H I L E
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EDELNOR: Likely To Default On December Bond Payment
---------------------------------------------------
U.S. energy firm Mirant so far hasn't given any assurance that
next December 15 it will pay US$4.5 million to the bondholders of
Empresa Electrica del Norte Grande (Edelnor), South American
Business Information said in a report. Because of this, Edelnor
may well soon default.

There is another US$9 million coming due in March 2002.

Mirant has said it does not plan to commit any new capital to
Edelnor. The company added that since no immediate buyer was
identified and no new capital injection was planned for the unit.


EL INDIO: To Shut Down Permanently Mid-2002
-------------------------------------------
Toronto-based Barrick Gold is closing down permanently its
Chilean El Indio gold mine around the middle of 2002, Barrick
spokesperson revealed in a Business News Americas report.

According to Vince Borg, Barrick's corporate communications VP,
no more exploration would be conducted and production would come
to a halt by that time.

The closure of the mine had been first announced in September
1997, to take effect by 1999. However, Barrick extended its life
as costs were cut and more reserves found.

El Indio's 230 or so workers would be laid off gradually by the
time the mine closes, Borg said. Another 175 workers had been
made redundant in February this year.


MICHILLA MINE: Fires Workers, Suspends Projects On Weak Market
--------------------------------------------------------------
Due to poor market conditions, Chile's Antofagasta Plc is laying
off 100 workers at its Michilla mine and suspending new projects
elsewhere at least until 2005, Reuters reported Monday.

"The group is trying to be much more austere and in the case of
Michilla where we have high operating costs, we are doing
something exceptional," said Antofagasta's CEO Jean Paul Luksic.

Next April or May, the company will decide whether to shut down
the mine altogether or keep it running, he said.



=============
E C U A D O R
=============

FILANBANCO: Clients Want Delay In Asset Liquidation
---------------------------------------------------
The Ecuadorian banks agency was supposed to sell-off the assets
of Ecuadorian bank Filanbanco until next November 4, El Universo
reported. However, clients of the defunct bank are asking to
delay the process because the federal government has not held a
clear position about possible illegal procedures detected during
the start of the negotiations with private banks. Filanbanco's
clients fear that these problems will prevent bidders from taking
part in the auction.



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

ASARCO INC.: Suspending Zinc Operations in Tennessee
-----------------------------------------------------
Asarco Inc., a subsidiary of Grupo Mexico S.A. de C.V., Monday
announced plans to indefinitely suspend zinc mining and
processing operations at its Tennessee Mines Division by mid-
November as a result of low zinc prices, which have fallen by 30
percent over the last year.

Asarco informed employees and union officials of the decision,
following an extensive review of various options for the
division.

The suspension of zinc production, which will be phased in during
the next several weeks, will result in a reduction of
approximately 360 positions at the company's three zinc
operations in Jefferson County in eastern Tennessee. In late
September, the company notified employees that it was considering
taking action to curtail or suspend operations.

Asarco will assist eligible employees in securing all available
federal and state unemployment and training benefits. A small
crew will remain at the facilities in care and maintenance roles
and to continue processing agricultural lime from existing zinc
production byproducts.

According to Genaro Larrea, president of Asarco, the company
carefully considered a range of scenarios for the Tennessee zinc
operations. "The slowdown in the industrial manufacturing sector,
and in steel in particular, has resulted in higher worldwide zinc
inventories and lower prices," Larrea said. "At these prices, the
Tennessee facilities simply are not economically viable."

At the close of trading on Tuesday (Oct. 23), the cash price of
zinc on the London Metals Exchange (LME) was 34 cents per pound,
compared to 48 cents per pound on the same date in 2000. As
recently as 1997, LME zinc prices were in the range of 70 to 75
cents per pound.

In 2000, Asarco's Tennessee Mines Division produced 56,800 metric
tons of zinc contained in concentrates sold to zinc refineries in
the North American market. Zinc is used to galvanize iron to
prevent it from rusting. It is also employed in alloys and
batteries, and as a zinc oxide to stabilize rubber and plastics.

According to Larrea, Asarco employees in Tennessee have made
significant progress in improving operating efficiency and
reducing costs. "Unfortunately, these efforts have been masked by
the deteriorating market conditions," he said.

Larrea added that the company would continue to monitor the zinc
market and would consider resuming Tennessee Mines Division
operations should long-term market conditions improve.

Asarco, which recently moved its headquarters to Phoenix from New
York City, is a major producer of copper, zinc, gold, silver,
nickel and various specialty metals. The 102-year-old company is
a subsidiary of Americas Mining Corp. (AMC), established last
year as Grupo Mexico's mining division.

AMC is among the world's largest integrated mining and refining
companies and the third largest producer of copper. It includes
Grupo Mexico's interests in Asarco Inc. (100 percent), Minera
Mexico (98.8 percent) and Southern Peru Copper Corp. (54.2
percent). Minera Mexico, based in Mexico City, is the largest
mining company in Mexico and among the world's lowest cost
producers of copper, zinc and silver.

Southern Peru Copper Corp., based in Lima, also is among the
world's lowest cost copper producers.

CONTACT:  Asarco Inc., Phoenix
          Clay Allen, 602/977-6515


BANCRECER: Banorte Awaits Finance Ministry OK To Integrate
----------------------------------------------------------
Grupo Financiero Banorte will not be able to begin the process of
integrating Bancrecer's operations until December 5 pending
authorization from the Finance ministry said Banorte CEO Othon
Ruiz in a Mexico City daily Reforma report.

However, Banorte has already begun work on a plan to integrate
Bancerer when it receives authorization.

The most important factors in the coming integration will be the
leveraging of synergies and the reduction of costs for both
institutions, Ruiz said. The integration will eventually lead to
layoffs, but according to Ruiz, the company would make efforts to
relocate employees to high-growth areas.


BANCRECER: IPAB To Recoup Less Than 10% Of Investments
------------------------------------------------------
Out of 102.2 billion pesos invested in the reorganization of
Bancrecer, the Bank Savings Protection Institute (IPAB) expects
to recover close to 7.612 billion pesos, according to IPAB head
Julio Cesar Mendez in a Mexico City daily Reforma report.

"Of the (investment) in Bancrecer, we expect 7.612 billion pesos,
of which 1.65 billion pesos will refer exclusively to (Banorte's
purchase)," said Mendez.

The amount also includes funds from the sale of the Afore
Bancrecer Dresdner pension fund, for three times book value, to
Dresdner Bank Mexico, as well as close to 5 billion pesos that
IPAB expects to recover from the bank's loan portfolio of 35
billion pesos.


CINTRA: Registers Losses In First 9 Months Of 2001
--------------------------------------------------
Airline holding company Cintra posted net losses of 742 million
pesos during the first nine months of this year, compared to
profits of 694 million pesos recorded in the same period last
year, Mexico City daily Reforma reported Monday.

The losses were mainly the result of an 8.5-percent drop in
revenues, which stood at 21.933 billion pesos. The decline in
revenues resulted from last month's terrorist attacks in the US,
a domestic price war, and the slowdown in the U.S. and Mexican
economies, which led to lower passenger traffic.

Cintra owns Aeromexico and Mexicana, Mexico's two largest
airlines.


CONFIA: Defrauded Bondholders Still Seeking Solution
-----------------------------------------------------
More than two years has passed since a group of 650 defrauded
bondholders of Confia demanded the return of their money, but up
to now, a final solution still has not been reached, Mexico City
daily El Universal reported Monday.

Mexico's bank bailout agency IPAB said it is still in
negotiations with the disgruntled investors, but according to the
agency, their losses are not covered by deposit insurance.

Still, IPAB is communicating with the group, "and from there we
will determine their rights to the assets of the intermediary,"
said an IPAB source.

IPAB predecessor Fobaproa sold Confia to Citibank "without the
responsibility of the bondholders," said the source.

In 1999, the bondholders group accused Grupo Financiero Abaco-
Confia of fraud of 500 million pesos, allegedly committed by
employees.


STANDARD AUTOMOTIVE: Announces Forbearance Under Credit Facility
----------------------------------------------------------------
Standard Automotive Corporation announced Saturday that the
Company and its bank lenders under the Company's Term Loan and
Revolving Credit Facility ("Credit Facility") have entered into a
forbearance agreement expiring on January 31, 2002.

Pursuant to the forbearance agreement, the bank lenders have
agreed to refrain from exercising their rights and remedies under
the Credit Facility until such date with respect to the defaults
by the Company thereunder. The bank lenders maintain the ability
to exercise their rights and remedies under the Credit Facility
to the extent the Company defaults under such forbearance
agreement or at any time following the termination of such
forbearance agreement.

Standard Automotive Corporation is a diversified company with
production facilities located throughout the United States,
Canada, and Mexico. Standard manufactures precision products for
the aerospace, nuclear, industrial and defense markets; it
designs and builds remotely operated systems used in contaminated
waste cleanup; it designs and manufacturers trailer chassis used
in transporting maritime and railroad shipping containers; and it
builds a broad line of specialized dump truck bodies, dump
trailers, and related products. Through its Providence Group,
Standard provides engineering professional services to both
government and commercial industry.

CONTACT:  TEL:  212/286-1300  Investor Relations: Matt Burris
          TEL:  908/874-7778  Standard Automotive Corporation



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P E R U
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NUEVO MUNDO: BSCH Peru Returning Deposits To Clients
----------------------------------------------------
Peruvian bank BSCH Peru has started to return deposits to clients
of intervened bank Banco Nuevo Mundo after winning the contract
to handle the reimbursement process, Business News Americas
revealed in a report.

Accordingly, Peru will first reimburse deposits - up to US$60,000
per client - to the 10,000 clients that do not have debts with
Nuevo Mundo.

Reports last week indicated that some US$50 million would be
returned to Nuevo Mundo's clients.

Nuevo Mundo was intervened in December last year after former
President Alberto Fujimori's surprise run for shelter in Japan
triggered a deposit run on some smaller banks. The government
failed to sell the bank to the private sector and Nuevo Mundo
will be liquidated after deposits are returned.



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V E N E Z U E L A
=================

SIDOR/AMAZONIA: Begins Debt Restructuring Talks With Creditors
--------------------------------------------------------------
Venezuelan steelmaker Sidor and Amazonia, the international
consortium that holds 70 percent of the former, will seek to
restructure their debts, Argentine steelmaker Siderar revealed in
a Business News Americas report. Siderar is part of Amazonia with
a 19.8-percent ownership.

"Sidor and Amazonia will start negotiations with creditors and
entities controlled by the government of Venezuela aimed at
restructuring financial obligations," the Siderar statement said.

The statement blamed the move on the "global steel crisis,
weakened financial markets, the appreciation of Venezuela's
bolivar currency, and other adverse conditions." It did not say
how much debt was involved in total.

Sidor is currently halting production for a week per month
despite record production levels.

The remaining 30 percent of Sidor is owned by Venezuelan public
company CVG whilse Mexico's Tamsa and Hylsamex, Brazil's Usiminas
and Venezuela's Sivensa make up the Consorcio Amazonia.




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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