TCRLA_Public/011102.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, November 2, 2001, Vol. 2, Issue 215



ALTO PALERMO: S&P Downs Sr. Debt, Credit Ratings; Outlook Neg.


CVRD: Clarifies EU Commission's Approval of CAEMI Acquisition
CVRD: Plans $2B Worth Of Energy Generation Investments
EMBRATEL: Yet To Decide On Local Telephony Service
VARIG: Crisis Deepens With GE Capital's Demand For Debt Payment


AVIANCA: Predicts Profitability After Merger With Aces
VALORES BAVARIA: Gets Cash Injection From Bavaria
VALORES BAVARIA: Analysts Skeptical About Restructuring Plans


AEROMEXICO/MEXICANA: Government Aid Would Cover Insurance Costs
AEROMEXICO: To Lose $160M In 4Q Due To Drop In Passenger Demand
BANCA QUADRUM: Has Until Mid December To Decide Its Fate
BANCO ATLANTICO: IPAB Board To Review Bital-Atlantico Deal
GRUPO DINA: Severence Pay May Never Come, Employees Fear
ICA: Selling Assets To Reduce Debts By $160 Million


ANTELCO: Privatization Draws One More Bidder

T R I N I D A D   &   T O B A G O

YORK RESEARCH: Company Profile

     - - - - - - - - -


ALTO PALERMO: S&P Downs Sr. Debt, Credit Ratings; Outlook Neg.
Standard & Poor's lowered its senior unsecured debt and corporate
credit ratings on Alto Palermo S.A. (APSA) to triple-'C'-plus
from single-'B'. The ratings were removed from CreditWatch, where
they placed Oct. 23, 2001. The outlook is negative.

The downgrade follows the recent collapse in shopping mall retail
sales, reflecting poor prospects for the industry in the medium
term. This might further deteriorate APSA's financial profile and
not allow the company to reduce its high exposure to short-term
debt while the credit environment in Argentina continues to

APSA is a real estate company that owns, leases, operates,
develops, and acquires shopping centers in Argentina.
Additionally, APSA has developed a credit card operation,
Tarshop, started in late 1998. The ratings on APSA reflect the
inherent volatility of the Argentine real estate sector and the
lack of geographic diversification in APSA's operations. In
addition, given the recession that Argentina has been facing
since 1999, the company's ability to collect has been
deteriorating and might further deteriorate given the further
weakening of retail sales in the last two months. Although more
than 80% of APSA's total debt with third parties matures in 2005,
the remaining share of the debt, characterized by its very short
maturities, poses increasing refinancing risks given current
credit market conditions. These negative factors are partially
offset by the company's strong market position, the strategic
locations of its shopping centers, and the growth potential for
this sector in Argentina in the longer term.

Despite the recession that has been facing the Argentine economy,
various financial measures have slightly improved although not
enough to offset increasing industry risk. Capital structure is
relatively weak given current economic conditions with debt to
capitalization of 40.2% for fiscal 2001 compared to 38.7% in 2000
and 46.5% in 1999. During January 2001, the company placed a
four-year $120 million bond used mainly to refinance short-term
maturities, somewhat improving the financial profile and
lengthening the maturity schedule. However, this debt bears
variable interest rates linked to highly volatile local reference
rates, exposing APSA to breach of covenants if EBITDA growth does
not offset the growth of interest rates. EBITDA margins improved
to 60.1% in fiscal 2001 from 53.2% in fiscal 2000, but are still
lower than in 1999. The poor performance of the industry might
lead APSA to strongly increase marketing expenses to maintain
attendance to the malls, further affecting EBITDA. For 2001,
EBITDA interest coverage was 2.1x compared to 2.0x in 2000 and
2.9x in fiscal 1999 mainly due to the strong increase in interest
expenses. Funds from operations to total debt have improved
slightly to 20.5% in 2001 compared to 18.2% in 1999.


The outlook on Alto Palermo mirrors the outlook on the ratings of
the Republic of Argentina, which indicates that those ratings
could be lowered again if political and social tensions frustrate
the government's efforts to keep the fiscal situation under
control. Further capital outflows could cause additional strain
and continue to undermine prospects for growth, as they severely
impair domestic credit. The outlook also reflects the effects
that low consumer confidence, the severe local credit crunch, and
the global economic slowdown, may continue to have on GDP growth
and the fact that the economy shows no signs of stabilizing.

Analyst: Pablo Lutereau, Buenos Aires (54) 114-891-2125


CVRD: Clarifies EU Commission's Approval of CAEMI Acquisition
Regarding news released by the press concerning statements
attributed to Companhia Vale do Rio Doce's (NYSE: RIOpr) CEO
Roger Agnelli about the course of action that will follow the
approval given by the European Commission for the acquisition of
Caemi Mineracao e Metalurgia S.A. (Caemi), CVRD would like to
inform that:

CVRD and Mitsui & Co. Ltd. (Mitsui) will acquire Caemi, and will
jointly control it. Each will own 50% of Caemi's common shares.

Once the transaction is concluded, the percentage of Caemi
preferred shares owned by CVRD and Mitsui might be equalized at
50% for each through the acquisition by CVRD of Caemi shares
owned by Mitsui.

Caemi's delisting was not considered. Therefore, there is no
decision about this issue or about the acquisition of Caemi
preferred shares from minority shareholders.

First of all, CVRD and Mitsui will conclude the acquisition of
the Caemi common shares from its current controlling

CONTACT:  Roberto Castello Branco:

          Andreia Reis:

          Barbara Geluda:

          Daniela Tinoco:

CVRD: Plans $2B Worth Of Energy Generation Investments
Roger Agnelli, Companhia Vale do Rio Doce (CVRD) chairman,
announced that the Brazilian mining group is planning to invest
$2 billion in electricity generation projects over the next six
months, O Globo reported.

According to the executive, CVRD will continue to analyze every
good business opportunity that arises and that the group will bid
for at least four concessions to build and operate hydroelectric
power plants in the country.

EMBRATEL: Yet To Decide On Local Telephony Service
Purificacion Carpinteyro, Embratel regulatory affairs vice
president, disclosed that Embratel is still undecided about
whether to offer local telephony service next year, Business News
Americas reported Wednesday.

However, the company will make a final decision after concluding
local loop unbundling negotiations with local operators and after
regulator Anatel has published the final rules governing new
entrants and the provision of new services by incumbents in the
2002 market.

Fixed line operators that meet this year government mandated
coverage goals set for 2003 will be allowed to compete in new
operating areas and provide new services, such as long distance.
Intelig and Embratel on the other hand, are eager to provide
local service to their business clients.

Embratel would need to sign unbundling agreements with fixed line
operators in order to offer local service. The possibility of
building its own infrastructure is "out of the question,"
according to Carpinteyro, adding that it would cost far more than
leasing capacity from fixed line operators.

"The war on unbundling is not over. We are waiting for something
to happen," Carpinteyro said.

Embratel began unbundling negotiations with the country's three
incumbent fixed line operators Telemar, Telefonica and Brasil
Telecom in May of 2000, with a view to offer value-added services
such as broadband Internet over DSL to end users. However, the
discussions were never finalized and Anatel did not intervene to
establish firm rules, she said.

To see company's financial statements:

VARIG: Crisis Deepens With GE Capital's Demand For Debt Payment
The financial crunch at Brazilian flagship airline Varig gets
even worse as it faces pressure from GE Capital to pay its $200
million debt, BBC News said in a report Wednesday.

The debts are on account of aircraft leases by Varig.

"The outlook was already bleak and the terrorist attacks only
made it worse," Varig President Ozires Silva said last week
concerning the financial situation of his company, which is $1.25
billion in debt.

The airline, which has only made a profit once in the last 10
years, was already struggling before the US attacks because the
Brazilian real's slide against the dollar had pushed up the cost
of jet fuel and aircraft leasing.

Results for the first half of this year show Varig lost $204
million, a record loss due largely to the higher cost of
servicing its balooning debt.

After the US attacks, Varig laid off 1,700 employees, or roughly
10 percent of its workforce, reduced its fleet by 8 percent and
dropped expansion plans for more flights to the US.

          Media Relations


AVIANCA: Predicts Profitability After Merger With Aces
Roberto Junguito Jr., Valores Bavaria's vice-president for
investment, is optimistic that the company's subsidiary, Avianca,
will become profitable, particularly if regulators approve the
company's plan to merge with Aerolineas Centrales de Colombia SA
(Aces), Colombia's second biggest airline, Bloomberg reported

Junguito said though he believed Avianca was capable of becoming
profitable on its own, "a turnaround with ACES will be much

However, according to Junguito, the airline still needs an
additional cash injection of between $50 million and $80 million
some time this year, in large part to help cope with a worldwide
decline in air traffic after the Sept. 11 terrorist attacks in
the U.S.

Some analysts say Valores has little option but to try to turn
Avianca around. Declining traffic and rising losses in the
airline industry worldwide makes it difficult to sell the

"I think Avianca has been on their sell list for quite some time
-- if they could find a buyer," said Rue Swabey, an analyst with
Santander Central Hispano Investment.

VALORES BAVARIA: Gets Cash Injection From Bavaria
Struggling Colombian conglomerate Valores Bavaria obtained a
crucial cash injection from related brewer Bavaria on Wednesday,
Reuters reported.

Accordingly, profitable brewer Bavaria injected $350 million into
the company by generously buying Valores Bavaria stock. The deal
was approved on Tuesday by shareholders from Valores Bavaria and
owners of Bavaria stock -- with the only dissenting vote from the
brewer's workers' union.

According to Leonor Montoya Alvarez, Valores Bavaria president,
the funds would help Valores Bavaria's debt profile

However, according to the company, there's still a need for it to
shed smaller firms and merge its indebted airline Avianca to cut

Montoya disclosed executives were reevaluating the holding
company's investment portfolio of some 100 firms.

"We have made a very important, serious, very conscientious
analysis of our investment portfolio," Montoya said. "We will be
concentrating on those companies we believe can generate more
value for shareholders. We are thinking about getting out of

Montoya said Valores Bavaria was interested in selling small
firms including food maker Productor Comercializador de
Alimentos, security firm Vise Inc., temporary employment firm
Serdan, and shedding a minority stake in telecommunications firm

VALORES BAVARIA: Analysts Skeptical About Restructuring Plans
Analysts expressed uncertainty regarding Valores Bavaria's plans
to sell assets and swap debt for equity in order to help it cover
losses without borrowing more money, Bloomberg reported

After third-quarter losses rose 10-fold to almost 123 billion
pesos ($53 million), Valores may need to seek additional funds
within 12 months, they say.

"At some point, they're going to have to find another source of
income to stabilize their finances," said Sandra Hurtado, an
analyst with Multivalores SA. "Much of this company is not

Since the start of the year, the holding company's shares have
fallen 66 percent.

Losses may mount even more if Valores doesn't press ahead with
plans to sell some its holdings, said Carolina Forero, an analyst
with Bogota-based Corporacion Financiero Del Valle.

"If they get rid of problematic companies, then this could be
really good," said Forero.


AEROMEXICO/MEXICANA: Government Aid Would Cover Insurance Costs
A proposal that would help meet additional insurance costs
against risk of war and terrorism being paid by the Mexican
airlines Aeromexico and Mexicana is now in the hands of the lower
house finance committee, Reuters reported Wednesday.

The Mexican government sent the proposal to the Congress on
Wednesday in order to provide $107 million to save the countries'
airlines, which are struggling in the aftermath of the Sept. 11
aerial attacks in the United States.

"The (government and airlines) face two alternatives: cover the
difference in cost in insurance fees or stop operating," Mexico's
lower Chamber of Deputies said in a statement.

Aeromexico and Mexicana together have 80 percent of the Mexican
air travel market, with the bulk of flights traveling to U.S.
destinations. They are controlled by holding company Cintra ,
which is majority held by the government.

          Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or

          Jenny Jenks, Marketing Director, International
          Division of Mexicana Airlines, +1-210-491-9764, or

AEROMEXICO: To Lose $160M In 4Q Due To Drop In Passenger Demand
Due to a slump in passenger demand, Aeromexico is expected to
post losses of $160 million in income in the fourth quarter,
revealed airline executive Francisco Cervantes in Mexican
financial daily El Economista report.

According to Cervantes, it will take "at least seven months" for
passenger demand to recover to levels seen before the September
11 terrorist attacks, he said, and "while this uncertainty
continues, people will not travel, mainly in international
traffic to the United States."

In September alone, Aeromexico lost out on $40 million, and
"October and November don't look very positive. We have planes on
the ground, reductions in personnel and costs cuts," said
Cervantes, who is also head of the National Chamber of the Air
Transport Industry (Canaero).

BANCA QUADRUM: Has Until Mid December To Decide Its Fate
Banca Quadrum has until December 15 to decide whether it has the
necessary resources to finance itself, as advised by the Mexican
financial regulator the National Banking and Securities
Commission (CNBV), Mexico City daily Reforma reported Wednesday.

Quadrum needs between $35 and $69 million, according to estimates
by analysts.

"Currently, Quadrum has all of the information necessary for its
shareholders to decide for or against the financing of the
institution," said CNBV official Pablo Escalante. "They have
until more or less December 15 to make a decision and bring in
the financing," he said.

Deteriorating finances, which resulted in Quadrum's inability to
maintain the required levels of financing and preventive
reserves, led the CNBV to intervene in the bank at the end of

BANCO ATLANTICO: IPAB Board To Review Bital-Atlantico Deal
Mexico's bank bailout agency IPAB is expected to present to its
board of directors the deal for Grupo Financiero Bital's
acquisition of Banco del Atlantico, Mexico City daily El
Universal reported Wednesday.

Subsequently, IPAB will confirm the total cost of Atlantico's
reorganization estimated to be 13 billion pesos.

Under the agreement, IPAB will pay for 80 percent of the
reorganization, and Bital will pay for the remaining 20 percent.

According to Bital executives, the company is in talks with GE
Capital and ING Baring, while its agent, Credit Suisse, is
looking for more alternatives to provide Bital with financing.

Banking sources said it was possible that several Mexican
institutions, including Banorte, Scotiabank-Inerlat and Santander
could provide additional financing.

GRUPO DINA: Severence Pay May Never Come, Employees Fear
Apparently, the 506 employees of Dina Trucks may be just waiting
for nothing. According to a report in Mexican financial daily El
Economista, neither the company nor the Labor ministry see any
resolution to a 3.5 million peso payment Dina owes to the workers
as severance pay.

So far, the company has offered the union the option of property
or money to be paid after production begins at a new industrial
park, said union head Juan Carlos Castillo Cruz. But the union
shunned the offers on the grounds that the company should be able
to pay the debt with a recently-received bank loan.

"The position of the union is that when we arrive at a
liquidation plan, it must be cash in a one-time payment," said

ICA: Selling Assets To Reduce Debts By $160 Million
In a bid to cut its total debt to $500 million from nearly $660
million in the fourth quarter, Mexico's biggest construction
company Empresas ICA Sociedad Controladora SA de CV (ICA) is
going to put assets on the block, Reuters reported Tuesday.

"We are increasing our efforts to raise asset sales," said Jose
Luis Guerrero, financial director at ICA.

At the end of the third quarter, ICA's total debt stood at 6.359
billion pesos, 1.382 billion pesos lower than in the same period
of 2000. Some 43 percent of the company's debt has a one-year
maturity, which is why the firm is in the process of
renegotiating the terms of its debt with its creditors, Guerrero


ANTELCO: Privatization Draws One More Bidder
Brazilian telecommunications group Brasil Telecom is thinking
about taking part in the privatization of the Paraguayan fixed
telephony operator Antelco, according to a report Tuesday in O

Antelco, which has 297,000 lines, is scheduled for privatization
in March 2002. Other potential bidders for the telephony operator
are Telecom Argentina, France Telecom, Telefonica and Hutchinson.

T R I N I D A D   &   T O B A G O

YORK RESEARCH: Company Profile
NAME:  York Research Corporation
       280 Park Avenue, Suite 2700 West
       New York, NY 10017

TELEPHONE:  (212) 557-6200

FAX: (212) 557-5678

EMPLOYEES (last reported count): 31

TYPE OF BUSINESS:  York Research Corporation is a developer,
                   owner and marketer of environmentally friendly
                   projects and products. Through subsidiaries,
                   partnerships, joint ventures and affiliates,
                   the Company is in the business of developing,
                   constructing and operating energy production
                   facilities, including those that utilize
                   natural gas as fuel to produce thermal and
                   electric power (cogeneration), and renewable
                   energy projects that convert wind energy into
                   transmittable electric power (Greenpower).


TRIGGER EVENT:  York Research defaulted October 30, 2001 on a
                $10.3 million portfolio bond payment and replaced
                its chief executive Robert Beningson, with Robert
                Paladino, formerly York's executive vice
                president as it faced the threat of a bankruptcy
                filing. The collateral for the defaulted
                portfolio bonds includes York's interest in its
                Trinidad, Big Spring, Brooklyn Navy Yard, and
                Warbasse projects.

                Meanwhile, the creditors of its bankrupt
                subsidiary, Syracuse, New York-based North
                American Energy Conservation, were determining
                whether to file a bankruptcy petition against the
                company, alleging that claims against York had
                not been fruitful.

CEO: Robert Paladino

CFO: Michael Trachtenberg

Last TCRLA Headline DATE:  Thursday, November 1, 2001, Vol. 2,
                           Issue 214    

To see company's latest financial statement:

CONTACT:  Corporate Communications of York Research Corporation,

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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The TCR Latin America subscription rate is $575 per half-year,
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or balance thereof are $25 each.  For subscription information,
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