/raid1/www/Hosts/bankrupt/TCRLA_Public/011107.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, November 7, 2001, Vol. 2, Issue 218

                           Headlines


A R G E N T I N A

AMERICA TV: To Cut Debts Thru Sale Of CVN
MORIXE HNOS: Economic Fallout Prompts Flour Mill Closure
MUSIMUNDO/SUPERMERCADOS: Directors Relinquish Posts


B E R M U D A

DELTA AIRLINES: Requests Financial Aid From Bermuda Government


B R A Z I L

EMBRAER: To Add Larger Model To 170/190 Regional Jet Fleet
EMBRATEL PARTICIPACOES: Shares Rise On Plans To Hike Prices
ENRON: May Be Forced To Sell Latin American Assets
ENRON: Fitch Downgrades To `BBB-'; Maintains Watch Negative
MOULINEX: Court Rejected Unions' Demands
PARLO: To Sack Remaining Staff November 21
TELEMAR: Red Ink In 3Q01 From Increased Bad Accounts Provision


C H I L E

TELEFONICA CTC: Signs $87.3M IT Service Agreement with IBM Chile


M E X I C O

BANCO ATLANTICO: Sale Process To Go On Until Next Year
FRUIT OF THE LOOM: Berkshire Agrees To Pay $835M For Purchase
HYLSAMEX: Parent's Stocks Up On Optimism Of Debt Repayment
MUNDET: Sold To AHMSA For Less Than 20M Pesos


     - - - - - - - - - - - -


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

AMERICA TV: To Cut Debts Thru Sale Of CVN
-----------------------------------------
The owner of America TV group, the Avila family, is looking to
reduce liabilities through the sale of its cable signal CVN, El
Cronista reported.

One of the options being considered is to sell CVN to Pramer,
which is controlled by Liberty Media. Another one is to sell it
to the evangelical church Iglesia Universa.

America TV sought protection from creditors last month due to
mounting debts and declining advertising revenues. The
Argentinean television network reportedly amassed a P$45-million
($45.2 million) debt load.


MORIXE HNOS: Economic Fallout Prompts Flour Mill Closure
--------------------------------------------------------
Due to the economic recession plaguing Argentina, Morixe Hnos SA
decided to close down October 31 its flourmill in the city of
Buenos Aires, AFX-Europe reported.

According to Chairman Jorge de Achaval, the company will be
shifting all its production to its unit Molinos Guglielmetti SA's
mill at Benito Juarez in Buenos Aires province.

In a letter to the bourse, Achaval explained: "The decision to
bring forward the planned shutdown of the Buenos Aires mill was
made due to the difficult situation the country is going through,
as reflected in a deterioration in the payments chain and the
non-existence of bank credit, which is affecting commercial
turnover."


MUSIMUNDO/SUPERMERCADOS: Directors Relinquish Posts
---------------------------------------------------
Two senior directors of Argentina's Exxel Group, Latin America's
largest buyout fund, resigned from their posts Friday, Bloomberg
reported Monday.

The officers are namely, Jorge Demaria, who served as vice-
president of the fund and had been in charge of Musimundo, and
Oriz de Roa, who ran Exxel's supermarket chain Supermercados
Norte SA.

Musimundo, Argentina's biggest music retailer, filed for creditor
protection in August with $206.4 million in debts, while
Supermercados was sold to France's Carrefour SA in April.

Exxel chairman Juan Navarro had revealed earlier that he was
seeking buyers for Musimundo and other Exxel companies that are
struggling because of a drop in sales and lack of credit.



=============
B E R M U D A
=============

DELTA AIRLINES: Requests Financial Aid From Bermuda Government
--------------------------------------------------------------
Delta Air Lines has approached the Bermuda Government to ask for
a US$500,000 guarantee to keep its Boston to Bermuda flight going
next year, Transport Minister Ewart Brown confirmed in a report
released by The St. Vincent Herald.

"Delta have told us their projections for January and February
are well below 2001 and they have asked for some financial
assistance, a 500,000-dollar guarantee," Dr. Brown said.

According to Dr. Brown, the Ministry of Transport, along with the
Ministry of Tourism, would look at the proposal carefully but the
initial reaction was not to automatically agree to the request.

"We have to look at it and see what the statistics tells us, in
other words what are the real numbers? If it's unprofitable for
the airlines, will it be unprofitable for government? We are
formulating a response," related Dr. Brown.

Brown said he would be surprised if another airline serving
Bermuda- US Airways - was in business six months from now.



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

EMBRAER: To Add Larger Model To 170/190 Regional Jet Fleet
----------------------------------------------------------
During the Oct. 29 rollout ceremonies for the 170 aircraft, the
first of its 170/190 regional jet family, Brazilian aircraft
manufacturer Embraer confirmed that it would add a slightly
larger 175 model to the line up, according to a Regional Airline
News report.

The Brazilian company also revealed that it is conducting a
feasibility study for a yet-to-be named smaller version of the
170. The other aircraft that will complete the family are the
much larger 190 and 195 models.

There have been 82 firm orders for the 70-seat Embraer 170, but
170/190 Program Director Luis Affonso said that customers have
also been expressing interest in a smaller version, with between
60 and 70 seats.

To determine the viability of the smaller model, Embraer is
assessing economic and technical factors, as well as potential
demand.

According to Affonso, no deadline has been set for a decision on
this model, but that deliveries would likely not begin until at
least 2005. The smaller version would share 95 percent
commonality with the 70-seater, Affonso said.

The company's plans to add a 78-seater to the family were already
known, but Embraer provided many new details at the 170 rollout.
The 175 model has been slotted in to the production schedule
between the 170 and the 190, with first deliveries scheduled for
July, 2004. The addition of this model has pushed back the
rollout of the 190 and 195 models.

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



EMBRATEL PARTICIPACOES: Shares Rise On Plans To Hike Prices
-----------------------------------------------------------
Embratel Participacoes SA preferred shares rose 1.9 percent to 8
reais, Bloomberg said Monday. Brazil's largest long-distance
telephone company said on Thursday it plans to raise data
transmission prices by 25 percent on Dec. 1.

"We believe this is a sign of strength on Embratel's part, in a
business that accounts for about a quarter of revenue and upwards
of 40 percent of profits," UBS Warburg said in a report.

"The earlier excess competition forced data prices down to levels
below cost, considering that most equipment is imported. As
competition eases and Embratel remains standing, it can force
prices back up to rational levels," UBS added.

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

CONTACT:  Embratel Participacoes S.A.
          Investor Relations
          Silvia M.R. Pereira, (55 21) 2519-9662
          fax: (55 21) 2519-6388
          invest@embratel.com.br
          or
          Press Relations
          Wallace Borges Grecco, (55 21) 2519-7282
          fax: (55 21) 2519-8010
          cmsocial@embratel.net.br


ENRON: May Be Forced To Sell Latin American Assets
--------------------------------------------------
In an effort to stave off a credit crunch and restore investor
confidence, financially-strapped energy giant Enron Corp. is
likely to sell power plants, pipelines and even some of its
energy trading assets, investment bankers suggested in a report
released by Reuters.

Among the assets that could go on the block are pieces of its
international operations, projected to fetch Enron about $6.5
billion, according to analysts.

Assets under consideration include power plants and
transportation services in Brazil, Argentina, Australia, and also
Europe. Collectively, they are contributing an average of 15
percent returns on equity for Enron and up to $700 million of
annual earnings.

While Houston-based Enron lined up $1 billion of new credit last
Thursday, it still suffered a second credit rating cut amid
concerns about questionable financial transactions that have
triggered an investigation by the U.S. Securities and Exchange
Commission.

The deteriorating picture, including a drop of almost 70 percent
in its share price in less than a month, has close watchers of
the company saying it will probably have to break itself up if it
is to stay independent.


ENRON: Fitch Downgrades To `BBB-'; Maintains Watch Negative
-----------------------------------------------------------
Fitch downgraded Enron's outstanding securities as follows:
senior unsecured debt to `BBB-' from `BBB+'; subordinated debt to
`BB` from `BBB'; and preferred stock to `B+' from `BBB-`. Enron's
commercial paper has been downgraded to `F3' from `F2'. The
senior unsecured debt ratings of its pipeline subsidiaries,
Northern Natural Gas Co. and Transwestern Pipeline Co., are
lowered to `BBB-' from `A-`. All the above securities remain on
Rating Watch Negative status. Fitch would consider further
downgrades if Enron were unable to make progress in reducing
debt, if its wholesale marketing and trading business were to
show signs of material deterioration, or if expenses and charges
related to the disposition of non- core businesses and
investments exceed present estimations.

Monday's rating action reflects the difficulties Enron faces in
managing its liquidity position in the face of an erosion in
investor confidence. This follows the recognition of a
substantial diminution in value of its global merchant
investments, which were partly financed with an aggressive use of
off-balance sheet vehicles. Enron should be able to manage
through this challenging environment, ultimately recognizing the
values of the company's core businesses.

In October, Enron fully drew down the bulk of its committed bank
facilities and paid down outstanding commercial paper, leaving it
approximately $1 billion of cash on hand to support normal
business activities. In addition, the company is in the process
of executing a new $1 billion secured bank facility that pledges
the assets of Northern Natural and Transwestern. Unsecured
creditors are structurally subordinated to the secured lenders
reducing asset coverage. While its current cash position appears
adequate, securing additional capital sources through asset sales
or raising additional capital would be a favorable development.

A management priority is debt reduction and the exiting of
problem businesses. Clearly, these actions, if completed as
envisioned will reduce risk and improve the company's credit
profile. However, the targeted transactions have varying degrees
of execution risk, particularly the divestiture of assets in
emerging market countries. An additional uncertainty is the
Securities and Exchange Commission's (SEC) investigation of
certain Enron sponsored partnerships. The outcome and potential
impact of the SEC activity is difficult to predict.

The largest announced transaction is the sale of Portland General
Electric Co.(PGE) to Northwest Natural Gas Co. The sale appears
to be moving ahead as planned and has the favorable support of
key local interests. However, the transaction is not expected to
close for another year.

Enron's core businesses have continued to generate strong,
predictable performance and have significant value.
Prospectively, operations at Enron's domestic regulated pipelines
would be less affected by any lingering uncertainty at Enron.
Also, PGE is expected to generate positive and predictable
earnings and cash flow over the next year. Combined, the
pipelines and PGE generate nearly 25% of EBITDA. Wholesale and
retail energy services segments have also consistently reported
predictable and growing returns. Specifically, commodity
marketing and trading activities, which comprise the most
profitable and largest part of wholesale operations, have
generated steady volume growth and stable unit margins. However,
if Enron were unable to maintain the support of its
counterparties or exhibited diminished financial flexibility,
these businesses would be harmed.

CONTACT:  Fitch, New York
          Ralph Pellecchia, 212/908-0586
          Robert Grossman, 212/908-0535
          Hugh Welton, 212/908-0746


MOULINEX: Court Rejected Unions' Demands
----------------------------------------
The French courts rejected a demand by unions concerning the
suspension of the social plan that forms part of SEB's takeover
of Moulinex. The French consumer appliances group, which was put
in receivership on September 7, continues to battle for an
amicable solution to its troubles, La Tribune said in a report.

However, the receivers have decided not to put the plan in place
until November 8, when another meeting of the works council is
held.

The unions have also failed to win a case concerning a demand for
damages and interest because of an alleged breach of procedure in
the winding up arrangement.


PARLO: To Sack Remaining Staff November 21
------------------------------------------
English and Spanish-language learning portal Parlo
(www.parlo.com), which was founded in April 1999, will dismiss
the rest of its staff in New York and Sao Paulo on November 21
after two prospective buyers backed out, Business News Americas
revealed in a report.  However, the company didn't say if it
would be shutting down altogether.

Parlo had 500,000 non-paying students in 27 countries at its peak
and now has "4,000-5,000 paying students," of which 40 percent
are located in Brazil, according to Parlo Brazil director
Guilherme Borges.

Parlo received an initial investment of US$15 million from US-
based VC firms Rho Management, Sevin Rosin and Goldman Sachs. The
company has reduced its initial course offerings from Spanish,
English, French, Italian and German to English and Spanish only.


TELEMAR: Red Ink In 3Q01 From Increased Bad Accounts Provision
--------------------------------------------------------------
Brazil's biggest fixed-line telephone carrier Telemar (Tele Norte
Leste) posted Monday a very disappointing result in the third
quarter of this year after it boosted provisions for bad
accounts, Reuters reported.

Telemar registered a net loss of 429 million reais ($165 million)
during the period, down from a profit of 162 million reais in the
same quarter of the previous year, and a profit of 117 million
reais in the second quarter of 2001.

According to Telemar, its net result had been strongly impacted
by additional provisions worth 653 million reais in September.
Provisions for doubtful accounts were 380 million reais after it
adopted more conservative criteria following the restructuring of
its 16 units under one umbrella operator, the company added.

Itau brokerage analyst Ricardo Ventrilho said there were no
surprises in the results. He was expecting a net loss of 430.2
million reais.

"It was a one-time adjustment, it shouldn't be repeated," he
said, adding that he was maintaining his `buy' recommendation on
Telemar's stock.

However, other analysts said they were surprised by the jump in
financial costs.

"The real problem with the bottom line was the very, very high
interest expenses. I was expecting interest expenses to go up
significantly, regardless, they grew even more," said Mirela
Rappaport, an analyst at ABN Amro in Sao Paulo.

Telemar's financial costs jumped to 345 million reais from 123
million reais in the second quarter, boosted by higher interest
rates and Brazil's 13 percent currency depreciation in the period
-- two factors which have hurt a number of Brazilian companies in
the July through September period.



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

TELEFONICA CTC: Signs $87.3M IT Service Agreement with IBM Chile
----------------------------------------------------------------
Telefonica CTC Chile and IBM Chile announced Monday the signing
of a full-scope outsourcing agreement covering the provision of
IT services for the telephone operator.

The agreement, which spans five years and is worth $87.3 million,
involves the delivery of IT services for Telefonica Chile at the
corporate level, as well as for its Telefonica Residencial,
Telefonica Empresas, Telefonica Data and Telefonica Mundo lines
of business.

Over the term of the agreement -- which is the result of an
international bidding process that began in October 2000 -- IBM
will provide Telefonica Chile with the IT services it needs to
maintain a strong IT infrastructure. Specifically, IBM will
support the operation of systems for the company's customer
information management and billing; manage Telefonica's data
processing center and help desk; support the company's 7,000 -
plus workstations across Chile; run its internal data transport
network; and handle the printing of documents such as invoices
and customer account statements. In addition, IBM will establish
a high-availability backup site for Telefonica to ensure business
continuity and recovery in the event of a business disruption.

The agreement will save Telefonica more than $50 million in IT
costs over its term. The relationship with IBM is also expected
to benefit Telefonica's customers in Chile, through enhancements
in service quality resulting from the use of state-of-the-art
information technology and processes.

As a result of the agreement, 97 specialized technicians from
Telefonica Chile will join IBM Chile.

"This contract with a company like IBM, of proven quality and
prestige in the IT industry worldwide, will help us increase the
quality of our services at significantly lower costs, and will
allow us to focus on our telecommunications business. We have
worked hard to reach the best possible agreement, so we are very
optimistic regarding its results," said Claudio Munoz, general
manager, Telefonica CTC Chile.

Todd Kirtley, general manager IBM Global Services, Latin America,
said: "With this agreement, Chile's leading telecommunications
provider is embracing technological innovation as a driver for
efficiency and competitiveness. The combined resources and skills
of our organizations will bring enhanced quality and services to
Telefonica's customers."

Telefonica CTC Chile chose IBM Chile as the provider of
outsourcing services, based on IBM's experience as the world's
number one IT services provider. IBM has a long-standing
relationship with Telefonica's parent company in Spain, and was
awarded a similar contract with Telefonica's Argentine affiliate.

CONTACT:  IBM Global Services
          Nancy Kaplan
          914-766-4265
          nkaplan@us.ibm.com
          or
          IBM Latin America
          Alejandra Johnson
          305-441-5030
          alejohns@us.ibm.com
          or
          Telefonica Chile
          Edith Flores L.
          011-56-2-6917372
          edflore@ctc.cl



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

BANCO ATLANTICO: Sale Process To Go On Until Next Year
-------------------------------------------------------
The process of selling Banco del Atlantico to Grupo Financiero
Bital will not be completed until next year, according to the
predictions of Mexican bank bailout agency IPAB in a report
Monday in Mexican financial daily El Economista.

In a statement, IPAB said even if the deal with Bital for the
reorganization of Atlantico is completed within the next 15 days,
an agreement must still be reached to turn the bank over.

"The signing of a contract to sell and transfer shares of Banco
del Atlantico to GF Bital is expected to be completed during the
first quarter of 2002," IPAB said in the statement.

IPAB officials failed to predict what the total cost of the
Atlantico's reorganization will have reached by the time the bank
is turned over to Bital, but said that costs to date have
surpassed 16 billion pesos.


FRUIT OF THE LOOM: Berkshire Agrees To Pay $835M For Purchase
-------------------------------------------------------------
Early next year, Fruit of the Loom will become an independent
subsidiary of Berkshire Hathaway after it agreed to pay $835
million for the purchase of the financially troubled company,
according to a report in the Associated Press.

Warren E. Buffett, Chairman of Berkshire Hathaway, said, "We've
agreed to buy Fruit of the Loom for two major reasons: the
strength of the brand and the managerial talent of John Holland."

Subsequently, John Holland, who is now vice president of
operations for Fruit of the Loom, will become the chief executive
officer.

The purchase still must be approved by the U.S. Bankruptcy Court
in Delaware, where the company filed for reorganization in
December 1999.

"We have the secured creditors' and unsecured creditors' support
on this," Holland said.

Berkshire will be acquiring the company's assets and debts,
Holland disclosed, adding that little will change with the
company.

"Once we emerge, the plan is to continue to grow; expand the
market share," he said.

One thing that will change is there will no longer be any
corporate offices in Chicago once the bankruptcy is cleared from
the court. All corporate offices will be in Bowling Green. From
those corporate offices, Holland will look after Fruit of the
Loom facilities in the United States, Europe, the Caribbean and
Mexico.

CONTACT:  George McCane of Richards-Gravelle, +1-214-891-5786,
          or george--mccane@richards.com,
          for Fruit of the Loom, Ltd.; or
          Marc D. Hamburg of Berkshire Hathaway Inc.,
          +1-402-346-1400 (FTLAQ)


HYLSAMEX: Parent's Stocks Up On Optimism Of Debt Repayment
----------------------------------------------------------
Alfa SA, a steel and chemical producer, saw its share prices jump
34 centavos, or 4.1 percent, to 8.71 pesos, Bloomberg reported
Monday.

Alfa's steel-making subsidiary Hylsamex SA has to pay or
refinance $115 million of debt with banks by the end of January.

"(The rise) is related to Hylsamex," said Elizabeth Vargas, an
analyst with Grupo Financiero BBVA Bancomer SA. "There's not much
time left and we bet it's going to work out favorably."


MUNDET: Sold To AHMSA For Less Than 20M Pesos
---------------------------------------------
Mexico's Mundet Cabo family sold 100 percent of its money-losing
soft drink business Mundet to AHMSA, Mexican financial daily El
Economista reported Monday. The value of the transaction was less
than 20 million pesos.

According to the report, Mundet head Arturo Zindel had intended
to sell only a stake in the 99-year-old company, in return for an
injection of much-needed capital, but at the last minute agreed
to sell the whole company.

Several years ago, Coca Cola, which is run in Mexico by Jose
Octavio Reyes, considered buying Mundet, but eventually backed
out because of its poor financial health.




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 * * *