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       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 16, 2001, Vol. 2, Issue 225

                           Headlines



A R G E N T I N A

IRSA INVERSIONES: Struggles To Pay Debts Amid Recession
MEGA FC: S&P Lowers Rating to 'CCC+'; Watch Moves To Developing


B O L I V I A

LAB: Bolivian Government, Workers Welcome VASP-Asbun Deal


B R A Z I L

CELESC: Bill Proposing Split To Go To Legislature Next Week
EMBRAER: 3Q01 Earnings Very Positive Despite Sector Difficulties
ENRON: Brazilian Assets To Go On The Block
GLOBO CABO: 3Q01 Results Show Stabilization
VESPER: Qualcomm Makes $266M Strategic Investment, Restructuring


C H I L E

MADECO: Floundering Amid Economic Slowdown



M E X I C O

AEROMEXICO/MEXICANA: Union Works With Airlines To Protect Jobs
AHMSA: To Deliver To SEC Debt-Restructuring Plan This Week
GMD: Subsidiaries Issue Shares To Pay Down Debts
GRUPO CAZE: PGR Concludes Probe, Awaiting Court Ruling
RADIO CENTRO: Trouble Looms On The Horizon As Ad Revs Down
WEYERHAEUSER: Slumping Timber Market Closes Mexican Mill's Doors
XEROX: Undergoes Another SEC Probe Related To Mexican Operations


     - - - - - - - - - - -

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

IRSA INVERSIONES: Struggles To Pay Debts Amid Recession
-------------------------------------------------------
IRSA Inversiones y Representaciones SA, an Argentine real estate
developer, was expecting trouble with its creditors to come along
when it posted a loss for the quarter ending September 30,
Bloomberg reported Wednesday.

The company and a unit had borrowed $309 million during a
development boom in the 1990s based on promises to meet certain
profit targets. Now, as a recession in Argentina cuts income from
its property, IRSA is asking bondholders to waive the conditions
so that the company avoids default.

So far, analysts expect IRSA will prevail.

"We are going to see a large number of companies seeking private
deals with bondholders in the coming months to try and prevent
default," said Rafael Ber, an analyst at Argentine Research. "The
big companies like IRSA will probably get them, but there will be
many that don't, and they'll default."

IRSA is betting it will persuade bondholders to waive
requirements on its earnings to avoid default at a meeting
Thursday.

The company, with $43.5 million in bonds due in December and an
$80 million loan due in May, lost 39.6 million pesos ($39.6
million) in the quarter ending Sept. 30 compared with a 430,000
pesos profit last year.

Its Alto Palermo SA shopping mall unit is seeking a waiver on
terms tied to about $66 million of peso-denominated bonds that
mature in April 2005 and $120 million of floating rate notes due
in January.

"We are trying to cut costs and avoid this problem in the
future," said Daniela Bullrich, director of capital markets at
IRSA.


MEGA FC: S&P Lowers Rating to 'CCC+'; Watch Moves To Developing
---------------------------------------------------------------
Standard & Poor's lowered its long-term, foreign currency rating
on Argentine-based Compania MEGA S.A.'s (MEGA) notes to triple-
'C'-plus from single-'B'. At the same time, the CreditWatch
status of the company's rating, which was placed on CreditWatch
with negative implications on Oct. 12, 2001, has been revised to
CreditWatch with developing implications.

The rating downgrade reflects uncertainty about the timeliness of
the payment of US$470 million notes on Dec. 31, 2001, if the
exchange of the notes does not occur before that date. The
company has informed Standard & Poor's that it has called for a
bondholders' meeting for Dec. 14 to remedy the technical default.
It is a condition for the exchange that no event of default
exists at the time of the exchange. Furthermore, there are other
conditions, including the approval by the Argentine Federal
Executive Power of the collateral assignment of the pipeline
concession, which has to be met or waived by the bondholders, and
the funding of the reserve accounts, according to the financing
documents, in order for the exchange to occur. Given the tight
time schedule imposed by the late bondholders' meeting, it is a
concern of Standard & Poor's that the notes are paid in a timely
manner on Dec. 31, 2001, if the exchange does not occur between
Dec. 17 and Dec. 28, 2001. Even though Standard & Poor's believes
the sponsors will provide the necessary funds to pay out the
notes, given the tight time schedule, timeliness becomes crucial.

The CreditWatch with developing status reflects that in the event
that MEGA resolves the conditions for the exchange of the notes
before Dec. 31, 2001, a rating upgrade could take place. However,
if these pending issues are not resolved and the sponsors are not
able, for any reason, to timely provide all funds necessary to
comply with the payment of MEGA's notes, the rating will be
further downgraded.

CONTACT:  Matias Badia, Buenos Aires, +54-114-891-2129, or
          Lidia Polakovic, Buenos Aires, +54-114-891-2130,
          both of Standard & Poor's Ratings Services



=============
B O L I V I A
=============

LAB: Bolivian Government, Workers Welcome VASP-Asbun Deal
---------------------------------------------------------
Viacao Aerea Sao Paulo's (VASP) move to sell its majority stake
in the Bolivian flagship airline Lloyd Aereo Boliviano (LAB) came
as a relief to both the Bolivian government and the airline's
workers, who had begun a hunger strike demanding the withdrawal
of the Canhedo family, EFE reported.

Wagner Canhedo, the Brazilian owner of VASP, sold to Bolivian
businessman Ernesto Asbun Gasaui his 50.3-percent stake in LAB
for an unknown sum.

The transaction was concluded a month after the Bolivian Attorney
General's Office opened an investigation into charges of tax
evasion against VASP, prompting a court to seize the Brazilian
firm's stake in the Bolivian airline.

Bolivian Trade Minister Claudio denied he had any information
regarding the contract signed between Canhedo and Asbun, but that
he presumed the buyer was aware of the court order seizing VASP's
stake in LAB.

"I imagine Ernesto Asbun took into consideration the seizure of
LAB stock," the official said, referring to laws that regulate
such cases.

Recent reports pointed out that Asbun conditioned the acquisition
of VASP's stock in LAB on the favorable result of an audit of the
Bolivian airline, which is currently limping along under a heavy
debt load of over $50 million.

Mansilla also speculated that the stock deal included a security
clause to lift the stock-seizure order at a future date.

At the same time, the court in the city of Cochabamba, where the
airline is headquartered and where the lawsuit was filed, said
the case was proceeding normally and that an order barring
company president Fernando Salazar from leaving the country was
still in effect.



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

CELESC: Bill Proposing Split To Go To Legislature Next Week
-----------------------------------------------------------
In preparation for the eventual privatization of Celesc, the
government of Brazil's Santa Catarina will submit to the regional
legislative assembly next week a bill proposing to split the
distributor company, state government advisor Gley Sagaz revealed
in a Business News Americas report.

Subsequently, the legislative assembly will have to examine and
approve the bill, a process that does not have a fixed deadline,
though Celesc president Francisco Kuster expects it to happen
before December 25.

Following legislative approval for the split, the state
government would create two new companies, then sell control of
them according to Celesc investor relations director Aldo
Schumacher.

International consultant Accenture and a local working group
formed by representatives from Celesc and regional industrial
federation Fiesc designed the model for the Celesc split.


EMBRAER: 3Q01 Earnings Very Positive Despite Sector Difficulties
----------------------------------------------------------------
Embraer closed the first nine months of 2001 with net income of
R$ 809.6 million, 103.2% higher than net income for the same
period of 2000. For the nine-month period of 2000 its order
backlog totaled US$ 23.9 billion, of which US$ 11.2 billion were
firm orders and US$ 12.7 billion were options.

3rd quarter highlights

Net sales for the third quarter of 2001 reaches R$ 1,970.6
million (equivalent to US$ 774.9 million), 41.8% higher than net
sales for the same period in the prior year. Accrued net revenues
for the first nine months of 2001 were R$ 5,413.7 million
(equivalent to US$ 2,368.8 million).

EBITDA - Earnings before interest, taxes, depreciation and
amortization - for the third quarter of 2001 reaches R$ 659.1
million (equivalent to US$ 259.1 million). For the first nine
months of 2001 was R$1,769.5 million (equivalent to US$ 774.2
million), 124.2% higher than the EBITDA for the first nine months
of 2000.

Net income for the third quarter of 2001 is R$ 252.5 million
(equivalent to US$ 99.3 million), corresponding to an increase of
34.2% as compared to the third quarter of 2000.

Delivery of 41 jets of the ERJ 135/140/145 family during the
third quarter, including the delivery of 13 aircraft after
September 11.

The first ERJ 140 aircraft is delivered on July 12.

On August 8, the Brazilian Air Force (FAB) places 76 firm
orders and 23 options for ALX aircraft.

On August 13, Midwest signs a contract to purchase 20 ERJ 140
jets and 20 options for the same aircraft.

The government of the Dominican Republic orders 10 Super Tucano
aircraft on August 20.

A contract to supply one Legacy is signed on August 22 with the
government of Greece.

As a result of the terrorist attacks in the United States on
September 11, Embraer announced certain adjustments to its
production and an layoff of 1,800 people, in order to adapt to
the new worldwide economic situation and maintain its healthy
economic and financial condition, as well as to preserve the
company's technological and industrial capabilities.

Impact of the September 11th terrorist attacks

After the terrorist attacks in the United States on September 11,
Embraer held extensive meetings with its customers worldwide to
discuss the impact of the attacks on the company business. The
company's interaction with these clients, which were always
considered to be the company's long-term partners, led to
considerations regarding the impact of the attacks on the demand
and operations of the airlines.

Although no firm orders were cancelled, there was a need to
reschedule aircraft deliveries. Therefore, the company
rescheduled the deliveries for 2001, decreasing its deliveries to
160 aircraft compared with the 185 deliveries previously
scheduled, and adjusted projected deliveries from 205 units to
135 for 2002, with a view to preserving resources and
capabilities to restart expansion when demand resume.

As a result, Embraer had to dismiss 1,800 employees (14% of the
workforce) in the production and administrative areas in Brazil
and abroad, reducing total staff from approximately 12,700 to
10,900 employees.

In addition, the need for adjustments lead Embraer to:

1) Maintain investments focused on customer satisfaction and
ensure that the high levels of reliability and availability of
its aircraft worldwide operation is maintained;

2) Maintain programs under development in the commercial,
corporate and defense segments, especially the program for the
new EMBRAER 170/190 jet family. The roll-out of the EMBRAER 170
occurred on October 29; and,

3) Maintain investments related with the new Gaviao Peixoto
industrial center, and adjust investments in machinery and
equipment according to the changing world economy.

Economic and financial performance

Net revenues for the third quarter of 2001 - R$ 1,970.6 million,
increased by 41.8% compared with net revenues for the
corresponding period of 2000 of R$ 1,389.7 million. The increase
in net revenues is due to the devaluation of the real over the
period, considering that approximately 97% of total revenues are
related to overseas sales. In the third quarter of 2001, the
devaluation of the real was 15.9% compared with a devaluation of
2.4% in the third quarter of 2000.

In the third quarter of 2001, 42 aircraft were delivered, 38 for
the regional market, of which 22 were ERJ 145, 7 were ERJ 135s, 8
were ERJ 140s and 1 EMB 120 - Bras¡lia, 1 was an ERJ 135 for the
defense market, which will be used for transportation of
government authorities, and 3 were ERJ 135 for the corporate
market. In the same period of 2000, a total of 44 jets of the ERJ
135/140/145 family were delivered, consisting of 34 ERJ 145 and
10 ERJ 135.

Therefore accrued net revenues for the first nine months of 2001
of R$ 5,413.7 million, were 50.0% higher than net revenues of R$
3,609.6 million for the corresponding period in the prior year.

The cost of products sold during the third quarter of 2001 of R$
1,097.0 million, increased by 19.4% as compared to the R$ 918.8
million for the corresponding period of 2000 (compared with a
41.8% increase in net revenues). During the first nine months of
the year the cost of products sold was R$ 3,067.7 million, as
compared with R$ 2,503.6 million for the same period in the prior
year.

Embraer had gross margin of 44.3% in the third quarter of 2001,
compared with 33.9% for the same period of 2000. This increase is
principally a result of the impact of the US dollar/real exchange
rate variation between the date of purchase of components and raw
materials, which are generally imported and quoted in dollars,
and the corresponding delivery date of the aircraft. Also, since
approximately 16% of the cost of Embraer products is quoted in
reais, the real devaluation also led to an increase in our gross
margin over the period.

The gross margin was 43.3% in 2001, constituting an increase of
12.7% as compared to 30,6% for the same period in the prior year.

In the third quarter of 2001, operating profit before financial
revenues and expenses, including the provision for employee
profit sharing, was R$ 614.7 million, an increase of 91.9% from
R$ 320.3 million for the same period of 2000, which correspond to
operating margins of 31.2% and 23.0% respectively.

For the first nine months of 2001, the operating profit was R$
1,633.0 million, an increase of 139.7% compared to the operating
profit for the same period of 2000 of R$ 681.3 million, which
corresponds to operating margins of 30.1% and 18.9%,
respectively.

The EBITDA - Earnings before interest, taxes, depreciation and
amortization for the third quarter of 2001 was R$ 659.0 million,
corresponding to an increase of 82.7% as compared to the same
period of 2000. Similarly, the EBITDA margin increased
substantially, from 26.0% for the third quarter of 2000 to 33.4%
for the third quarter ended September 30, 2001.

EBITDA for the first nine months of 2001 increased 124.2%, from
R$ 789.1 million for the first six months of 2000 to R$ 1,769.5
million for the same period in 2001.

Finally, Embraer's net income of R$ 252.5 million for the third
quarter of 2001 increased by 34.2% compared to the net income of
R$ 188.2 million for the same period of 2000, and earnings per
share were R$ 0.406352 (equivalent to US$ 0.639144 per ADS).
Accrued income for the first nine months of 2001 reached R$ 809.6
million, an increase of 103.2% on the income of R$ 398.6 million
for the same period in 2000.

Investments in R&D and productivity

During the first nine months of 2001, R$ 201.0 million
(equivalent to US$ 87.9 million) was invested in research and
development of new products and maintenance and improvement of
current products. An additional R$ 182.40 million (equivalent to
US$ 79.8 million) were invested in the company's industrial
facilities, including improvement and modernization of industrial
and engineering processes, machinery and equipment. The
investments made in the new Gaviao Peixoto plant should be
emphasized, where the new test runway with a length of 5 km was
inaugurated in mid-October.

Backlog

Embraer backlog ended the first nine months of 2001 with a total
of US$ 23.9 billion, of which US$ 11.2 billion were firm orders
and US$ 12.7 billion were options. We show below the evolution of
the backlog at the end of each quarter:

Note:

Unless otherwise indicated, the company's operational and
financial information is based on consolidated figures in
Brazilian reais in accordance with the corporate law accounting
method. The amounts expressed in US dollars were obtained using
an average rate (R$2.5431 for the third quarter of 2001 and
R$2.2854 for the first nine months of 2001) or the commercial
dollar rate for the end of the corresponding periods (R$ 2.6713
for September 30, 2001 and R$ 2.3049 for June 30, 2001), for the
income statement and the balance sheet data, respectively.

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

CONTACT:  Investor Relations Department
          Phone: 55-12-3945-1216
          e-mail: mercapit@embraer.com.br


ENRON: Brazilian Assets To Go On The Block
------------------------------------------
Executives of the once-mighty energy trader Enron Corp. are
planning to dump money-losing assets as it proceeds with a merger
with rival Dynegy Inc., AP said in a report.

Assets to go under the gavel include its high-speed Internet unit
and power operations in India and Brazil, valued at up to $8
billion, according to officials.

Proceeds from the sales will be used to pay off Enron's massive
debt and support its core businesses.

Those businesses "have performed far worse than we ever could
have imagined when we made these investments," president and
chief executive Ken Lay told investors and analysts.

Meanwhile, the company seeks to raise an additional $500 million
to $1 billion in new private equity to shore up customer and
market confidence, which was battered following disclosures that
the company inflated profit figures and didn't reveal large
amounts of debt to shareholders.

According to Raymond James analyst Jon Kyle Cartwright, Enron is
finally realizing that restoring credibility is the most
important issue facing the company.

"When your credibility is an issue, everything you do is
questioned in the market," Cartwright said. "One week ago, the
rumors suggested that Enron would file for bankruptcy. Today,
we're more comfortable that they will maintain their investment
grade status."

CONTACT:  Mark Palmer of Enron Corp., +1-713-853-4738



GLOBO CABO: 3Q01 Results Show Stabilization
-------------------------------------------
Globo Cabo S.A. (Bovespa: PLIM4 and PLIM3; Nasdaq: GLCBY;
Latibex: XGLCP), the largest Pay-TV multi-service operator in
Latin America, provider of bi-directional broadband Internet
access and multimedia and data communication services for
corporate networks, announced Wednesday its earnings for the
third quarter of 2001 (3Q01) and the first nine months of 2001
(9M01). The following financial and operational data, except
where otherwise indicated, are presented in U.S. GAAP.

-- Net Revenues this quarter was US$ 115.6 million, a decrease of
7% in relation to 2Q01. This decrease was primarily due to lower
ARPU in U.S. dollars due to the 15.9% Real depreciation against
U.S. dollar, despite the monthly fee readjustment in monthly fees
and the increase in pay-per-view revenues, which improved results
in Reais. In the year-to-date, the decrease has been of 12% over
the first nine months of 2000.

-- EBITDA rose 17%, reaching US$ 32.1 million. SG&A expenses
decreased 31%, or US$ 10.0 million, and thus the EBITDA margin
increased to 27.8%, compared to 22.2% in the previous quarter.
EBITDA reached US$ 93.9 million during the 9M01, 0.3% above the
EBITDA presented in the same period last year.

-- Net Debt decreased 3% over 2Q01 and reached US$ 620.1 million.
This is a consequence of the impact of the currency depreciation
on the Real denominated debt, which was reduced by US$ 45.6
million, a 13% reduction when compared to 2Q01. This effect was
partially offset by a decrease in cash and cash equivalents in
the end of the period.

-- Pay-TV ARPU (gross pay-TV revenues, excluding hookup revenues,
per average active subscriber) reached US$ 28.73, a decrease of
4% over US$ 29.89 registered in 2Q01.

To see company's financial statement: http://media.corporate-
ir.net/media_files/nsd/glcby/reports/3Q01_financials_Eng.pdf

CONTACT:  investors, Luis Henrique Martinez, 5511-5186-2684,
          or lmartinez@globocabo.com.br,
          or Marcio Minoru, 5511-5186-2811, or
          minoru@globocabo.com.br,
          both of Globo Cabo S.A.


VESPER: Qualcomm Makes $266M Strategic Investment, Restructuring
----------------------------------------------------------------
In a company press release, QUALCOMM Incorporated (Nasdaq: QCOM),
pioneer and world leader of Code Division Multiple Access (CDMA)
digital wireless technology, announced Wednesday its commitment
to provide up to $266 million of equity financing in support of
Vesper, a Brazilian CDMA wireless service provider. QUALCOMM's
commitment was made concurrently with an equity investment of $80
million by existing Vesper partner, VeloCom Inc. (a privately
held corporation based in Denver, Colo.), as part of a complete
re-capitalization of Vesper's balance sheet.

QUALCOMM's investment, through the creation of a holding company,
marks the completion of Vesper's financial restructuring. As a
result, the holding company will be capitalized with 65% equity
and 35% debt on a consolidated basis. Of the debt, approximately
$100 million will be held at the operating company level, with
another $100 million held at the holding company. Additionally,
all remaining operating company and holding company debt has been
extended through at least 2005, providing the holding company and
Vesper with significant operational flexibility to support
Vesper's growing business. The new equity, along with funds to be
generated through certain other transactions, should fully fund
Vesper's business plan and allow Vesper's new management team to
focus on operational growth.

"With a footprint of more than 120 million pops covering over 70
percent of the country, including the three largest cities, Sao
Paulo, Rio de Janeiro and Belo Horizonte, Vesper represents an
important strategic asset for CDMA development in Brazil, one of
the key markets in Latin America," said Dr. Irwin Mark Jacobs,
chairman and CEO of QUALCOMM. "After this investment, Vesper's
enterprise value will be less than $5 per pop for the 1900 MHz
spectrum and a fully installed CDMA network capable of supporting
more than two million subscribers. These economics give us
confidence that Vesper is well positioned to take advantage of
the convergence of wireless voice and data services."

In addition to financial and managerial restructuring, Vesper's
core business has been reorganized and redefined. With a fully
financed and installed CDMA network that currently has the
capacity to add more than one million new subscribers with little
incremental capital investment, Vesper is positioned to be the
low cost provider of fixed wireless services in Brazil.
Furthermore, Vesper will have a unique product offering in the
market called Vesper Portable. This portable product, made
possible by ANATEL's approval of mobile phones in a fixed
environment, when matched with value-based pricing, allows the
redefinition of the competitive carrier model in Brazil.

Vesper's new management team is led by Luiz Kaufmann, chief
executive officer. Previously, Kaufmann led the restructuring of
Aracruz, the Brazilian pulp manufacturer. Under Kaufmann's
leadership, Aracruz became the world's lowest cost provider and
the first Brazilian company listed on the NYSE. Since joining
Vesper, Kaufmann has successfully attracted several key managers
with significant Brazilian telecommunications and marketing
experience.

"Focusing on operations and simplifying our product portfolio
will allow us to drive our costs lower, while innovative new
services will create the differentiation that allows Vesper to
attract significant market share," said Kaufmann. "These factors,
combined with our flexibility to quickly and inexpensively
upgrade our network to CDMA2000 1X next year and CDMA2000 1xEV-DO
in 2003, give us a new range of voice and data products that will
be unparalleled in the Brazilian market."

As part of this transaction, QUALCOMM will become Vesper's
largest shareholder. QUALCOMM intends to support Vesper while it,
together with VeloCom, seeks to partner with strategic investors
and internationally recognized operators who will have the
ability to successfully enhance Vesper's business and ultimately
assume majority control. QUALCOMM will also consider other
strategic alternatives for Vesper such as spinning-off its
investment in Vesper to shareholders in a transaction similar to
the Leap spin-off in 1998. Lehman Brothers acted as financial
advisor to QUALCOMM for the Vesper transaction.

CONTACT:  QUALCOMM Incorporated, San Diego
          Corporate Public Relations
          Christine Trimble, 858/651-3628
          Fax: 858/651-9303
          ctrimble@qualcomm.com
          or
          Investor Relations
          Julie Cunningham, 858/658-4224
          Fax: 858/651-9303
          juliec@qualcomm.com



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

MADECO: Floundering Amid Economic Slowdown
------------------------------------------
Madeco, a Chilean metal wire and cable manufacturer, posted a
Jan-Sep. net loss of 22.385 billion pesos during the current
year, compared to a loss of 10.631 billion pesos in the same
period last year, Reuters revealed in a report.

In a statement, the company informed it went through a
significant reduction in the sale of optical fiber and copper
telecom cables. The company's negative condition was further
worsened by the economic slowdown in Chile and Argentina.

Madeco registered a net loss of 8.902 billion pesos during the
first-half of the current year.



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

AEROMEXICO/MEXICANA: Union Works With Airlines To Protect Jobs
--------------------------------------------------------------
The National Union of Aviation Workers (SNTAS) announced it is
working with Mexico's airlines, including Aeromexico and
Mexicana, in a bid to retain the employment of more than 6,000
workers, Mexico City daily Reforma reported.

According to SNTAS head Miguel Angel Yudico Colin, the aviation
union and the airlines are developing plans to rotate personnel,
to compensate for overtime with time off and other alternatives.

He admitted that these programs are expected to go on for several
months.

"We're confident that the national aviation industry will
recover, and we feel (an improvement is already beginning). I
wouldn't say it's 100 percent, but yes, there is a light
recovery, and the objective now is to maintain job positions," he
said.

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


AHMSA: To Deliver To SEC Debt-Restructuring Plan This Week
----------------------------------------------------------
AHMSA's debt-restructuring plan should be in the hands of the
Securities and Exchange Commission (SEC) by Nov. 16 at the latest
as the lawyers of the struggling steel company have met with the
legal representatives of the company's bank creditors.

According to a Mexico City daily Reforma, the SEC will have up to
120 days to evaluate the plan, implying that the resumption of
the company's payments won't take place until after that time.

Meanwhile, the company, led by Xavier Autrey, has hired a
headhunter to look for a new CFO, a position currently held by
Jorge Ancira.


GMD: Subsidiaries Issue Shares To Pay Down Debts
------------------------------------------------
Ecosys I and Ecosys II, both subsidiaries of Grupo Mexicano de
Desarollo (GMD), issued new shares worth approximately $310
million, Mexican financial daily El Economista reported.

The funds will be used to liquidate 40 percent the debts of GMD,
which currently stand at 182 million pesos, according to company
sources.

GMD will continue to participate in infrastructure projects
through its subsidiaries, particularly in water, energy, tourism
and highway projects, said the sources.

Analysts said that the company is trying to improve its
situation, proof of which is that its most recent operating
profits were $1.3 million dollars, compared to a loss in the
prior period.


GRUPO CAZE: PGR Concludes Probe, Awaiting Court Ruling
------------------------------------------------------
The investigation lodged by the Federal Attorney General (PGR)
into the possible diversion of public funds against the
executives of Grupo Azucarero Escorpion (Caze) has been
concluded, Mexican financial daily El Economista reported
Wednesday.

Subsequently, a federal judge will use the PGR's evidence to
decide whether to take action under criminal law, according PGR
official Gilberto Higuera Bernal.

Higuera disclosed that all of the executives called on to testify
have done so, including the company's former owner, Enrique
Molina Sobrino, who is also one of the main shareholders of
PepsiCo. in Mexico.

According to government officials, a diversion of 103 million
pesos was made in Grupo Caze, through a subsidiary.


RADIO CENTRO: Trouble Looms On The Horizon As Ad Revs Down
----------------------------------------------------------
As spending on publicity declines and competition increases,
Radio Centro is likely to find itself in a difficult situation
next year, according to a report in Mexico City daily Reforma.

Given the current market expectations, Radio Centro plans to
maximize revenues from its new projects. Considering predictions
of Gross Domestic Product (GDP) growth at 2 percent in 2002,
Radio Centro could see sales growth of 3.6 percent, revealed
Grupo Financiero Banamex-Accival.

The company is betting heavily on the launch of recently acquired
radio station 690 AM in a news/talk format.

"The center of the project is the well-known journalist Jacobo
Zabludovsky," said an analysis by Banamex-Accival.

"The task isn't simple. As well as ample competition, the AM
stations have lost relative importance due to the better quality
of reception that FM stations normally have," said the analysis.


WEYERHAEUSER: Slumping Timber Market Closes Mexican Mill's Doors
----------------------------------------------------------------
Weyerhaeuser Company, one of the world's largest integrated
forest products companies, will close three sawmills and other
operations in Arkansas, Canada and Mexico by year-end as it
struggles with a weak timber market, according to an AP report.

The closures are expected to affect over 600 workers, revealed
spokesman Bruce Amundson. The company warned it will take an
after-tax charge of $21 million, or 10 cents per share, in the
fourth quarter to cover the costs of the closures.

The timber company will close a softwood lumber mill in Mountain
Pine, Ark., its Canadian White Pine sawmill and k3 particle board
plant in Vancouver, British Columbia, and a sawmill, wood-fiber
cement plant and laminated beam plant in Durango, Mexico.

Last month, the company reported a 54 percent drop in third-
quarter earnings, as compared to the same period a year ago, and
warned that things might get worse in the current fourth quarter.

Earlier this year, Weyerhaeuser closed operations in Longview,
Wash. and Springfield, Ore.

CONTACT:  Weyerhaeuser Company
          Bruce Amundson, 253/924-3047 (Media)
          Kathryn McAuley, 253/924-2058 (Analysts)


XEROX: Undergoes Another SEC Probe Related To Mexican Operations
----------------------------------------------------------------
Xerox Corp. revealed that another division of the Securities and
Exchange Commission is conducting a probe into the Stamford-based
company's accounting practices, AP said in a report.

In a filing with the SEC, the company said that agency's Division
of Corporate Finance and its Office of Chief Accountant were
reviewing how the company accounts for sales-type leases.

The issue under review is when Xerox accounts for revenue for
selling and leasing its equipment. The SEC is investigating
whether Xerox booked too much revenue up front rather than over
the life of leases.

According to Xerox, the company was advised last year that SEC's
Division of Enforcement had initiated an investigation into its
accounting and financial reporting practices, initially at its
Mexico operations. The probe then broadened.

Xerox, which fired several executives in Mexico and took a $120
million after-tax charge last year, has said the problems were
limited to domineering managers who sought to drive growth at any
cost.

A former Xerox executive, James Bingham, has accused Xerox of
firing him for warning that accounting irregularities were rooted
in the company's headquarters in Stamford, not Mexico City.

MEDIA CONTACT:  Bill McKee
                716-423-4476 or cell: 716-737-9069
                Bill.Mckee@usa.xerox.com
                Xerox 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.

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