/raid1/www/Hosts/bankrupt/TCRLA_Public/011210.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                   L A T I N   A M E R I C A

            Monday, December 10, 2001, Vol. 2, Issue 240

                           Headlines


A R G E N T I N A

CERAMICA ZANON: Calls In Receivers Due To Enormous Debts
SUPERCANAL: HBO Interrupts Services Due To Unpaid Debt


B R A Z I L

CELG: Goias Suspends Auction In the Absence of Bidders
EMBRATEL: Shares May Drop Following Debt Provision Announcement
ENRON: Bankruptcy Spurs Apprehensions on Telecoms Ventures
LIGHT: To Invest R$600M In Setting Up New Facility
TRANSBRASIL: May Not Be Able Fly Again


C H I L E

TELEX-CHILE: Southern Cross To Take Over Company
WACKENHUT CHILE: Closes A Number of Deals In Just Two Months


D O M I N I C A N   R E P U B L I C

DOMINICANA AIRLINES: Soon To Reclaim Status As National Carrier


M E X I C O

INDUSTRIAS FRONTERIZAS: Seeks Relief Along With U.S. Affiliates
MEXICANA: United Airlines May Consider Acquisition
MEXLUB: Sees Competition At Pemex Gas Stations
SANLUIS CORPORACION: Company Profile
SUGAR REFINERIES: Authorities Pushing For Sale Transparency


P A N A M A

ENRON: Panama Power Generation Unaffected Says Commerce Minister



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A R G E N T I N A
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CERAMICA ZANON: Calls In Receivers Due To Enormous Debts
--------------------------------------------------------
Ceramica Zanon, which specializes in the production of flooring
materials, called in the receivers, reports El Cronista.

According to the report, the Company's debt to suppliers, the Tax
Officer and a group of banks totals US$75 million, while its debt
to the banks stands at US$47 million. Ceramics's largest bank
creditors include Rio, CMF and Creditanstalt.

Two months ago, Ceramica Zanon closed down operations at its
plant in Neuquen province.

At the moment, the company claims a 25-percent market share in
the sector. It has an installed capacity of 1.1 million sq.
meters and it exports 20 percent of its production.

Ceramica Zanon is 78-percent controlled by the Argentinean family
Zanon.


SUPERCANAL: HBO Interrupts Services Due To Unpaid Debt
------------------------------------------------------
Supercanal's financial financial troubles seen to continue
endelessly. The cable channel operator of Mendoza province is in
the news again with negative proceedings.

According to an El Cronista report, the Company, which called in
the receivers a year and a half ago, is now facing another
problem.

The group HBO Latin America had signed 2 contracts with
Supercanal: one for the premium channels (HBO, HBO Plus, Cinemax
and Disney Channel) and another contract for the basic channels
(E Entertainment Television, Sony, A&E Mundo, Warner Channel, The
History Channel and AXN).

According to Supercanal, they owe 4 months worth of payments for
the second contract, prompting HBO to interrupt its transmission
of 10 channels showed by the cable operator.

Supercanal owes US$800,000 to HBO, El Cronista reveals.

Supercanal reportedly has debts of over US$400 million, and it
has over 400,000 customers operating in 6 provinces.



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B R A Z I L
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CELG: Goias Suspends Auction In the Absence of Bidders
------------------------------------------------------
Lack of bidders prompted Brazil's Goias state to suspend the 1.3
billion-real (US$550 million) sale of Cia. Energetica de Goias
(Celg), reports Bloomberg.

According to a spokeswoman for Goias state, Belgium's Tractebel
SA, which was expected to be the only bidder for the utility,
failed to present documents for the bidding Wednesday, the last
day to qualify for the auction.

The state had planned to sell 89 percent in Celg this coming
December 18 but it failed to attract bidders for the Company
because a weakening currency and power rationing have increased
losses in the utility. Celg, which sells electricity to 1.9
million people in the country's midwest, is expected to post a
loss of 160 million reais this year.

Investors are apprehensive about the price controls of Brazilian
power distributors, which prevent them from raising rates to
fully adjust for a weakening currency that increased their
electricity purchase costs. The Brazilian real currency has lost
20 percent in value against the U.S. dollar this year.

Goias state may ask the federal government to take over the power
distributor in coming weeks if it can't sell the utility,
according to the spokeswoman.

The Brazilian state is planning to sell a portion of Celg in
order to pay off debt to its employee pension fund and boost
investments in education, sanitation and transportation.


EMBRAER: Plans To Enter Venezuelan Market for Medium-size Planes
----------------------------------------------------------------
Business as usual seems to contine for Brazilian airplane
manufacturer Empresa Brasileira de Aeronautica SA, despite the
prevailing economic downturn.

South American Business Information recently said the aircraft
company is aiming to penetrate the Venezuelan market by
introducing its "Legacy" model in an event in Caracas soon.

In recent weeks, the company has been upbeat with its plan to
turn things around next year after being forced to cut operating
costs and firing close to 2,000 employees this year.

Chairman Mauricio Botelho recently hinted that the small and
average aircraft segments will be key to the company's recovery.
Accordingly, the company offers the most competitive price for
these types of airplanes in the market.

The "Legacy" model can seat 10 passengers, an ideal medium-size
corporate jet.

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


EMBRATEL: Shares May Drop Following Debt Provision Announcement
---------------------------------------------------------------
Shares of Embratel Participacoes SA may extend Wednesday's 12
percent tumble, according to a Bloomberg report.

The Company's shares have fallen since its announcement on
Tuesday that it plans to set aside 605 million reais(US$248.5
million) in fourth-quarter provisions to cover unpaid bills and
write off obsolete equipment.

The struggling Brazilian telephone operator, which is controlled
by WorldCom Inc., said it would allocate 520 million reais as
reserves against doubtful accounts, or invoices the Company
believes won't be paid.

Meanwhile, Morgan Stanley & Co. downgraded the Company's shares
to "neutral" from "outperform."

"In our view, given Embratel's history, it will take longer for
investors to come back to the stock than it has in the past,"
Morgan Stanley said in a report.

Embratel sharees have already lost 67 percent of their value this
year, making it the worst performing stock on the Bovespa index
in 2001.

CONTACT:  Silvia M.R. Pereira, Investor Relations
          55-21-2519-9662, or fax, 55-21-2519-6388, or
          invest@embratel.com.br

          Wallace Borges Grecco, Press Relations
          55-21-2519-7282, or fax, 55-21-2519-8010, or
          cmsocial@embratel.net.br


ENRON: Bankruptcy Spurs Apprehensions on Telecoms Ventures
----------------------------------------------------------
Carlos Rodriguez, an analyst at Pyramid Research, believes that
the recent bankruptcy filing of US-based energy trader Enron may
have a negative impact on other electricity industry players,
which are looking to venture into the telecoms market, Business
News Americas reports.

"To some extent the other power companies laying fiber in Latin
America were waiting to see how Enron fared," said Rodriguez,
adding to his conclusion in a recent report that Enron's "sudden
demise (in North America) did not give it enough time to fail or
succeed in Latin America."

Enron's telecoms subsidiaries (Promigas in Colombia, Argentina's
Telcosur, Enron Broadband Mexico and Enron Communications do
Brasil) can no longer attract investors using the lure of their
parent company's weight, and must now fend for themselves.

Enron has an array of rights of way that it can sell. However,
its active Latin American fiber ventures are no more than a year
old, with a modest client base and mostly in the form of dark
fiber. Despite their position, Rodriguez, in his report, stated
that the dark fiber is expensive to light up and there is already
a glut of fiber in the region - not counting the assets available
from other recent failures such as 360Networks, PSINet and
Winstar - all of which add up to poor sales prospects for Enron's
subsidiaries.


LIGHT: To Invest R$600M In Setting Up New Facility
--------------------------------------------------
Brazilian electricity company Light, which provides services to 3
million people in the Rio de Janeiro state, obtained the
necessary license to set up the hydroelectric Simplicio(340Mw),
which Aneel (Agencia Nacional de Energia Eletrica) Auctioned late
last month, reports Gazeta Mercantil.

Establishing the Simplicio facility will require an R$600 million
in investments. For the license, Light will pay R$1.1 million in
annual fee from the 7th up to the 35th year of operation.

Light, which is controlled by EDF, has 4 other ongoing projects:
the hydroelectric facilities Paracambi (500 Mw), Itaocara
(150Mw), and the thermal facilities Norte Fluminense (900Mw), and
Cabuias (480 (Mw).

Through 2006, the Company expects to increase by 178 percent its
power generating capacity from the current 852 Mw to 2,370 Mw.


TRANSBRASIL: May Not Be Able Fly Again
--------------------------------------
Struggling Brazilian carrier Transbrasil, which halted operations
earlier last week, may not be able to resume flights after
Defense Minister Geraldo Quintao rejected Transbrasil Chairman
Antonio Celso Cipriani's call for federal intervention.

According to an AFX report, the defense minister lobbied against
a bailout of Transbrasil by the government, and refused to grant
it a 165-million-real loan.

"We are not considering transferring funds from resources of the
health and education programs to airlines," he said.

Quintao has reportedly sent his vote -- against the takeover of
Transbrasil -- to the Civil Aviation National Council.

Transbrasil grounded its aircraft indefinitely when Anglo-Dutch
oil giant Royal Dutch/Shell cut off fuel supplies after the
carrier failed to make a daily payment. Subsequently, the carrier
sought government intervention in order to avoid bankruptcy.



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

TELEX-CHILE: Southern Cross To Take Over Company
------------------------------------------------
US-based investment group Southern Cross reached an agreement
with Telex-Chile's creditors in order to pay an undisclosed
amount for Telex-Chile's debts and take over the Company, says El
Mercurio.

The transaction came as a surprise as Telex-Chile's board of
directors had earlier considered AT&T's offer as the best out of
all the offers made for the Company.

According to company sources, Southern Cross started negotiating
directly with the creditors and preempted the AT&T offer.

The creditors should approve the transaction officially by mid-
December.


WACKENHUT CHILE: Closes A Number of Deals In Just Two Months
------------------------------------------------------------
Wackenhut Chile, formed by the US firm Wackenhut Corp and Chilean
investors, managed to close deals for security services with 14
local Chilean companies for $200 million in the last two months,
says El Diario.

The security company expects to increase its sales by 30 percent
in the next six months primarily focusing on security services
requested by multinational companies.

Wackenhut Chile, which claims a 25-percent market share,
registered operating revenues of US$95 million, 60 percent of
which came from security services.

The company recently sealed an agreement to repay its US$10
million banking debts. Under the agreement, Wackenhut can delay
for 90 days its interest payments, while the principal part of
the debt can be delayed 180 days.

CONTACT:  Patrick Cannan, Director,
          Corporate Relations of Wackenhut Corporation,
          +1-561-691-6643, or pcannan@wackenhut.com



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D O M I N I C A N   R E P U B L I C
===================================

DOMINICANA AIRLINES: Soon To Reclaim Status As National Carrier
---------------------------------------------------------------
Apparently Dominicana Airlines is now on its way to being revived
as the national carrier of the Dominican Republic, according to a
report in AirlinersOnLine.com.

The report reveals that Aeropostal, whose affiliate won the
privatization bid for Dominicana Airlines, has proposed to use
some of their McDonnell Douglas DC-9s for flights in the region
including Miami.

Not so long ago, Aeropostal's acquisition of Dominicana airlines
was nearly nullified following reports it had not paid the
deposit required to close the tender operation.

Aeropostal's move to grant Dominicana has been riddled with
criticisms locally on grounds that it is not financially sound
enought to position Dominicana as a competitive airline.



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

INDUSTRIAS FRONTERIZAS: Seeks Relief Along With U.S. Affiliates
---------------------------------------------------------------
Mexican autoparts maker Industrias Fronterizas HLI, S.A. de C.V.
was among the units that joined their U.S.-based parent Hayes
Lemmerz International, Inc. last week in seeking protection from
creditors.

Along with 31 other sister companies, the Mexican manufacturing
unit filed Wednesday for Chapter 11 protection before the U.S.
Bankruptcy Court in Wilmington, Delaware.

A company statement, however, clarified that Industrias
Fronterizas, which operates a plant in Nuevo Laredo, Tamaulipas,
was the only non-US unit that sought the protection.

Hayes Lemmerz, famous for its steel and aluminum wheels, operates
five plants in Mexico.  Three other units in Brazil comprise its
Latin American ventures.

Why the Mexican unit ended up seeking the temporary relief from
creditors remains unclear.  The company, however, gave assurance
that the process won't end up in a liquidation of the units in
question.

"Hayes Lemmerz has not gone bankrupt nor is the Company going out
of business.  Chapter 11 is a court supervised restructuring
proceeding not a liquidation proceeding," the statement said.

In fact, according to the company, it has received commitments
for up to US$200 million in debtor-in-possession financing from a
group of lenders led by CIBC World Markets Corp.

This financing instrument will be used to fund post-petition
operating expenses and supplier and employee obligations, said
the company.

Last week's petition for relief covered the company's operations
in California, Georgia, Indiana, Kentucky, Michigan, Missouri
Ohio, and Texas.

Hayes Lemmerz has engaged the law firm of Skadden, Arps, Slate,
Meagher & Flom to represent the entire subsidiaries in the
bankruptcy proceedings.

For more information, contact Grenville R. Day, Esq. of Skadden,
Arps, Slate, Meagher & Flom by Mail: 333 West Wacker Drive,
Chicago, IL 60606 by Phone: (312) 407-0700 or by e-mail:
gday@skadden.com

Meanwhile, Industrias Fronterizas HLI, S.A. de C.V. may be
reached by Mail: Parque Industrial O.L. Longoria Nuevo Laredo,
Tamaulipas, Mexico by Phone: 52-871-08800 or by Fax: 52.871.30907


MEXICANA: United Airlines May Consider Acquisition
--------------------------------------------------
United Airlines' current philosophy is to promote strategic
partnerships without investing in acquisitions of other airlines.

However, in a report by Mexico City daily Reforma, United
Airlines Mexico CEO Josue Meza said the American airline could
become interested in the sale of Mexicana de Aviacion if
opportunity presents itself.

United Airlines currently has a code sharing alliance with
Mexicana, which is run by Fernando Flores and is owned by airline
holding company Cintra.

According to Meza, the low prices recently offered by American
airlines for flights to and from Mexico, which led to complaints
by Mexican airlines that could not afford to reduce their prices,
were meant to provide incentives to travelers to resume traveling
between the United Sates and Mexico.


MEXLUB: Sees Competition At Pemex Gas Stations
----------------------------------------------
MexLub is likely to face competition in the market for motor oil
and engine lubricants at Petroleos Mexicanos (Pemex) gas
stations.

According to a report released by Mexican financial daily El
Economista, Pemex may be considering a move to broaden the market
by allowing the sale of other brands alongside those belonging to
MexLub.

Mexlub and Pexmex had previously signed an exclusivity contract,
which is now under an audit ordered by the federal government.
The audit, which is being carried out by Prieto Ruiz de Velasco,
should be completed by December 18.

Mexican and foreign lubricant producers have complained that
MexLub has a monopoly on lubricants since all gas stations in
Mexico are run by Pemex.


SANLUIS CORPORACION: Company Profile
------------------------------------
NAME: SanLuis Corporacion, S.A. de C.V.

ADDRESS: Monte Pelvoux 220 8th Floor Lomas de Chapultepec 11000
         M‚xico, D.F.

TELEPHONE: (52) 5229 5800, (52) 5202 6604 (Fax)

WEB SITE: http://www.sanluiscorp.com.mx

TYPE OF BUSINESS: SanLuis is a holding company. Through its
                  subsidiaries, SanLuis operates an autoparts
                  manufacturing division and a mining division.
                  SANLUIS Rassini produces suspensions and brake
                  components for the global automotive industry,
                  with a principal focus on original equipment
                  manufacturers (OEM's).  The mining division is
                  operated by SanLuis' subsidiary, Industrias
                  Luismin, S.A. de C.V., and is engaged in gold
                  and silver mining. SanLuis is also engaged in
                  real estate activities.

TOTAL ASSETS: US$918.6 million (as of September 30, 2001)

TOTAL LIABILITIES: US$742.5 million (as of September 30, 2001)

ANNUAL REVENUES: US$107 million (as of December 31, 2000)

TRIGGER EVENT: Trouble began when lenders refused to roll over
               maturing short-term debts in August.  In
               September, following the terrorist attack in the
               U.S., the company missed interest payment on a
               US$200 million eurobond due 2008.  The company is
               currently saddled by a liquidity problem owing to
               a weak performance in the third quarter,
               compounded by short-term obligation to holders of
               its US$300 million Euro-Commercial Paper.

PUBLIC SECURITIES: 227,957,568 (Paid-in and outstanding Series A,
                   B, C, D stocks)

CEO: Antonio Madero (also concurrent chairman)

CFO: Francisco Garza Jim‚nez

AUDITOR: Mariano Escobedo, PricewaterhouseCoopers

OFFICE: 573 Rinc˘n del Bosque 11580 M‚xico, D.F.

PHONE: (525) 263-6047, (525) 263-6010 (Fax)

Last TCRLA Headline DATE: December 6, 2001, Vol. 2, Issue No. 238


SUGAR REFINERIES: Authorities Pushing For Sale Transparency
-----------------------------------------------------------
The Chamber of Deputies' Special Sugar Industry commission urged
the federal government to be transparent in its eventual sale of
the 27 sugar refineries expropriated on September 3, reports
Mexico City daily Reforma.

In addition , Commission members also encouraged the government
to take into consideration the labor group's interest in
purchasing refineries.

The Commission is pushing the government to take these measures
in order to avoid repeating errors of past administrations.

According to Economy Minister Luis Ernesto Derbez, refineries
will be ready for sale within 15 months. These will be sold to
parties with "moral character" and financial solvency, he
emphasized.

He also announced that on December 10 he would travel to
Washington, D.C. to meet with counterpart Robert Zoellick in
order to discuss the country's differences over sugar.



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P A N A M A
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ENRON: Panama Power Generation Unaffected Says Commerce Minister
----------------------------------------------------------------
Commerce and Industry Minister Joaquin Jacome says Enron Corp.'s
troubles will not spill over to its Panamanian operations,
claiming that the country's fuel supply is relatively secured.

"We have information that there is no reason to worry.  The
mother company is the only one that's going into bankruptcy,"
says Mr. Jacome.

Bankrupt Enron Corp. bought a power plant on line in Panama in
1998.  The company also owns 51 percent of the shares in Bahia
Las Minas, which is partly owned by the government.




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
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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,
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.


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