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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

             Thursday, December 27, 2001, Vol. 2, Issue 252

                            Headlines


A R G E N T I N A

ACINDAR: Belgo-Mineira CFO Predicts Recovery Well In Hand
ANTFACTORY: Seymour Pierce Acquires Dotcom Darling for US$72.5M
METROPOLITANO: Applies For Creditor Protection


B R A Z I L

EMBRATEL: Increases Efforts To Avoid Customer Defaults


C H I L E

TELEX-CHILE: Reschedules Creditors' Meeting For December 28


M E X I C O

CYDSA: Expects An Agreement With Creditors Early Next Year
HYLSAMEX: Imsa Denies Having Any Interest
MINERA AUTLAN: Proceeds With Downsizing Program To Cut Debts
STARMEDIA NETWORK: Cauley Geller Announces Class Action Lawsuit
STARMEDIA NETWORK: Spector Roseman Files Class Action Lawsuit


P A R A G U A Y

COPACO: WB Recommends Tariffs To Be Indexed To US Dollar


V E N E Z U E L A

SIDOR: Default Hurt Usiminas' Shares
SIDOR: Still Struggling to Survive Financially
SIDOR: Seeks Government Help To Block Steel Imports


      - - - - - - - - - -


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

ACINDAR: Belgo-Mineira CFO Predicts Recovery Well In Hand
----------------------------------------------------------
Marcos de Piana, CFO of Belgo-Mineira, expressed confidence that
Argentine steel maker Acindar, in which the Minas Gerais-based
company has 21.67 percent stake, will recover in time.

"They possess solid industrial fundamentals and know how to adopt
the necessary measures to survive this period," he said.

Acindar on Wednesday said it could not pay interest and principal
on its $400-million debt due to Argentina's economic plight. The
economic-political-social crisis has since worsened with food
riots, the deaths of some protesters and the resignation of
economy minister Domingo Cavallo.

Belgo plays a major role in managing Acindar since signing a
partnership deal a year ago with previous controllers, the
Acevedo family. The company has invested $134 million to date in
Acindar and has guaranteed $15.6 million of the debt of its
Buenos Aires partner.

According to Piana, the $15.6-million debt could be set aside in
Belgo's balance sheet and did not represent a major amount in
cash-flow terms.


ANTFACTORY: Seymour Pierce Acquires Dotcom Darling for US$72.5M
---------------------------------------------------------------
Bleeding dotcom company Antfactory, along with its Latin American
holdings, will be bundled in a deal that will see much of its
money returned to early stage investors, the Independent said
Monday.

Seymour Pierce, the stockbrokerage firm, will acquire the
Internet incubator and venture capital company through an equity
and loan notes issue worth US$72.5 million.

In effect, the transaction will transfer most of Antfactory's
assets to a new company associated with its founding
shareholders, who will also become shareholders in Seymour.

The most significant result of this transaction will be the
return of much of Antfactory's remaining US$118 million cash to
early investors.

The company started out in 1999 with US$190 million in funds and
has opened branches in Argentina, India, Israel, Mexico and
Sweden. Antfactory's major institutional shareholders include
Allianz Capital Partners, Citicorp Venture Capital and CVC
Capital Partners.

The dotcom industry crash has cause the firm to lose money,
posting recently a pre-tax loss of US$32.8 million for the nine
months ending September 30.

The deal will leave Seymour with 15 of Antfactory's portfolio
investments and approximately US$38.2 million cash. Seymour says
it plans to sell or float the constituent companies "over the
coming years."


METROPOLITANO: Applies For Creditor Protection
----------------------------------------------
Commercial court officials revealed that the Metropolitano group,
which runs three of the eight Buenos Aires commuter railway
concessions, has filed for protection from creditors, reports
AFX.

The group claimed that the government owes it 24 million pesos in
compensation for subsidized ticket prices, and 65 million pesos
for works and investments on the system.

Metropolitano also cited a "lawsuit industry," which has filed
1,200 court cases against it as reason for its current condition.



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

EMBRATEL: Increases Efforts To Avoid Customer Defaults
------------------------------------------------------
In the telecom buisiness, billing for service is only part of the
battle. Getting the bill paid is the challenge Embratel has faced
on a large scale in Brazil.

The Company has replaced telephone relays all over the country,
reports South American Business Information. The measure is part
of the Embratel's new strategy to replace methods intended to
recover lost credit with methods to avoid defaults by its
customers.

Customer defaults have caused Embratel to make provisions of
R$5.6 million, 20 percent of its income for the year up to
September, to cover this. The company has decided to avoid any
more price wars with regards to long distance service.

According to reports, the Company is thinking of contracting a
finance institution to help it manage its debt and is in
discussion with three banks. A decision is expected to be made in
January.

Embratel's debts at the end of the third quarter were R$2.6
billion, with almost 100 percent in foreign currency. Rumors
concerning a possible sale of Embratel are still rife in the
market.

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



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

TELEX-CHILE: Reschedules Creditors' Meeting For December 28
-----------------------------------------------------------
Telex-Chile has postponed for December 28 its creditors' meeting
that will see a final decision regarding the sale of the
Company's assets, reports El Diario.

This is the second time that the Company has postponed the
meeting.

According to sources close to the process, the meeting was
postponed because foreign creditors want more time to analyze the
sale proposal.



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

CYDSA: Expects An Agreement With Creditors Early Next Year
----------------------------------------------------------
Cash-strapped industrial group Cydsa SA is hoping to complete an
agreement with its creditors during the first quarter of 2002,
reports Mexico City daily Reforma.

The Company's creditors include Banamex-Citibank, Banorte, Bital,
Bancomext, GE Capital and Caterpillar, as well as bondholders.

Cydasa hass already sold some of its assets to make payments,
including a $70-million deal with Cemex.

Only a few days ago, Cydsa, headed by Tomas Gonzalez Sada,
reached an agreement with Standard Charter, the creditor that
started legal proceedings against it in November.


HYLSAMEX: Imsa Denies Having Any Interest
-----------------------------------------
A spokesperson from Grupo Imsa denied that the Mexican steel and
industrial conglomerate is considering any investment in the
embattled Mexican steelmaker Hylsamex, reports Business News
Americas.

Previous reports suggested that Imsa is contmplating an
investment in Hylsamex, as it has been in acquisition mode over
the past two years. Imsa remains one of the few Mexican
steelmakers with ready cash.

Hylsamex, the steelmaking subsidiary of fellow Mexican
conglomerate Grupo Alfa, is currently renegotiating some $1.1
billion in debts with creditor banks, and is looking to
restructure its operations.

Alfa, hamstrung by debts from its other subsidiaries, is looking
for a "strategic investor" for Hylsamex, and may also offload
some of Hylsamex's non-core assets.


MINERA AUTLAN: Proceeds With Downsizing Program To Cut Debts
------------------------------------------------------------
Mexican manganese producer Minera Autlan disclosed it will layoff
more workers next year as it continues with its downsizing
program, says Business News Americas.

In addition to the measure, Autlan is also looking to sell non-
strategic assets to raise capital to pay off debts, including its
Mexican real estate portfolio.

"The company believes that these actions will substantially
strengthen its financial results in a short time, while focusing
on the most profitable products and clients," Autlan said in a
statement.

Negotiations between the Company and its creditor banks to
restructure debts also continue. Autlan is working on a
capitalization program with two investment funds from Mexico and
Canada, as well as Mexico's Mining Promotion Trust Fund (Fifomi)
on a long-term credit operation. The Company has hired Paribas
bank as exclusive agent in the search for a strategic investor.

Autlan initiated a downsizing program this year in order to trim
costs, as well as production, in line with depressed demand for
its product in the steel industry.

The program has involved significant staff cuts at Autlan's
Molango mine; the Tamos, Gomez Palacio and Tezuitlan plants as
well as the Company's Monterrey offices. Production was
temporarily halted at Gomez Palacio and Tezuitlan earlier this
year.


STARMEDIA NETWORK: Cauley Geller Announces Class Action Lawsuit
---------------------------------------------------------------
The Law Firm of Cauley Geller Bowman & Coates, LLP announced
Friday that a class action has been filed in the United States
District Court for the Southern District of New York on behalf of
purchasers of StarMedia Networks Inc. ("StarMedia" or the
"Company") (Nasdaq:STRM) securities during the period between
April 11, 2000 and November 19, 2001, inclusive (the "Class
Period").

The complaint charges that defendants (StarMedia, Fernando J.
Espuelas (CEO and Chairman) and Steven J. Heller (Chief Financial
Officer)) violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by
issuing a series of material misrepresentations the market
between April 11, 2000 and November 19, 2001 concerning the
Company's financial performance. The complaint alleges that
StarMedia reported artificially inflated financial results in
press releases and filing made with the SEC by improperly
recognizing revenue in violation of Generally Accepted Accounting
Principles ("GAAP"). Specifically, the complaint alleges that two
of the Company's primary subsidiaries, AdNet S.A. de C.V. and
StarMedia Mexico, S.A. de C.V., had engaged in improper
accounting practices which had the effect of materially
overstating StarMedia's reported revenues and earnings by at
least $10 million. On November 19, 2001, as alleged in the
complaint, StarMedia issued a press release announcing that based
on the "preliminary" results of an internal investigation into
its accounting practices, it expects to restate its financial
statements for the fiscal year 200 and the first two quarters of
2001 and that those financial statements should not be relied
upon. The Company further reported that its Chief Financial
Office had "resigned." Immediately following the announcement of
the restatement, the NASDAQ Stock Market halted trading in
StarMedia stock, pending the receipt of additional information
from the Company. StarMedia stock last traded at $0.38 per share,
which is 98.5% less that the Class Period high of $25.50, reached
on April 11, 2000.

If you bought the securities of StarMedia between April 11, 2000
and November 19, 2001 inclusive, and you wish to serve as lead
plaintiff, you must move the Court no later than January 21,
2002. If you are a member of this class, you can join this class
action online at http://www.classlawyer.com/sign--up.html.Any member of
the purported class may move the Court to serve as lead plaintiff
through Cauley Geller Bowman & Coates, LLP or other counsel of
their choice, or may choose to do nothing and remain an absent
class member.

Cauley Geller Bowman & Coates, LLP has substantial experience
representing investors in securities fraud class action lawsuits
such as this. The firm has offices in Florida, Arkansas and
California, but represents investors throughout the nation. If
you have any questions about how you may be able to recover for
your losses, or if you would like to consider serving as one of
the lead plaintiffs in this lawsuit, you are encouraged to call
or e-mail the Firm or visit the Firm's website at
www.classlawyer.com.

CAULEY GELLER BOWMAN & COATES, LLP
  Investor Relations Department:
  Jackie Addison, Sue Null or Shelly Nicholson
  P.O. Box 25438
  Little Rock, AR 72221-5438
  Toll Free: 1-888-551-9944
  E-mail: info@classlawyer.com


STARMEDIA NETWORK: Spector Roseman Files Class Action Lawsuit
-------------------------------------------------------------
The law firm of Spector, Roseman & Kodroff, P.C., filed a class
action suit on behalf of an investor against StarMedia Network,
Inc. ("StarMedia" or the "Company") (Nasdaq: STRME) and its
principal officers and directors in the United States District
Court for the Southern District of New York on behalf of all
persons or entities who purchased StarMedia stock during the
Class Period from April 11, 2000 through November 19, 2001.

The complaint charges that defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market between April 11, 2000 and
November 19, 2001 concerning the Company's financial performance.
The complaint alleges that StarMedia reported artificially
inflated financial results in press releases and filings made
with the SEC by improperly recognizing revenue in violation of
Generally Accepted Accounting Principles ("GAAP"). Specifically,
the complaint alleges that two of the Company's primary
subsidiaries, AdNet S.A. de C.V. and StarMedia Mexico, S.A. de
C.V., had engaged in improper accounting practices which had the
effect of materially overstating StarMedia's reported revenues
and earnings by at least $10 million. On November 19, 2001, as
alleged in the complaint, StarMedia issued a press release
announcing that based on the "preliminary" results of an internal
investigation into its accounting practices, it expects to
restate its financial statements for fiscal year 2000 and the
first two quarters of 2001 and that those financial statements
should not be relied upon. The Company further reported that its
Chief Financial Officer had "resigned." Immediately following the
announcement of the restatement, the Nasdaq Stock Market halted
trading in StarMedia stock, pending the receipt of additional
information from the Company. StarMedia stock last traded at
$0.38 per share, which is 98.5% less than the Class Period high
of $25.50, reached on April 11, 2000.

If you purchased StarMedia common stock during the period from
April 11, 2000 through November 19, 2001, inclusive, you may, no
later than January 21, 2002 move to be appointed as a Lead
Plaintiff. A Lead Plaintiff is a representative party that acts
on behalf of other class members in directing the litigation. The
Private Securities Litigation Reform Act of 1995 directs Courts
to assume that the class member(s) with the "largest financial
interest" in the outcome of the case will best serve the class in
this capacity. Courts have discretion in determining which class
members(s) have the "largest financial interest," and have
appointed Lead Plaintiffs with substantial losses in both
absolute terms and as a percentage of their net worth. If you
have sustained substantial losses in StarMedia common stock
during the Class Period, please contact Spector, Roseman &
Kodroff, P.C. at classaction@srk-law.com for a more thorough
explanation of the Lead Plaintiff selection process.

CONTACT:  Jeffrey Kodroff of Spector Roseman & Kodroff, P.C.,
           +1-888-844-5862



===============
P A R A G U A Y
===============

COPACO: WB Recommends Tariffs To Be Indexed To US Dollar
---------------------------------------------------------
The World Bank has recommended that the tariffs of the Paraguayan
telecoms Copaco (formerly known as Antelco) should be indexed to
the US Dollar in order to make its assets more attractive to
prospective bidders, according to a report by Noticias.

However, in order to make this feasible, it requires a regulation
from the telecoms council Conatel that would simply extend the
tariffs criteria used for mobile to fixed communications.

Moreover, the World Band explained that, due to inflation, the
income from Copaco decreased from $214 million in 1998 to $120
million in 2001.

Copaco is slated for privatization next year.



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

SIDOR: Default Hurt Usiminas' Shares
------------------------------------
Problems for Venezuelan integrated steel producer Siderurgica del
Orinoco (Sidor) has a trickle-down effect for the Brazilian
company Usiminas, reports Business News Americas.

However, Usiminas officials said that its stake in Siderar
related to a technology transfer and said that they consider the
price drop in the company's shares as a normal variation.

Usiminas has a 5-percent stake in Argentina's integrated
steelmaker Siderar, and both it and Siderar form part of the
five-company Amazonia international consortium, which has a 70-
percent stake in Venezuelan integrated steel producer Sidor.

Amazonia and Sidor have jointly defaulted on $39.4 million of
debt interest payments while restructuring talks continue with
creditors.


SIDOR: Still Struggling to Survive Financially
----------------------------------------------
The situation at Sidor, the Venezuelan integrated steelmaker,
which recently defaulted on interest payments to the tune of
$31.3 million, is still difficult, revealed a company
spokesperson in an interview with Business News Americas.

According to the spokesperson, income at the Company is down
because international prices are down.

"We export 50 percent of production and we are realizing what we
can do with these prices. Also the economic recession in
Venezuela is serious; little is happening in the construction
industry for example, which is one of the sectors that consumes
steel, the private sector is depressed and the state cannot get
its plans for popular housing off the ground," the spokesperson
related.

"In general, the domestic recession and the low international
price hit us hard, so things aren't easy, we have to try to find
new markets, because the ones we have are weak."

Sidor is currently seeking new opportunities, with offices
abroad, in Brazil, Spain, Italy, Houston, Colombia, Peru and
Ecuador.

According to the spokesperson, the Company's creditors are
enthusiastic because Sidor has taken the necessary steps to face
up to the present situation, in contrast to other steel companies
that have not invested in recent years nor reduced costs. Less
proactive comapanies have therefore been forced to close
production lines or close altogether.

"We are operating as the market permits, which means for the
moment we have had to stop some lines temporarily, but the plant
should be fully operative soon and we are working and
dispatching," the spokesperson said.


SIDOR: Seeks Government Help To Block Steel Imports
---------------------------------------------------
Sidor asked the government to block steel imports, which have
eroded its domestic sales and contributed to its recent default,
relates Bloomberg.

According to Sidor spokesman Gaston Montiel, steel imports have
been boosted by Venezuela's strong currency, which analysts say
is up to 40 percent overvalued. The currency situation makes
imports cheaper.

"If Venezuela doesn't act in time, all of the steel companies in
(the industrial region of) Guayana will suffer the same
consequences as U.S. steel producers," said Montiel. Most steel
is being imported from Asia and eastern Europe, he added.

In February 2000, Sidor reached an agreement with 23 banks led by
Spain's Banco Santander Centro Hispano, Citigroup's Citibank NA,
Venezuela's Banco Provincial SA and Banco Industrial de Venezuela
to extend repayment of $449 million in loans over six and a half
years.

In November this year, Sidor announced plans to seek a fresh debt
restructuring in the face of falling steel prices that have
crimped sales and profitability.




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
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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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