TCRLA_Public/020107.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, January 7, 2002, Vol. 3, Issue 4

                           Headlines



A R G E N T I N A

GATIC SA: Idles Plants, Month Long Lay Off For 3,200 Workers
NII HOLDINGS: Defaults On Principal Payment of $8.3M
NII HOLDINGS: Hires Houlihan Lokey Capital As Financial Advisor


B R A Z I L

TRANSBRASIL: Regulator Extends Deadline To Resume Air Routes


C O L O M B I A

AVIANCA: Issues $209.4M Worth of Shares To Two Shareholders
CHIVOR: Defaults On Bank of America Loan


M E X I C O

ALFA: Shares Rally On Hylsamex Debt Refinancing Optimism
INTERNATIONAL THUNDERBIRD: Mexican Closure Orders Updated


P A R A G U A Y

CORPOSANA: Sale Pre-qualification Guidelines Now Available


V E N E Z U E L A

AMERICAN COMMERCIAL: S&P Drops Sr. Notes to D, Bank Line to B+
SIVENSA: Losses Widen Due To Global Decline In Steel Prices
SIVENSA: Avoids Posting Loss From Sidor
SIVENSA: Orinoco Iron's Future Still Hangs In The Balance
SIVENSA: Posts $7.62M Loss In FY2001 From Sale of Danaven
SIVENSA: Shareholders Voting On Debt Restructure Plan January 25


     - - - - - - - - - -


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

GATIC SA: Idles Plants, Month Long Lay Off For 3,200 Workers
------------------------------------------------------------
Gatic SA, Argentina's largest textile and sportswear
manufacturer, decided late December 2001 to temporarily shut down
seven plants and sack 3,200 workers for a period of one month,
reports The Miami Herald.

The Company attributed its decision to Argentina's current
economic crisis, which has hit the clothing and footwear
industries especially hard.

Gatic filed for protection from creditors in October 2001 after
accumulating $340 million in debt. The Company, at that time,
blamed the filing to smuggling, piracy and the "indiscriminate"
opening up of the Argentine market to foreign competitors.

CONTACT:  Luis Pagani, CEO
          Av. Presidente Perón 2535.
          CP B1650ISG - San Martín
          Provincia de Buenos Aires - Argentina.
          Tel. 4724-7200 Fax.4724-7676


NII HOLDINGS: Defaults On Principal Payment of $8.3M
----------------------------------------------------
NII Holdings, Inc. ("NII"), a unit of Nextel Communications Inc.,
informed the U.S. Securities and Exchange Commission on Thursday
that its operating subsidiaries in Argentina failed to make a
December 31, 2001 scheduled payment of $8.3 million in principal
to a group of banks under its Argentine credit facility.

However NII did make a $2.4 million interest payment under the
credit facility and entered into a forbearance agreement with
over 51% of its lenders. According to the terms of the temporary
deal, lenders have agreed to refrain from enforcing their
respective rights to principal repayments under this facility
until January 22, 2002.

NII also signed a similar forbearance agreement with Motorola
Credit Corporation pursuant to which Motorola Credit Corporation
has agreed to refrain from enforcing any rights to principal
repayments as lender under vendor financing facilities with NII
due to a cross-default caused by the failure to make the
Argentine principal payment until January 22, 2002.

As of December 31, 2001, the aggregate principal balance
outstanding under the Argentine facility was approximately
$108 million and the aggregate principal balance outstanding
under the vendor financing facilities was approximately
$382 million.

NII is currently in discussions with its lenders under these
facilities regarding restructuring the obligations.


NII HOLDINGS: Hires Houlihan Lokey Capital As Financial Advisor
---------------------------------------------------------------
Amidst escalating financial difficulty, NII has retained Houlihan
Lokey Howard & Zukin Capital as financial advisor to assist in
studying NII's strategic alternatives.

NII is beginning negotiations with representatives of the holders
of its 13% Senior Redeemable Discount Notes due 2007, 12.125%
Senior Serial Redeemable Discount Notes due 2008 and 12.75%
Senior Serial Redeemable Notes due 2010, regarding the
restructuring of those obligations.

According to the Company's press release, there is no assurance
that NII will be able to successfully restructure any of its
obligations. NII may be required to sell strategic assets,
reorganize under Chapter 11 of the U.S. Bankruptcy Code or take
other measures.

CONTACT:  Financial Adviser:
          Houlihan Lokey Howard & Zukin Capital
          Franklin W. "Fritz" Hobbs, CEO
          1-800-788-5300 toll free
          Website: www.hlhz.com



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

TRANSBRASIL: Regulator Extends Deadline To Resume Air Routes
------------------------------------------------------------
A spokesman for Brazil's Civil Aviation Department (DAC)
announced that the government's airlines regulator has extended
the deadline for the struggling Brazilian carrier Transbrasil to
return to the air without losing its routes.

The spokesman explained that a formal extension of the deadline,
after the initial 30-day term ended on Thursday, was in the
works.

"We have been closely watching them and receiving information
that they are trying hard to return to regular operations ... As
we can't help them financially, that's the only way we can extend
them a helping hand," the spokesman said.

Transbrasil continues to negotiate with creditors, suppliers and
trade unions to find a way to begin operating as soon as
possible, according to a spokesman of the carrier.

Accordingly, the Company is processing refund claims from some
400,000 passengers who had bought tickets. "It's a long process,
but we are working to repay," he said.

Only five Transbrasil aircraft out of a reduced fleet of 12 are
now in working condition.


CONTACT:  Antonio Celso Cipriani, CFO
          Rua Geral Pantaleao Telles, No. 4,
          Jardim Aeroporto
          04355-040 Sao Paulo, Brazil
          Phone: +55-11-533-7111
          Fax: +55-11-543-9083



===============
C O L O M B I A
===============

AVIANCA: Issues $209.4M Worth of Shares To Two Shareholders
-----------------------------------------------------------
Troubled Colombian carrier Avianca raised $209.4 million after
two of its shareholders bought new equity issued by the Company.
The offering, launched in late December, was intended to raise
$218 million, reports Reuters.

The two shareholders, Valores Bavaria and Fenicia, bought new
shares worth $196.6 million and $12.8 million, respectively,
according to Avianca General Secretary Elisa Murgas.

Valores Bavaria and Inversiones Fenicia are both controlled by
Colombian businessman Julio Mario Santo Domingo.

In November, Valores Bavaria, already Avianca's controlling
shareholder, approved the share issue as part of plans to ensure
that the airline's net assets, which at the time totaled negative
$216 million, turned positive.

The equity raise is a key preparation for Avianca's planned
merger with smaller local rival ACES, which was finally approved
by the government late last year.

CONTACTS: Armenia, Quindio
          Cr14 19-38
          Tel: (57) (6) 7446912 - Fax: (57) (6) 7447588
          Tel: (57) (6) 7442617 - Fax: (57) (6) 7447588

          Barranquilla, Atl ntico
          Cl 72 57-79
          Tel: (57) (5) 3535018 - Fax: (57) (5) 3535396


CHIVOR: Defaults On Bank of America Loan
----------------------------------------
Chivor SA, the Colombian unit of AES Corp., informed the stock
exchange regulator that it missed payments on a syndicated loan
arranged by Bank of America Corp. after it called off a bond sale
last month, reports Bloomberg.

The amount of the loan arranged in 1996 was not disclosed.

In November, Chivor General Manager Eduardo Damian announced that
the Company was seeking to restructure a $150 million syndicated
dollar loan arranged by Bank of America in a transaction that was
conditioned on a planned 470-billion-peso ($203 million) bond
sale. The bond sale was canceled in mid-December because of poor
demand.

At that time, Damian said that Chivor planned to sell the seven-
year peso bonds to replace part of its $340-million debt
with peso-denominated debt.

Chivor owns 8 percent of the country's generating capacity and
was acquired in December 1996 by Chile's Gener SA for $643
million, said Damian. AES took over Chivor last year when it
bought Gener.

CONTACTS:  Bogot , Distrito Capital
           Chivor S.A. E.S.P.
           Cl 98 22-64 Of 518
           Tel: (57) (1) 6236660 - Fax: (57) (1) 6236837
           Email: chivorbo@cable.net.co



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

ALFA: Shares Rally On Hylsamex Debt Refinancing Optimism
--------------------------------------------------------
Alfa SA, a steel and petrochemical producer, saw its shares jump
8 percent to 11.24 pesos in trading Friday, reports Bloomberg.

Investors are betting the Company will successfully refinance
debt at its struggling steel unit, which could set off a rally in
a stock that tumbled 21 percent last year.

TCR-LA previously reported that Hylsamex, the steelmaking
subsidiary of conglomerate Grupo Alfa, was in the process of
renegotiating some $1.1 billion in debts with creditor banks, and
was 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.

CONTACT:  Dionisio Garza Medina, CEO
          Raul Gonzalez Casas, Investor Relations
          TEL. 52 8748-1177  FAX. 52 8748-2544
          rgonzale@alfa.com.mx


INTERNATIONAL THUNDERBIRD: Mexican Closure Orders Updated
---------------------------------------------------------
In a company press release, International Thunderbird
Gaming Corporation (TSE:INB) announced Thursday the
following update concerning the Company's operations:

Mexico

The Company continued to challenge the Mexico Government's
closure orders for the three Mexico operations on three
parallel paths:

    (1) The Mexico City office of the internationally
renowned law firm of Baker & McKenzie has been leading our
efforts through the litigation process, though the Company
is not expecting final decisions for at least three months
and the process could last longer depending on appeals.
Interim legal actions are being pursued that would let the
facilities re-open while final decisions are being heard.

    (2) The Company is assessing a claim under the NAFTA-
Chapter 11 claims procedure. The preliminary analysis
suggests that the Company has a meritorious claim, but the
filing of the claim affects how we proceed on the existing
cases. Our strategy is to choose the direction that will
get us re-opened as quickly as possible. We perceive the
NAFTA claim to be a solid back up.

    (3) The Political and Media campaign has been ongoing
since October 11, 2001 when we were shut down. While the
Fox government may claim it is immune to public pressure,
our story has been picked up by the gaming trade press,
Mexican media as well as by several leaders of US congress
who have directed letters and telephone calls to President
Fox expressing outrage over the matter. While the
diplomatic pressure has not yet yielded the desired result
of re-opening our properties, we feel it will weigh in our
favor in the overall balance. However, we are focusing our
energies on the litigation process.

Peter LeSar rejoins Thunderbird

Mr. Peter LeSar, formerly head of business development at
International Thunderbird, has rejoined Thunderbird in the
same capacity after a two-year hiatus during which he
successfully founded and acted as CEO of a venture-capital
financed, Internet-based translation service company
(www.ispeak.net). He has handed over the reins at iSpeak to
pursue development with Thunderbird. While previously at
Thunderbird, Mr. LeSar developed our project in Pt. Ordaz,
Venezuela. His bio can be found at
www.thunderbirdgaming.com.

Puerto Ordaz expansion opens, receives award - Thunderbird
is pleased to announce that it has opened a 4,000 square
foot expansion to the original 10,000 square foot casino in
Puerto Ordaz, Venezuela on November 30th. Revenues have
been strong since opening, with net win for December
running more than 50% higher than for November, before the
expansion opened. As our operation in Puerto Ordaz is in
its first year, we do not know whether this revenue surge
will be sustained in the New Year, or whether it is a
seasonal spike.

We are also pleased to announce that Fiesta Casino Guayana
has been named "Business of the Year, 2001" for the State
of Bolivar, Venezuela. The prize was issued by
"Fedecamaras" (the commerce chamber's master association
and the leading business association in the country).
"Business of the Year" is an important prize for any
company, and is even more exceptional for a multinational
gaming company. as it is high public recognition of: a) The
positive image and transparency of our business; b) Our
contribution to the community as a good corporate citizen;
and c) The outstanding quality of our management team. The
prize also clearly sets us apart from other gaming
companies in the region.

Strong Fourth Quarter Revenues

Thunderbird is pleased to announce that fourth quarter,
2001 revenues reflecting our proportional interest in
properties in Mexico and Venezuela, are expected to exceed
third quarter, 2001 revenues reflecting our proportional
interests. This strength reflects strong results in Panama
and Venezuela and has been achieved despite the closures,
which we expect to be temporary, in Mexico.

International Thunderbird Gaming Corporation is an owner
and manager of international gaming facilities. Additional
information about the Company is available on its World
Wide Web site at www.thunderbirdgaming.com.

CONTACT:  International Thunderbird Gaming Corporation
          Alex Winch, 416/712-1488 or 858/451-3637
          E-mail: info@thunderbirdgaming.com
          Website: www.thunderbirdgaming.com



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

CORPOSANA: Sale Pre-qualification Guidelines Now Available
----------------------------------------------------------
An official from SNRE, Paraguay's state reform agency, revealed
that the agency has made pre-qualification guidelines available
through February 8 for the sale of state water utility Corposana,
says Business News Americas.

According to the official, companies have until February 21 to
deliver documentation. Pre-qualified companies will have access
to the Corposana data room, with offers tentatively scheduled to
be opened June 27, the official added.

Chicago-based firm Baker & McKenzie has been hired to act as
legal adviser to the sale. Spain-based banking group Banco
Santander Central Hispano have been hired as the financial
consultant.

Due to Corposana's $192-million debt and the lack of government
financing, the private sector would have to invest some $600-
million to make a viable deal, SNRE said.

Only 44.8 percent of Paraguay's population has water access, and
there is neither service quality control nor guarantee of
uninterrupted service, according to the SNRE.

CONTACTS:  LEGAL ADVISER:
           Baker & McKenzie
           Latin America Regional Council
           c/o Eduardo de Cerqueira Leite - Chairman
           Av. Dr. Chucri Zaidan 920, 8th floor
           Market Place Tower I
           04583-904 Sao Paulo, SP, Brazil
           Tel: (55-11) 3048-6800
           Fax: (55-11) 5506-3455
           Email: info-latinamerica@bakernet.com
           Marketing Manager: Ellen Van-Waveren

           Baker & McKenzie Headquarters:
           1 Prudential Plaza, 130 E. Randolph Dr., Ste. 2500
           Chicago, IL 60601
           Phone: 312-861-8800
           Fax: 312-861-2899
           Bakerinfo.com

           FINANCIAL CONSULTANT:
           Banco Santander Central Hispano
           Plaza de Canalejas,1
           28014 Madrid, Spain
           Phone: +34-91-558-10-31
           Fax: +34-91-552-66-70

           CORPOSANA:
           Emilio Botín-Sanz, Chairman
           Angel Corcóstegui Guraya, First Vice-Chairman and CEO
           José Luis del Valle, EVP Finance



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

AMERICAN COMMERCIAL: S&P Drops Sr. Notes to D, Bank Line to B+
--------------------------------------------------------------
Standard & Poor's lowered its rating on American Commercial Lines
LLC's (ACL) 10.25% senior unsecured notes due 2008 to 'D' from
single-'B'-minus and ACL's corporate credit rating to 'SD' from
single-'B'-plus and removed both from CreditWatch, where they had
been placed with negative implications on May 7, 2001. The rating
on ACL's $535 million secured bank facility was lowered to
single-'B'-plus from double-'B'-minus and remains on CreditWatch
with negative implications.

These ratings actions follow ACL's announcement that it did not
make the $15.1 million interest payment on its senior unsecured
notes which was due Dec. 31, 2001, in order to continue
discussions with its bondholders and banks on a financial
restructuring of the company. Entities controlled by investor
Samuel Zell are reported to have acquired over half of the face
value amount of the senior unsecured notes. ACL has adequate cash
to make the interest payment at the end of the 30-day grace
period, as well as to continue day-to-day operations and make
scheduled payments on other obligations.

The secured bank facility creditors will likely fare well in the
financial restructuring, as the bank facility is secured by
essentially all of ACL's assets and the company plans to continue
to make scheduled payments. However, the ratings on the secured
bank facility remain on CreditWatch with negative implications
pending the final outcome of the restructuring.

ACL's operating performance improved in the second half of 2001,
but its significant debt load and limited financial flexibility
has restrained improvement in its credit profile. Financial
flexibility will be further limited in 2002 with a return to
stricter bank covenants after a waiver was granted in early 2001
in exchange for a $40 million prepayment in October 2001 funded
by asset sales.

American Commercial Lines LLC (ACL) is a fully integrated network
of marine transportation companies, operating over 5,000 barges
and approximately 200 towboats on the inland waterways of North
and South America and transporting more than 70 million tons of
freight annually. Additionally, ACL operates marine construction,
repair and ancillary service facilities, and river terminals. At
the end of 2000, ACL employed approximately 3,500 individuals.

CONTACTS:  Standard & Poor's
           Christopher DeNicolo (1) 212-438-1449
           Or
           Philip Baggaley (1) 212-438-7683

           SOUTH AMERICAN OPERATIONS
           VENEZUELA
           James Fox - Vice President
           Tel: US (812) 288-0181   VZ (58-286) 923-3286
           Email: Jim.Fox@acbl.net
           Calle El Callao
           Edificio Torre Lloyd Oficina 3C
           Puerto Ordaz 8015
           Edo. Bolivar, VENEZUELA
           Phone: (58-286) 923-3286
           Fax: (58-286) 923-4820

           DOMINICAN REPUBLIC
           Enrique Gil - Country Manager
           Tel: (809) 246-0842   Fax: (809) 246-0588
           Email: Enrique.Gil@acbl.net
           Carretera Mella Km. 10,
           Muelles Cementos Nacionles, S.A.
           San Pedro de Macorís, República Dominicana
           Phone: (809) 246-0842
           Fax: (809) 246-0588


SIVENSA: Losses Widen Due To Global Decline In Steel Prices
-----------------------------------------------------------
Losses at Siderurgica Venezolana SA (Sivensa) have widened as
shown in the Company's financial results for the year ended Sept.
30, 2001, reports Bloomberg.

The largest publicly traded steel company in Venezuela posted a
$101.7-million net loss during the period, 3 percent more than
2000's net loss of $97.7 million. Losses have increased due to a
worldwide drop in steel prices.

The Company didn't break out fourth-quarter figures. Based on
nine-month losses reported earlier, implied fourth-quarter losses
fell to $36.4 million from an implied loss of $47.6 million a
year earlier.

Sivensa, which recently announced it would ask shareholders to
approve a capital increase and plan to refinance about $250
million in bank debt, posted a loss in each of the last three
years on low steel prices and weak domestic demand.

CONTACTS:  Oscar Augusto Machado, CEO
           Henrique Machado Zuloaga, Chairman of the Board

           Investor Relations. Nueva York
           Geoffrey Bell and Co.
           780 Third Avenue, New York, N.Y.
           Telephone: (212) 888.37.00
           E-mail: d.vandecker@worldnet.att.net
           Telefax: (212) 888.37.07


SIVENSA: Avoids Posting Loss From Sidor
---------------------------------------
Sivensa avoided recording a FY2001 loss from indebted Sidor as it
did not participate in a March 2000 capital increase by the
fellow Latin American members of the Amazonia consortium,
according to a report in Business News Americas.

The consortium controls the Ciudad Guayana integrated steel
company Sidor.

Sivensa's investment in Amazonia is now just recorded at book
value. As of September 30, its Amazonia stake was 13.25 percent,
compared to an original 20 percent.

Sidor defaulted on $31.3 million of interest payments due in
November and has started negotiations with its main creditors,
said Sivensa.

CONTACTS:  SIDOR
           Maritza Izaguirre, President of the Board of Directors
           Martín Berardi, Executive President
           Av. The Stay, General Building,
           Floor 7, Chuao, Venezuela.
           Tel: + 58 212 902-3700


SIVENSA: Orinoco Iron's Future Still Hangs In The Balance
---------------------------------------------------------
The $615-million Puerto Ordaz hot-briquette iron operation has
been temporarily shut down since March 2001. The decision to take
the plant off line came from Operaciones RDI, an affiliate of
Sivensa subsidiary IBH, because of maintenance costs and adverse
market conditions, reports Business News Americas.

"It has not been decided for how long the plant will remain
closed," Sivensa stated in its notes accompanying its FY2001
results.

"Operaciones RDI's results indicate that the continuity of its
operations depend on an increase in their profitability.
Operaciones RDI's management is studying alternatives to allow
this situation to be regularized," it said.

IBH and the then-Australian mineral resource company BHP set up
Orinoco Iron in the late 1990s. BHP (since merged with the UK's
Billiton) stopped investing more money in the plant and wrote off
some $410 million in the project in March 2001.

But it and IBH continue the search for a new shareholder to join
Orinoco Iron and are also negotiating an "important reduction" in
the debt, said Sivensa. BHP said in March last year that it would
help to find a new partner for Orinoco Iron.

Sivensa's FY2001 loss on Orinoco Iron was $56.3 million, more
than triple the $15.5 million the year before. Orinoco Iron's net
loss was $126 million, more than double 2000's US$56 million.

CONTACTS:  ORINOCO IRON
           Alberto Hassan, CEO
           Telephone: (582) 707.64.62
           Fax: (582) 707.64.64
           ahassan@orinoco-iron.com

           Eduardo Gisbert
           Vice-president of Operations
           Telephone: (5886) 94.10.07
           Fax: (5886) 94.00.71/07.17
           egisbert@orinoco-iron.com

           Antonio Oxford Murati
           Director of Institutional Relations
           Phone: (5886) 94.14.53
           Fax: (5886) 94.00.71
           aoxford@orinoco-iron.com


SIVENSA: Posts $7.62M Loss In FY2001 From Sale of Danaven
---------------------------------------------------------
Venezuelan steel group Sivensa said it sold its stakes in Danaven
and related auto-sector companies last year in May to the US-
based Dana Corp for $21 million, and recorded a $7.62-million
loss in its FY2001 results, says Business News Americas.

Sivensa sold the stakes in a bid to reduce the group's debt,
which at that time totaled an estimated $264 million debt.

CONTACTS:  DANAVEN
           MANAGEMENT OF SALES
           Jose Luis Gonzalez
           Tels. (0241) 8396216
                 (0241) 8396191 8396559
           Fax:  (0241) 8322364

           DPTO. OF COBRANZA
           Lourdes Marquez
           Tel.  (0241) 8396516

           DPTO. OF OFFICE
           Girman Blanco/Claudia Aragon
           Tels. (0241) 8396216


SIVENSA: Shareholders Voting On Debt Restructure Plan January 25
----------------------------------------------------------------
Sivensa shareholders will hold an annual extraordinary meeting on
January 25, says Business News Americas. On that day,
shareholders are expected to vote on a planned restructuring of
almost $242 million of the group's $479-million debt.

Previous reports have suggested that current shareholders will be
asked to reduce their stake in the group by 15 percent and forego
dividends until 2007 so debt payments can be made. The proposal
also includes a 522,800,000 share issue, totaling $14 million,
to bank creditors as part of the deal.

The plan is the latest in several efforts to restructure
Sivensa's debts since mid-1999.

The proposed agreement allows for greater flexibility for payment
and better guarantees of collateral for the banks, with increased
participation in the company, according to CFO Gustavo Machado.




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 2002.  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
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.


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