TCRLA_Public/020116.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Wednesday, January 16, 2002, Vol. 3, Issue 11


BANCO HIPOTECARIO: Reestablishing Credit Line Main Priority
BANCO RIO: Argentine Instability Affecting Santander's Plans
BBVA/SANTANDER: Moody's Confirms Ratings, Stable Outlook
SCOTIABANK QUILMES: Commitment High Despite Cloudy Outcome
STOCK EXCHANGE: Solicits Trade Advice From CB, Economy Ministry


CVRD: No Date Set For Government's Stake Sale
CVRD: Iron Ore Exports Set a New Record in 2001
EDITORA CAMELOT: Hunts For Investor As Closure Imminent
EMBRAER: Avibras-Rosoboronexport Deal May Upset Air Force Bid
MASTER SA: Ends Operations Amid Shareholders' Dispute
TRANSBRASIL: February 3 Deadline Approaches, License At Stake
VARIG: Report On Financial Situation Ready For BNDES
VARIG/VASP: Feud Erupts Between Airlines


MADECO: Temporarily Reduces Argentine Operations


ELECTROLIMA: Superservicios To Intervene Before January 18


AHMSA: Executive Post 2001 Results, 2002 Investment Plans
GRUPO DESC: Analyst Predicts Shares May Rise Another 15% In 2002


SANSA: Faces Definitive Suspension If Unable To Fix Problems


AEROCONTINENTE: Escapes Bankruptcy, Continues To Fly
COBRELSA: Restructuring Plan Gets Nod From Creditors
SIDERPERU: Proposed Debt Refinancing Agreement Delayed


AVENSA: Likely To Get Cash Injection On Government's Plan

     - - - - - - - - - -


BANCO HIPOTECARIO: Reestablishing Credit Line Main Priority
The Banco Hipotecario Argentino, one of the country's largest
mortgage banks, lost some $400 million in its absorption of the
"cost" of devaluing the peso in its outstanding dollar-
denominated loans, reveals EFE.

According to Banco Hipotecario Argentino President, Julio Macchi,
the bank is waiting to see how the government will compensate for
the losses it took when forced to convert the dollar-denominated
loans into peso-denominated loans.

"For the Banco Hipotecario, approximately 98 percent of its loan
portfolio is in dollars," he said.

The bank hopes property sales will aid an attempt to put together
$70-$80 million to reestablish a line of credit. That option,
however, depends on whether the government eases the tight
financial restrictions it has applied in order to stop capital
flight at a time when banks lack funds, said Macchi.

BANCO RIO: Argentine Instability Affecting Santander's Plans
Investors and analysts predict that Santander Central Hispano SA,
Spain and Latin America's largest bank, will scrap its $350
million plan to boost its stake in its Argentine banking unit
because of that country's unstable financial system, says

According to the report, Santander has stock options expiring
January 15 that let it increase its stake by 18.5 percent to
almost 100 percent in Banco Rio de la Plata SA, Argentina's
fourth-biggest bank, paying with Santander shares.

"Argentina's financial system looks like a time bomb," said
Francisco Hurtado, who helps manage 180 million euros ($160
million) at BCH Finances in Barcelona. "It would be very risky to
invest more money where you're already losing so much."

The stock options are with Merrill Lynch & Co., an intermediary
between the seller, Argentina's Perez Companc family, and

Aside from the options, Santander may have to boost capital by as
much as 1 billion euros just to avoid a possible collapse of Rio,
which employs about 5,000 workers, investors have said.

Ten months ago, Santander shareholders voted to create as many as
30.2 million new shares, increasing outstanding shares by 0.7
percent, to swap for the stake in Rio. Rio shares have fallen
about 75 percent since the move was approved March 10.

"Santander and other Spanish companies must first agree with the
Argentine government and international authorities on a rescue
plan before considering investing any more money," said Francisco
Hurtado, who helps manage 180 million euros ($160 million) at BCH
Finances in Barcelona.

Top executives from Santander and other Spanish companies are
negotiating with the Argentine government to curb their potential

The options allow Santander to buy the Rio shares at an average
price per share of $5.41. Rio shares last traded Jan. 4 and
closed at 1.75 pesos ($1.09).

           Ana Patricia B. S. de Sautuola y O'Shea, Chairman
           Jose L. E. Cristofani, Executive Vice Chairman and CEO
           Pablo Caride, Corporate Finance
           Bartolome Mitre 480
           1036 Buenos Aires, Argentina
           Phone: +54-(0)14-341-1081-1580
           Fax: +54-(0)14-341-1074-1084

           Shearman & Sterling
           599 Lexington Avenue
           New York, NY 10022-6069, USA
           Tel: (+1 212) 848-4000
           Fax: (+1 212) 848-7179
           Firm Managing Partner: Robert C. Treuhold

BBVA/SANTANDER: Moody's Confirms Ratings, Stable Outlook
Moody's Investors Service has confirmed the Aa2/P-1/B+ ratings of
Banco Bilbao Vizcaya Argentaria (BBVA) and the Aa3/P-1/B ratings
of Santander Central Hispano (SCH) at the backdrop of the present
Argentine crisis.

These ratings continue to have stable outlooks.

Moody's confirmed the ratings after concluding an assessment that
a complete write-off of these two banks' investment in their
Argentine bank subsidiaries -- Banco Frances, and Banco Rio,
respectively -- should not materially deteriorate the
creditworthiness of BBVA or SCH.

According to the ratings agency, the Argentine exposure is
relatively limited compared to these two groups' consolidated
assets, capital, and earnings. However, Moody's cautioned that
any existing provisions may have to be topped up in a capital
write-off scenario.

The ratings confirmation is also based on the assumption that the
Argentine crisis will not have a direct material impact on BBVA's
and SCH's other Latin American operations.

Moody's noted that, as opposed to other scenarios of massive
cross-border credit exposures to emerging markets by large
financial groups in developed markets, the two Spanish banks'
involvement in Argentina -- and elsewhere in Latin America -- is
primarily through their direct investment in and control of local
banks. That said, these direct investments are very significant
compared to the two groups' capital base, and the inherent risk
of the Latin American business has already been incorporated in
BBVA's and SCH's ratings for some time, added Moody's.

At the same time, Moody's also cautioned that the possibility for
new capital injections by BBVA or SCH into their subsidiaries in
Argentina could represent a rating event if a credible crisis-
removal and risk-protection scenario will not accompany such
further investments.

           Samuel S. Theodore
           Managing Director
           Financial Institutions Group
           Tel. 44 20 7772 5454

           Maria Cabanyes
           Senior Vice President
           Financial Institutions Group
           Tel. (34-91-310-1454)

           SANTANDER (SCH)
           Emilio Botin-sanz De Sautuola Y Garcia De Los Rios -
           Chairman, OR
           Angel Corcostegui Guraya - First Deputy Chairman, OR
           Jaime Botin-sanz De Sautuola Y Garcia De Los Rios -
           Deputy Chairman, OR
           Matias Rodriguez Inciarte - Deputy Chairman, OR
           Angel Corcostegui Guraya - Deputy Chairman & Chief

           Their Address:
           Paseo De Pereda, Numeros 9 AL 12
           Santander, Spain
           Phone   +34 94 2206100

           BANCO FRANCES
           Gervasio Collar Zabaleta, Chairman
           Antonio Martinez Jorquera, CEO
           Jorge Bledel, Head of Treasury and Wholesale Banking

           Their address:
           Reconquista 199
           1003 Buenos Aires, Argentina
           Phone: +54-11-4346-4000
           Fax: +54-11-4346-4320

SCOTIABANK QUILMES: Commitment High Despite Cloudy Outcome
Canada's largest investor in Argentina, Bank of Nova Scotia, said
that its "worst-case scenario" remains taking a loss equivalent
to about one quarter's earnings, but added that it could not
predict if that would happen, reports Reuters.

"We sincerely hope that the worst case does not occur for the
sake of the Argentine people and our shareholders. However, no
one can predict whether or not this will materialize," Canada's
No. 4 bank said.

Meanwhile, the bank said it would work with Argentine authorities
to help resolve the "liquidity challenges faced by all the banks
in Argentina."

Scotiabank said that "while it is extremely volatile," it would
continue to work with the government.

"Scotiabank Quilmes, our subsidiary in Argentina, is a good bank
and well run with a great team of people. As well, it was
profitable in fiscal 2001," it said.

Several analysts have suggested that Scotiabank withdraw from the
Latin American nation altogether. However, Scotiabank Quilmes
denied rumors that it might close its retail operations in
Argentina and stressed that it remained committed to defending
its clients' interests.

Richard Waugh, Scotiabank's Vice-President of International
Banking, said: "We have one of the best balance sheets in
Argentina. The rating agencies have confirmed we're one of the
best-managed banks in Argentina. And we're profitable. So why
should we leave?"

CONTACTS:  Alan Macdonald
           Chief Executive Officer
           Phone: (54-11) 4338-8000
           Fax: (54-11) 4338-8033
           Mail: 6th Floor
           Gral. J.D. Peron 564
           (C1038AAL) Buenos Aires

           Roy D. Scott
           Vice-President and Managing Director, Latin America
           Phone: (54-11) 4394-8726
           Fax: (54-11) 4328-1901
           Mail: P.O. Box 3955
           C1000WBN Correo Central
           Buenos Aires, Argentina

           Av. Leandro N. Alem 1050, Piso 2
           C1001AAS-Buenos Aires, Argentina
           +54 (11) 4316 5700

           Buenos Aires Office
           Cerrito 268
           C1010AAF Buenos Aires
           Mail Address :
           Casilla de Correo Central 896
           C1010AAF Buenos Aires
           Telephone: [54] (11) 4370 6000, 4370 6700, 4370 6900
           Telecopier: [54] (11) 4370 6800, 4370 6339

           COrdoba Office
           Boulevard Chacabuco 492
           X5000IIR C›rdoba
           Telephone: [54] (351) 420 2300
           Telecopier: [54] (351) 420 2332

STOCK EXCHANGE: Solicits Trade Advice From CB, Economy Ministry
The Buenos Aires Stock Exchange, closed for almost a week now,
soought guidance from the Central Bank and Economy Ministry
regarding trading conduct since the government froze bank
accounts and devalued the currency.

According to a report released by Bloomberg, brokers such as Juan
Napoli, Vice President of Napoli Sociedad de Bolsa, have spent
the week tackling calls from clients who were afraid their funds
may be confiscated. Napoli said he has no answer for questions
concerning when the exchange may resume trading or at what rate
it will clear $28 million in pending dollar transactions.

"The whole financial market is trying to figure if it still has a
role in Argentina," said Dario Lewkowicz, who manages about $35
million for Exprinter Administradora. "With the current
restrictions, the market is reduced to its most minimal and
primitive expression."

President Eduardo Duhalde, who took office January 1, has frozen
more than a third of Argentina's $67 billion in bank deposits,
possibly for as long as 21 months, in a bid to prevent banks from
failing. All U.S. dollar certificate of deposit accounts were
effectively seized for at least a year. Funds above $3,000 in
individuals' dollar savings accounts were frozen, along with
deposits of more than $10,000 to checking accounts.

Government officials said they could ease some of the
restrictions this week to avoid deepening the nation's recession.
The economy has contracted for the past three years.

Meanwhile, Luis Alvarez, Secretary General of Mercado de Valores
SA, which operates the Buenos Aires trading floor, said he
doesn't know when trading will resume.

Traders revealed that talks with the Central Bank and Economy
Ministry center on the fact that many brokers, because they are
legally registered as individuals, have had their checking
accounts frozen at $10,000 by a last week's government order.

Additionally, the exchange needs advice on how to clear dollar-
denominated securities pending from Friday as well as other
transactions that were paid with checks written on accounts that
have since been frozen, they said. The exchange is currently
negotiating with regulators to make it easier for investors to
access their bank accounts for capital markets transactions,
Napoli said.


CVRD: No Date Set For Government's Stake Sale
A spokesperson for state development bank, BNDES announced that
the date of the Brazilian government's sale of its remaining
31.52 percent stake of Rio de Janeiro-based diversified mining
company Companhia Vale do Rio Doce (CVRD) is yet to be set,
reports Business News Americas.

The announcement came in response to a report by local business
daily, Valor Economico that the sale is scheduled to take place
before April. Its report also mentioned BNDES' privatization
council has yet to meet to set a date for the sale, which
according to Banco Brascan's sector analyst, Luiz Caetano will
greatly increase CVRD's liquidity internationally, raise its
share price, make the Company more transparent and help it raise

"No decision has been made on when the sale will be and BNDES is
making no comment on when that decision will be made," the
spokesperson said.

The government, Valor said, is expected to generate between $1.6
billion and $1.8 billion from the sale. The Sao Paulo paper
reported one of the government's advisers, Merrill Lynch, is
recommending an international float, yet the paper also said it
is thought 30-40 percent of the 31.52 percent stake would be
offered to the domestic market with some allocated to CVRD

CONTACTS:  Roberto Castello Branco

           Andreia Reis

           Barbara Geluda

           Daniela Tinoco

CVRD: Iron Ore Exports Set a New Record in 2001
On January 8, CVRD revealed that its iron ore and pellets exports
reached an all time high in 2001. Despite the global recession,
CVRD group exports, computed as the external sales of the parent
company, Socoimex, Samitri, the pelletizing joint ventures
Nibrasco, Itabrasco, Hispanobras and Kobrasco and Urucum, totaled
103.2 million tons last year, compared to 101.6 million tons in
2000, a 1.6% increase. Socoimex was consolidated into CVRD on
August 2000. Samitri was added in October 2001.

CVRD asserts the result reflects its ability to weather the
downcycle, thanks to its diversified portfolio of high quality
products and to the effectiveness of its client-oriented policy.

EDITORA CAMELOT: Hunts For Investor As Closure Imminent
Brazilian publisher, Editora Camelot is now on the lookout for
another investor to ensure the survival of the Brazilian version
of the Forbes periodical, reports Jornal do Brasil.

The search began after the publisher's controller, the Patrimonio
bank, left the enterprise. Failure to find a new investor will
bring the publisher's operations to an end.

Editora Camelot received investments of R$35 million from
Patrimonio, R$4 million of which went into Forbes. The publisher
has seen its portfolio of products gradually diminish as journals
were discontinued.

EMBRAER: Avibras-Rosoboronexport Deal May Upset Air Force Bid
Brazilian rocket and missile maker, Avibras Aerospacial SA
announced it signed a conditional deal with Russian arms
exporter, Rosoboronexport to produce Sukhoi fighter jets in
Brazil. The deal hinges on Rosoboronexport's ability to garner a
contract from the Brazilian air force, reports Reuters.

The deal is likely to upset Brazil's Embraer, one of the world's
largest civil aircraft manufacturer and Brazil's top exporter.
Embraer, so far, has been the only company that has offered to
make planes locally if it wins the air force contract.

Embraer and five other groups are competing for a contract from
Brazil's air force to revamp its aging fleet of fighter jets with
the purchase of 24 new planes for up to $700 million.

Embraer, together with France's Dassault Aviation SA, which has a
stake in Embraer, have offered to build Dassault's Mirage fighter
jets at Embraer's factories in Brazil if they win the contract.

The government is likely to favor Embraer and Dassault's offer
because it wants to support the country's flagship company and
keep jobs in the country.

Brazil's Air Force is expected to choose its top candidate by
March this year.

           Bob Sharp, Press office mgr.
           Wagner Gonzalez, Press officer
           Phone +55 12 3945 1311
           Fax + 55 12 3945 2411

MASTER SA: Ends Operations Amid Shareholders' Dispute
Master S.A. Tecidos Plasticos Brazilian producer of raffia bags,
shut down its four factories and fired its 725 employees, reports
Jornal do Comercio. The action was a result of a dispute between
the Company's majority shareholder, Portus, a pension fund for
employees of thirteen port companies, and Master Incosa

The government ordered an intervention into Master last year,
investigating alleged irregularities regarding the management of
Master by the former directors of Portus. Other issues included
outside-exchange shares trading, buying property without the
correct documentation and retaining 31 percent of the shares in
Master, which exceeds the legal limit of 20 percent for an
institution of this type. The legal proceedings related to the
dispute will continue in the courts in Ceara.

Master was the Brazilian leader in the production of raffia bags
in the early nineties, with a turnover of $50 million.

TRANSBRASIL: February 3 Deadline Approaches, License At Stake
Brazilian airline Transbrasil must present a plan which explains
how it will resume operations, states which routes it intends to
operate, and provides information on the condition of its
aircraft, to the DAC (Departamento de Aviancao) by February 3,
2002, or lose its operating license, reports O Globo.

The DAC said that it has extended the deadline for the company to
present its plan from Jan. 3 to Feb. 3 due to low demand for
landing slots from other airlines.

In a related report, Transbrasil is negotiating the entrance of a
new Company capital partner as part of an attempt to resume
operations. The government decided not to fund it.

The deal details are being kept secret, but the Company said it
is not dealing with TAM and Gol, who offered to transport
Transbrasil's passengers in exchange for the use of its hangars.

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

VARIG: Report On Financial Situation Ready For BNDES
Brazilian air transportation company, Varig completed a report
detailing its critical situation, reports Gazeta Mercantil.
The report, which was compiled in order to comply with Minister
Sergio Amaral's request, will be sent to the Brazilian
development bank BNDES (Banco Nacional de Desenvolvimento
Social). Next BNDES will develop a study on air transportation
sector to be used as parameter for its restructuring program.

Meanwhile, Varig continues to look for partners. Reports suggest
that the Company is ready to sell 20 percent of its capital,
which is the limit imposed by Brazilian law.

Company President, Ozires Silva, said the move is necessary to
reduce the Company's problems, particularly its debt situation.

The company has not commented on the possibility that it has
contracted a bank to undertake an evaluation of its financial
state, stating that it does not want to create speculation in its

VARIG CONTACTS:  VARIG Brazilian Airlines, Miami
                 Jeff Kriendler, 305/866-2115

                 Legal Department:
                 Rua 18 de Novembro nr. 800 Navegantes
                 Zip : 90240-040
                 City : Porto Alegre / RS - Brazil
                 Telephone numbers: (51) 358-7039/7040
                                   (51) 358-7010/7042

                 Arthur Andersen S/C
                 Rua Alexandre Dumas 1981
                 Cep: 04.717-906 - Centro / Sao Paulo / S P-
                 Tels.: (11) 5504-8200
                 Fax:  (11) 5504-8373

                 Leir s  Stortti
                 Av. Almte. Silvio de Noronha, n  365 -
                 Bloco "A" - s/416
                 Centro - Rio de Janeiro - RJ
                 Cep.:  20021-010
                 Tels.: (21) 3814-5401/5402/5403/5415
                 Fax:  (21) 3814-5543

VARIG/VASP: Feud Erupts Between Airlines
The war between Varig and Vasp in the Brazilian cargo
transportation market heated up, following the appointment of
Jose Carlos Rocha Lima as Chairman of Varig Log.

Lima left Vasp's office, where he had been for three years, to
accept the position at Varig Log, the logistics company created
by Varig. Varig Log reported an income of $493 million in 2000
and $608 million in 2001.

Meanwhile, Vasp announced it intends to expand operations in the
cargo sector. It will open 17 Vaspex franchises in the country
with a total of 252 units. Vasp intends to reach 350 stores until
late 2002, a growth of 38 percent.

Varig and VASP are two of Brazil's biggest airlines, which have
dropped several routes over the past few months.

           (For Investors)
           Cesis Canhedo, Chief Financial Officer
           PraŘa Comandante Lineugomes, s/n
           04626-910 Sao Paulo, Brazil
           Phone: +55-11-532-3000
           Fax: +55-11-533-0444


MADECO: Temporarily Reduces Argentine Operations
Copper products manufacturer, Madeco informed Chile's securities
regulator that it would "significantly" reduce its operations in
Argentina on a temporary basis, reports Reuters. The Chilean
company, which has assets in Argentina worth $145 million, didn't
provide more details.

Madeco also said it would restructure its debt to counter the
negative impact of Argentina's economic troubles and a regional

The comapany hired Salomon Smith Barney to assist it in devising
a financial restructuring plan, "taking into account the effects
of a deep recession in Argentina, where the Company has
significant investments, as well as the lower pace of growth in
the region," Madeco said.

The plan includes reorganizing its financial debt, increasing
operating efficiency and studying a possible capital increase,
the firm said.

Madeco is the first Chilean company with interests in Argentina
to cut back operations there.

CONTACTS:  Investor Relations
           Ureta Cox 930, Santiago-Chile
           Voice: 56-2 5201380
           Fax: 56-2 5201545


           Oscar Ruiz-tagle Humeres, Chairman
           Albert Cussen Mackenna, CEO
           Santiago Edwards Morice, CFO
           Enrique S. Arangua, General Counsel

           Their Address:
           Ureta Cox 930
           Santiago Chile
           Phone   +56 2 520 1000
           Home Page


ELECTROLIMA: Superservicios To Intervene Before January 18
Colombia's Superservicios is expected to take part in the
administration of Electrificadora del Tolima (Electrolima) before
January 18, 2002, reports Portafolio.

The announcement, which was made by Diego Humberto Caicedo of
Superservicios, came after it was discovered that the Company is
in a critical situation, and is close to having to carry out
daily one-hour electricity cuts.

Electrolima provides services to 269,000 local users, but has one
of the highest energy loss percentages nationally since it lacks
the money to carry out repairs.


AHMSA: Executive Post 2001 Results, 2002 Investment Plans
Ahmsa, in 2001, produced a little more than 3Mt of crude liquid
steel, or primary production, in line with its annual operational
plan and the market, Alonso Ancira Elizondo, Vice President and
CEO of Ahmsa, revealed in an interview with Business News

As a result of transforming the liquid steel into finished flat
and long products, the Company sold a total of 2.67Mt, the Ahmsa
executive said.

Ahmsa expects at least in the first half of this year, for the
figures to be proportionately similar to last year, in terms of
both crude steel and finished products.

"But we're forecasting an increase from the second half onward,
when the global steel market is expected to stabilize and prices
pick up," said Elizondo.

For this year, the Company still hasn't finished deciding on the
amount, or where investments will be made this year. But
according to Elizondo, investments, basically, will be in
maintenance programs at all units, such as blast furnaces.

It also intends to keep developing coal and iron ore mines.

"Given that the company is in the process of emerging from
bankruptcy protection, we don't have access to bank loans so
investments depend on our own resources," said Elizondo.

Ahmsa has two plants in Monclova, in the northern Mexican state
of Coahuila, and is Mexico's largest steelmaker in terms of
production and sale of flat products such as hot and cold rolled
steel, plates, sheets and chrome-plated products. It also makes
long products such as profiles, structurals and wire rod. The
company is controlled by Mexican industrial holding GAN (Grupo
Acereros del Norte).

CONTACTS:  Alonso Ancira Elizondo, CEO, Vice Chairman, Pres.&CEO
           Jorge Ancira Elizondo, Chief Financial Officer
           Manuel Ancira Elizondo, Chief Operating Officer

           Their Address:
           Prolongacion B. Juarez s/n,
           Monclova , Coahuila 25770
           Phone: +52 86 33 81 72
           Fax: +52 86 33 65 66

GRUPO DESC: Analyst Predicts Shares May Rise Another 15% In 2002
Desc SA (DESCB MM), an industrial group with subsidiaries in
auto parts, petrochemicals, food and real estate, saw its shares
drop 20 centavos, or 3.9 percent, to 5 pesos, reports Bloomberg.

Salomon Smith Barney Inc. analyst, Laura Forte recommended
investors buy shares in Desc on the expectation the stock might
rise another 15 percent this year.

Several analysts believe that Mexican industrial groups may be
the first companies to benefit from an economic recovery in the
U.S., which buys almost 90 percent of Mexican exports.

           Paseo de los Tamarindos # 400-B
           Mexico, D.F. 05120
           Phone: (5255) 261-80-00
           Fax: (5255) 261-80-96

           Arturo D'Acosta Ru­z, Chief Financial Officer
           Tel: (5255) 261 8000

           Alejandro de la Barreda, Investor Relations
           Tel: (5255) 261 8000 ext 2806

           Adriana Estrada Vergara, Investor Relations
           Tel: (5255) 261 8000 ext 2846


SANSA: Faces Definitive Suspension If Unable To Fix Problems
Nicaraguan Transportation Minister Pedro Solorzano warned that he
will "definitively suspend" the operations of national airline
Servicios Aereos Nicaraguenses S.A. (SANSA), if it does not
resolve problems affecting hundreds of passengers, reports EFE.

"If this company does not meet the requirements of the law and
international agreements, and does not serve its passengers, its
operations could be suspended definitively," Solorzano said.

SANSA, which started operations four months ago, was repeatedly
having up to ten-hour delays in flights. Passengers also
complained about poor baggage handling.

On Friday, Solorzano spoke with SANSA General Manager Uriel
Lanzas, and demanded that he be accountable to his clients, and
at least issue a press release explaining the crisis.

Solorzano said he has contacted other airlines in an effort to
resolve SANSA-ticketed passengers' problems.


AEROCONTINENTE: Escapes Bankruptcy, Continues To Fly
The Peruvian airline AeroContinente, which operates in Chile
through the subsidiary AeroContinente Chile, managed to escape

According to a report by El Diario, AeroContinente reached an
agreement with creditors involving debts of $17.1 million, of
which $4.5 million is owed to the Chilean Treasury and $1.1
million with Shell. The airline also retained its flying license
after it paid 30 million pesos to the Chilean aeronautics

AeroContinente operates with 150 on-land employees and 80 on-
board employees. It has two aircraft Boeing 767-200 and three
aircraft Boeing 737.

COBRELSA: Restructuring Plan Gets Nod From Creditors
Insolvent Peruvian copper products manufacturer, Cobres Laminados
(Cobrelsa) obtained the go-ahead from its creditors and will
implement a restructuring plan aimed at paying $15.3 million in
debts over a 10-year term, reports Gestion.

Cobrelsa plans to invest $400,000 next year to double its
production capacity to 600 tons per month. It will also search
for strategic partners in the US and Mexico and take out a
$500,000-loan. The company forecasts sales of $5 million for this
year, although its restructuring plan is aimed at generating $3.5
million in the first year.

Cobrelsa's goal is to sell 150 tons per month by the end of this
year, exporting 50 percent to countries like Chile, Ecuador,
Colombia, Venezuela, Mexico and Bolivia, besides the US.

Cobrelsa was declared insolvent for the second time in February
2001. But in July of the same year, creditors decided not to
liquidate the Company after it won a $2.5-million contract to
supply the Peruvian Central Bank with copper coins.

SIDERPERU: Proposed Debt Refinancing Agreement Delayed
Agreement to the proposed debt refinancing of Siderperu has been
set back by a month because the Peruvian integrated steelmaker
still lacks the adjustments required by the creditors to the
draft refinancing as proposed by the Company's current
management, says Business News Americas.

In December last year, shareholders and creditors agreed on a
formula, the terms of which include establishing a repayment
program with fixed and variable payments, based on the Company's
cash flow, to the various groups and subgroups of creditors.
Financial creditors would be subject to guarantees, while the
Company will have access to limited credit for working capital
and investments.

No figures were given, but a report released by Lima business
daily Gestion suggested that the preliminary plan was for
Siderperu to pay off the $100-million debt during seven years and
renew revolving credit facilities of up to $10 million to
maintain the Company's development.

Siderperu went into a form of bankruptcy protection to completely
refinance itself in August, blaming the global steel crisis and
market "confusion" about the Company's solidity.


AVENSA: Likely To Get Cash Injection On Government's Plan
Venezuela's virtual national carrier, Avensa is likely to get a
cash injection if the Government pushes through with its plan to
have an airline running flights to Caribbean islands (to bring
tourists to Margarita mainly), reports El Nacional.

Avensa believes flights to places, such as Barbados and Trinidad
& Tobago are risky due to reduced passenger numbers. However, the
airline said it is willing to take on the plan if President
Chavez turns it into a definitive national carrier.

Meanwhile, the government has talked to military aviation groups
regarding the plan. The Venezuelan air force finances could also
be co-opted since Avensa believes $36 million would be needed in
acquiring three small planes.

Avensa would also like to take on 'social' flights currently run
at a loss by the Servicio Autonomo de la Fuerza Aerea to El
Vigia, Tucupita, La Fria, Barinas, Guasdualito, Caicara and San
Fernando de Apure.  Avensa is 20-percent government-owned


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, Edem
Psamathe P. Alfeche and Fe Ong Va¤o, Editors.

Copyright 2002.  All rights reserved.  ISSN 1529-2746.

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