TCRLA_Public/020117.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

            Thursday, January 17, 2002, Vol. 3, Issue 12

                           Headlines


A R G E N T I N A

BANCO FRANCES: Moody's Cuts BFSR Rating to E from E+
BANCO GALICIA: Moody's Drops Financial Strength Rating To E
BANCO HIPOTECARIO: Moody's Cuts BFSR To Lowest Level
BANCO RIO: Moody's Lowers BFSR To E from E+
BANCO RIO: SCH To Move Ahead On Purchase Of Remaining Stake

BLADEX: Fitch Downgrades Foreign Currency Ratings
HSBC BANK: Moody's Reduces BFSR To Lowest Level
HSBC BANK: Firms Cut Forecast On Parent Amid Argentine Crisis
REPSOL YPF/YPF: Fitch Downgrades Ratings On Regional Uncertainty
SCOTIABANK QUILMES: BFSR Lowered To Lowest Level by Moody's


B R A Z I L

CVRD: Brazil, BNDES To Sell 31.5% Common Stake 1Q02


M E X I C O

ABC-NACO: Sale to TCF Railco Excludes Dormant Mexican Subsidiary
ALFA: Shares Climb On Fitch's Mexico Credit Rating Upgrade
BANCRECER: Banorte To Begin 12-Month Integration Program
BUFETE INDUSTRIAL: Creditors May Seek Bankruptcy Action Soon
MEXICANA: Airbus 319 Replaces Boeing 727 To Reduce Fuel Costs
PULSAR INTERNATIONAL: Restructuring Delay Has Creditors Uneasy
STARMEDIA NETWORKS: Milberg Weiss Reiterates Filing Deadline


P E R U

SIMSA: Shareholders Disagree Over Problems, Solutions, Future


     - - - - - - - - - -


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

BANCO FRANCES: Moody's Cuts BFSR Rating to E from E+
----------------------------------------------------
Moody's Investors Service cut the bank financial strength rating
(BFSR) of BBVA Banco Frances to E, from E+. The rating outlook is
stable. The E rating is the lowest level of BFSR assigned by
Moody's to banks worldwide.

The BFSR is Moody's opinion of a bank's stand-alone
creditworthiness, and measures the likelihood that a bank will
require financial assistance from third parties.

The downgrade reflects Moody's view that the devaluation of the
Argentine peso, coupled with foreign exchange and deposit
controls, increases the potential for extremely high credit
losses for all banks in the system, and raises the question of
the availability of full shareholder support to cover those
losses.

Moody's noted that this precludes any differentiation among the
banks, whether locally or foreign owned, public sector or
private, in terms of financial strength or franchise value. All
the rated private and public sector Argentine banks are therefore
now rated equally.

CONTACTS:  MOODY'S INVESTORS SERVICE (New York)
           Gregory W. Bauer, Managing Director
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           Jeanne Del Casino, Vice President - Senior Analyst
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           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


BANCO GALICIA: Moody's Drops Financial Strength Rating To E
------------------------------------------------------------
Moody's Investors Service downgraded the bank financial strength
rating (BFSR) of Banco de Galicia y Buenos Aires, S.A. to E, from
E+. The rating outlook is stable.

The downgrade reflects Moody's view that the devaluation of the
Argentine peso, coupled with foreign exchange and deposit
controls, increases the potential for extremely high credit
losses for all banks in the system, and raises the question of
the availability of full shareholder support to cover those
losses.

Moody's noted that this precludes any differentiation among the
banks, whether locally or foreign owned, public sector or
private, in terms of financial strength or franchise value. All
the rated private and public sector Argentine banks are therefore
now rated equally.

CONTACTS:  MOODY'S INVESTORS SERVICE (New York)
           Gregory W. Bauer, Managing Director
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           Jeanne Del Casino, Vice President - Senior Analyst
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653


BANCO HIPOTECARIO: Moody's Cuts BFSR To Lowest Level
----------------------------------------------------
Moody's Investors Service downgraded the bank financial strength
rating (BFSR) of Banco Hipotecario, S.A. to E, from E+. The
rating outlook is stable.

The downgrade reflects Moody's view that the devaluation of the
Argentine peso, coupled with foreign exchange and deposit
controls, increases the potential for extremely high credit
losses for all banks in the system, and raises the question of
the availability of full shareholder support to cover those
losses.

Moody's noted that this precludes any differentiation among the
banks, whether locally or foreign owned, public sector or
private, in terms of financial strength or franchise value. All
the rated private and public sector Argentine banks are therefore
now rated equally.

CONTACTS:  MOODY'S INVESTORS SERVICE (New York)
           Gregory W. Bauer, Managing Director
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           Jeanne Del Casino, Vice President - Senior Analyst
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653


BANCO RIO: Moody's Lowers BFSR To E from E+
-------------------------------------------
Moody's Investors Service lowered the bank financial strength
rating (BFSR) of Banco Rio de la Plata, S.A. to E, from E+. The
rating outlook is stable.

The downgrade reflects Moody's view that the devaluation of the
Argentine peso, coupled with foreign exchange and deposit
controls, increases the potential for extremely high credit
losses for all banks in the system, and raises the question of
the availability of full shareholder support to cover those
losses.

Moody's noted that this precludes any differentiation among the
banks, whether locally or foreign owned, public sector or
private, in terms of financial strength or franchise value. All
the rated private and public sector Argentine banks are therefore
now rated equally.

CONTACTS:  MOODY'S INVESTORS SERVICE (New York)
           Gregory W. Bauer, Managing Director
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           Jeanne Del Casino, Vice President - Senior Analyst
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653


BANCO RIO: SCH To Move Ahead On Purchase Of Remaining Stake
-----------------------------------------------------------
Spain's Banco Santander Central Hispano SA (SCH) will follow
through with the purchase from Merrill Lynch & Co of the
remaining 18.54 percent of Banco Rio de la Plata, which it
doesn't already own, an SCH spokesperson revealed in an AFX
report.

The transaction, which involves the swap of 30.24 million SCH
shares, or 0.65 percent of its capital, for the additional shares
in its Argentine unit, is reportedly valued at approximately 275
million euros ($245 million). However, the deal and its final
price will not be settled until Monday. SCH is not issuing new
shares for the operation.

The news comes amid speculation from some analysts that Spain's
biggest bank could abandon its investments in Argentina,
currently accounting for about five percent of total assets.

But according to a source familiar with the deal, the deal should
be understood simply in the context of a commitment SCH had made
with the original owners of Banco Rio rather than an indication
of its wider plans.

CONTACTS:  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 -
           Second Deputy Chairman, OR
           Matias Rodriguez Inciarte - Deputy Chairman, OR
           Angel Corcostegui Guraya - Deputy Chairman & Chief
           Executive

           SCH Address:
           Paseo De Pereda, Numeros 9 AL 12
           Santander, Spain
           Phone   +34 94 2206100
           http://www.santandercentralhispano.es/

           BANCO RIO
           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

           BANCO RIO LEGAL ADVISOR:
           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


BLADEX: Fitch Downgrades Foreign Currency Ratings
-------------------------------------------------
International rating agency, Fitch, downgraded the long and
short-term foreign currency ratings of Banco Latinoamericano de
Exportaciones (Bladex) (NYSE: BLX) to 'BBB' and 'F3' from 'BBB+'
and 'F2', respectively. A Rating Watch Negative was placed on the
long-term rating. The Individual rating has been downgraded to
'C' from 'B/C' and placed on Rating Watch Negative.

The bank's support rating is affirmed at '4'. The downgrade is
the result of high credit exposure to companies operating in
Argentina, currently facing severe systemic challenges, including
deep economic and political turmoil. These elements may likely
result in payment defaults, delays or in Bladex's need to
refinance outstanding credits.

Traditionally a trade lender, Bladex's exposure has grown to
include a greater proportion of working capital lending and
direct lending to non-bank borrowers, both of which have proven
in the past to be more vulnerable to payment disruptions compared
to trade finance. As of 9/30/01, Bladex's total exposure to
Argentina stood at US$1.35 billion, representing 1.9x equity and
was broken down as follows: state-owned banks (30%), branches and
subsidiaries of foreign-owned banks (26%), subsidiaries of
foreign-owned corporations (19%), domestic corporations (13%) and
domestic banks (12%). Although impaired loans were low at 0.25%
of loans, Fitch views US$139 million in loan loss reserves as
inadequate for a balance sheet with 20% of its credits
concentrated in this 'DDD'-rated country. While trade finance
credits may receive preferential treatment, Bladex's non-trade
lending accounts for half of Argentine credits and may
deteriorate, especially if current exchange controls continue in
place for some time, as we expect.

Bladex has been proactive in managing its Argentine position,
reducing its estimated exposure by one-third from its peak
slightly over US$1.5 billion and liquidity reserves have reached
US$620 million in cash. Policies implemented under Duhalde,
including the devaluation of the Peso, will burden the banking
system and corporate borrowers. While all Argentine borrowers are
under severe pressure, Fitch views with greater concern Bladex's
exposure to the telecom and utility sectors, which account for
roughly 15% of total Argentine exposure, as they hold large USD-
denominated debt, while revenues are generated in Pesos. In
addition, expected measures by the government to cap fees will
further reduce these sectors' U.S. dollar cash flow and therefore
corporations' ability to service foreign currency debt. Adding to
the adverse scenario and direct effects on Bladex's borrowers,
are other government policies, which are disagreeable to foreign
shareholders and may result in shareholders' reconsideration,
bank and corporate alike, of their commitment to Argentina and
their subsidiaries operating in that country.

Considering that the banking system resumed operations late last
week and that one-third of Bladex's loan maturities are in the
medium turn, the full impact of the deterioration in the
Argentine portfolio may not be felt for some time. The assigned
Rating Watch Negative reflect the possibility of additional
rating adjustments as events unfold.

About Bladex

A multinational bank, Banco Latinoamericano (BLADEX) specializes
in financing foreign trade for Latin American and Caribbean
countries. Based in Panama City, BLADEX's core business is short-
term finance for its 270 clients, primarily other banks, in
nearly 25 countries, including Brazil and Mexico. BLADEX's main
source of funds is interbank deposits, placements in
international markets, and short-term borrowings from other
international banks. The bank also offers trade financing to
select private corporations. Its client banks make loans to
government institutions involved in foreign trade. BLADEX offers
no retail services.

CONTACT:  Fitch, New York
          Ricardo Chaves, 212/908-0606
          Linda Hammel, 212/908-0303
          or Peter Shaw, 212/908-0553

          BLADEX (Panama)
          Christopher Hesketh, SVP Treasury
          Jos‚ Casta€eda, Chief Executive Officer
          Sebastiao Toledo Cunha, Chairman of the Board

          Their Address:
          Calle 50 and Aquilino de la Guardia
          P.O. Box 6-1497, El Dorado Panama,
          Republic of Panama
          Telephone: (507) 210-8500
          Telefax: (507) 269-6333
          Telex: 2356 SWIFT BLAEPAPA
          website: http://www.blx.com/

          BLADEX (Argentine Representative Office)
          Julio Drot de Gourville

          Address:
          Ave. Corrientes 617, 9§ Piso
          Cądigo Postal 1043
          Buenos Aires, Argentina
          Telephone: (54-11) 43263584
          (54-11) 43939986
          Fax: (54-11) 43263579
          E-mail: jdegourville@blx.com


HSBC BANK: Moody's Reduces BFSR To Lowest Level
-----------------------------------------------
Moody's Investors Service downgraded the bank financial strength
rating (BFSR) of HSBC Bank Argentina, S.A. to E, from E+. The
rating outlook is stable. The E rating is the lowest level of
BFSR assigned by Moody's to banks worldwide.

The BFSR is Moody's opinion of a bank's stand-alone
creditworthiness, and measures the likelihood that a bank will
require financial assistance from third parties.

The downgrade reflects Moody's view that the devaluation of the
Argentine peso, coupled with foreign exchange and deposit
controls, increases the potential for extremely high credit
losses for all banks in the system, and raises the question of
the availability of full shareholder support to cover those
losses.

Moody's noted that this precludes any differentiation among the
banks, whether locally or foreign owned, public sector or
private, in terms of financial strength or franchise value. All
the rated private and public sector Argentine banks are therefore
now rated equally.

CONTACTS:  MOODY'S INVESTORS SERVICE (New York)
           Gregory W. Bauer, Managing Director
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           Jeanne Del Casino, Vice President - Senior Analyst
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653


HSBC BANK: Firms Cut Forecast On Parent Amid Argentine Crisis
-------------------------------------------------------------
Analysts revealed that major investment houses are slashing their
forecasts for HSBC Holdings as the crisis in Argentina could cost
the banking giant as much as $2 billion, the Associated Press
reports.

Last August, HSBC, one of the largest foreign banks in Argentina,
said its total exposure to the country was $4.9 billion and it
had made provisions of $338 million.

But more recently the Argentine central bank said HSBC had $5.7
billion invested in the country.

Morgan Stanley Dean Witter predicted HSBC Holdings was likely to
see earnings modestly down by 5 percent in 2002, compared with
2001. Morgan Stanley expected HSBC to record $7.14 billion cash
earnings excluding exceptional items for 2002, compared with
$7.46 billion for 2001.

Argentine bad debts (and fixed assets) could be more costly than
first thought, according to Morgan Stanley. The firm is now
looking for bad-debt forecasts of 43 basis points in the second
half of 2001 and 55 basis points in 2002, up from 29 basis points
recorded in the first half of 2001.

However, Tony Lau of Kim Eng Securities is expecting a much more
"moderate" $460 million loan loss from the group's Argentine
assets, based on the assumption of 20 percent trading securities
of the total $1 billion being marked to the market and 24 percent
of US$2.5 billion non-performing customer loans and advances
being written off.

According to Lau, total loan losses for the group were estimated
at $1.46 billion in fiscal 2001 and $1.9 billion in 2002.

Salomon Smith Barney also cut its 2001 and 2002 earnings per
share estimates by 3 percent to $5.23 and 4 percent to $4.84
respectively. The US brokerage house said operationally, the US
slowdown had affected the group's businesses globally, initially
in Asia but more recently in Latin America and Europe.


REPSOL YPF/YPF: Fitch Downgrades Ratings On Regional Uncertainty
----------------------------------------------------------------
Fitch, has revised ratings of Spain's Repsol YPF, one of the
world's eight largest integrated petroleum companies in terms of
proved reserves, production and refining capacity. The ratings
were removed from Watch Negative, with the Senior Unsecured debt
rating being lowered to 'BBB+' from 'A' and the Short-term rating
downgraded to 'F2' from 'F1'. The rating of the Preference Share
issues made by Repsol International Capital BV has been lowered
to 'BBB-' from 'A-'. The Rating Outlook is Negative. In a related
action, Fitch downgraded YPF S.A.'s Senior Unsecured Foreign and
Local Currency ratings to 'BB' from 'BBB-'. YPF's ratings remain
on Rating Watch Negative.

While the situation in Argentina is one that remains
characterised by a high degree of flux, a clear deterioration of
the near- to medium-term prospects of the group is beyond doubt.
The downgrades are the result of intensifying uncertainty with
regards to the economic and financial crisis in Argentina and its
potential impact on the group's overall credit quality given its
sizeable exposure to the country. In particular, the actions
reflect Fitch's concern about the stance that the new government
appears to be taking on the energy sector, which is likely to end
up carrying a material portion of the burden of the economic
reform programme. In addition to a devaluation of the Argentine
peso, the government is still negotiating a number of additional
measures, which may negatively affect the performance of the
group's upstream and downstream operations.

The rating actions also capture Fitch's ongoing concern about the
recent implementation of a government decree that imposes
controls on the external transfer of funds. Repsol YPF's net debt
level remains high, despite a recently completed EUR2bn
preference share issue, and the agency sees potential future
limitations on the transfer of funds from Argentina as
potentially negative to the credit quality of the group. It is
also likely that at least some of the significant cash balances
within YPF will have been affected by the recently introduced
deposit controls in Argentina. Fitch's prior ratings had
incorporated expectations of continued gradual improvement in the
leverage position, improvements that are almost certain to be
arrested in the short-term.

Following the acquisition by Repsol of Argentina's YPF, the
contribution of Argentine assets to operating income increased to
c.45% at YE00. Fitch's view of the sovereign risks had captured
the fact that oil is traded in global US dollar-denominated
commodity markets, limiting the impact of regional economic
downturns on upstream results. Going forward, however, this
positive factor may to some extent be offset by potential
payments to the government - while these may be theoretically
tied to upstream production, the government will in all
likelihood 'work backwards' from a target sum, currently expected
to fall somewhere between US$1bn and US$1.7bn for the industry.
Fitch expects that the increasingly difficult macro-economic
climate will limit demand growth and volumes going forward, in
spite of potential government induced tariff measures. Both the
direct targeting of the oil sector and the potential severity of
the current devaluation have now surpassed the sovereign risk
parameters within Fitch's original rating assessments of the
group.

Ratings at this level are supported by the group's continued
dominant market positions in Spain, where it refines close to 60%
of all crude processed. It maintains a 45% share of the retail
market, distributes nearly all the liquid petroleum gas consumed,
and, is by far the leader in natural gas distribution and
acquisition. In addition, notwithstanding the current crisis, the
group is expected to retain a strong presence in Latin America,
where its 40% share of the Argentine retail market and a strong
position in natural gas distribution and sales is expected to
retain significant value following the current crisis.

Repsol YPF's Negative Outlook reflects uncertainty with regards
to the group's ability to efficiently implement its strategy in
the unstable Argentine operating environment, and the maturity
profile of current debt obligations. The company faces EUR4.86bn
of maturities in FY02 (EUR2bn of which relates to Gas Natural,
which is responsible for its own debt servicing), a level
significantly above the organic cash flow levels forecast prior
to the current crisis. Repsol-YPF maintains EUR4.3bn of committed
facilities, and Fitch anticipates that Repsol's bank group will
remain supportive. Liquidity will nonetheless be the central area
upon which Fitch will focus in its ongoing surveillance. As the
clarity of Argentine governmental measures improves, the agency's
surveillance will focus on the key issues of taxation,
transferability restrictions, volume shrinkage and price re-
opening clauses with downstream gas clients, together with the
scope and uniformity of peso devaluation.

Continuation of the Rating Watch Negative on YPF reflects the
company's direct exposure to the proposed government measures,
concerns regarding its ongoing ability to convert and transfer
its significant cash flow generation ability and uncertainties
associated with the absence of defined macroeconomic and sector-
specific policy recommendations from federal authorities.

Fitch has also today issued a brief commentary on the exposure of
other European corporations to the Argentine crisis, titled
'Reeling after the Tango?', available from the agency's web-site,
www.fitchratings.com, or Susan Meshkati on +44 20 7417 4353.

CONTACTS:  Fitch Barcelona
           Erwin van Lumich
           Thomas Saul
           Tel: +34 93 323 8400

           Fitch London
           Richard Hunter
           Tel: +44 207 471 4362

           Fitch New York
           Alejandro Bertuol
           Tel: +1 212 908 0393

           Fitch Buenos Aires
           Anabella Colombo
           Tel: +54 11 4327 2444

           REPSOL YPF/YPF
           Alfonso Cortina De Alcocer, Chairman & CEO
           Ramon Blanco Balin, Vice Chairman
           Carmelo De Las Morenas Lopez, CFO

           Their Address:
           Paseo de la Castellana 278
           28046 Madrid, Spain
           Phone   +34 91 348 81 00
           Home Page: http://www.repsol.com

           or
           Av. Roque S enz Pe€a, 777.
           C.P 1364. Buenos Aires
           Argentina


SCOTIABANK QUILMES: BFSR Lowered To Lowest Level by Moody's
-----------------------------------------------------------
Moody's Investors Service downgraded the bank financial strength
rating (BFSR) of Scotiabank Quilmes, S.A. to E, from E+. The
rating outlook is stable. The E rating is the lowest level of
BFSR assigned by Moody's to banks worldwide.

The BFSR is Moody's opinion of a bank's stand-alone
creditworthiness, and measures the likelihood that a bank will
require financial assistance from third parties.

The downgrade reflects Moody's view that the devaluation of the
Argentine peso, coupled with foreign exchange and deposit
controls, increases the potential for extremely high credit
losses for all banks in the system, and raises the question of
the availability of full shareholder support to cover those
losses.

Moody's noted that this precludes any differentiation among the
banks, whether locally or foreign owned, public sector or
private, in terms of financial strength or franchise value. All
the rated private and public sector Argentine banks are therefore
now rated equally.

CONTACTS:  MOODY'S INVESTORS SERVICE (New York)
           Gregory W. Bauer, Managing Director
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           Jeanne Del Casino, Vice President - Senior Analyst
           Financial Institutions Group
           JOURNALISTS: 212-553-0376
           SUBSCRIBERS: 212-553-1653

           SCOTIABANK
           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
           E-mail: scotiarep@sinectis.com.ar

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

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

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



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

CVRD: Brazil, BNDES To Sell 31.5% Common Stake 1Q02
---------------------------------------------------
Brazil and its development bank, Banco Nacional de
Desenvolvimento Economico e Social (BNDES), will try to sell
their 31.5 percent common stake in Companhia Vale do Rio Doce
(CVRD) in the first quarter of this year, reports Bloomberg.

According to the report, Merrill Lynch & Co. and N. M. Rothschild
& Sons Ltd. have been hired to manage the offer in foreign
markets and Banco Bradesco SA to manage the sale in the domestic
market.

Brazil and BNDES are hoping to raise between $1.6 billion and
$1.8 billion from the sale of the stake. Reports have it that
Brazilians will be able to use their government-managed severance
fund to buy CVRD shares.

Brazil had hoped to sell half its stake in CVRD last year, but
then it decided to delay its plans on concern the Sept. 11
terrorist attacks in the U.S. would hurt investor interest in
emerging market holdings, reducing revenue from the transaction.

CONTACTS:  Roberto Castello Branco
           castello@cvrd.com.br
           +55-21-3814-4540

           Andreia Reis
           andreis@cvrd.com.br
           +55-21-3814-4643

           Barbara Geluda
           geluda@cvrd.com.br
           +55-21-3814-4557

           Daniela Tinoco
           daniela@cvrd.com.br
           +55-21-3814-4946



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

ABC-NACO: Sale to TCF Railco Excludes Dormant Mexican Subsidiary
----------------------------------------------------------------
ABC-NACO Inc. announced that the sale of substantially all of its
assets to TCF Railco Acquisition LLC ("TCF") has been completed.
A hearing was held in the U.S. Bankruptcy Court in the Northern
District of Illinois on January 11, 2002 at which time the terms
of the final purchase agreement were approved.

The assets sold included substantially all of ABC-NACO's U.S.
operating assets and the stock of the operations in Europe and
China. The Company's Rail Products subsidiaries in Canada and
Mexico were not part of the sale. The Canadian subsidiary,
Dominion Castings Limited, is currently in receivership and the
Mexican operation in Sahagun, Hidalgo, Mexico has ceased
operations. It is not expected that the Company will realize any
of its investment in these two operations. As a result, ABC-NACO
will be left with very minimal assets.

As announced, on October 18, 2001, ABC-NACO and its U.S.
subsidiaries voluntarily filed for reorganization under Chapter
11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
the Northern District of Illinois. The Company's liabilities in
this filing were approximately $310 million of which in excess of
$150 million was secured by substantially all of the Company's
assets under the indebtedness to the U.S. senior secured bank
group. The sales proceeds, which are approximately $65 million
(subject to certain adjustments and assumption of certain
liabilities), from the sale of the assets to TCF will be used to
satisfy the indebtedness to the senior secured bank group
including its debtor in possession loans advanced after the
bankruptcy filing. Since the sales proceeds will be substantially
less than the amount owed to the senior secured bank group,
proceeds for the settlement of claims of unsecured creditors, if
any, will be minimal and there will be no proceeds available for
recovery by shareholders.

TCF is owned by Three Cities Funds III, L.P. and affiliates
(together the "Three Cities Funds"). The Three Cities Funds are
primarily engaged in making control investments in medium-sized
companies, where its investment can lead to a meaningful,
positive influence on the future direction of the enterprise.
Effective following the closing of this transaction, the
operations purchased by TCF will operate under the name of
Meridian Rail.

CONTACT:  ABC-NACO Inc., Lombard
          Wayne R. Rockenbach, 630/792-2010
          Or

          Vaughn Makary, President, CEO, and Director
          Daniel Duval, Chairman

          Their Address:
          ABC-NACO Inc. / MeridianRail Corp.
          335 Eisenhower Ln. South
          Lombard, IL 60148
          Phone: 630-792-2010
          Fax: 630-852-2264
          URL: http://www.abc-naco.com


ALFA: Shares Climb On Fitch's Mexico Credit Rating Upgrade
----------------------------------------------------------
Shares of steel and petrochemical maker Alfa rose 6.3 percent to
11.89 pesos after Fitch increased Mexico's credit rating to
investment grade, according to a report released by Bloomberg.

The Company is in talks with creditors over the debts of Hylsamex
SA, its steel subsidiary, in a bid to avert a default. The
upgrade from Fitch may help it get more favorable terms as the
risk perception of Mexico eases.

Fitch now rates the Mexican government's debt ``BBB-,'' its
lowest investment grade rating, and up from ``BB+.'' Moody's
Investors Service gave Mexico an investment-grade rating in March
2000, while Standard & Poor's rates Mexico one notch below
investment grade.

The upgrade by Fitch was prompted by the government's ability to
lower its debt burden and keep its budget deficit from widening.


BANCRECER: Banorte To Begin 12-Month Integration Program
--------------------------------------------------------
Grupo Financiero Banorte's program to integrate recently acquired
Bancrecer begins this month, according to a report by Mexico City
daily el Economista. The program reportedly is divided into four
stages, one in each quarter, until the Bancrecer brand disappears
at the end of the year.

Banorte will complete legal and product goals within the first
six months, and then in the third quarter concentrate on the more
complicated task of technology integration.

Although part of Bancrecer's attractiveness was its modern and
robust Altamira platform, both banks could end up using Banorte's
Sistematix platform.

Consultants have been hired to decide which of the two platforms
will be the most convenient and least expensive for the two banks
to use.

The last step in the fusion of the two banks will be the
incorporation of Bancrecer's 754 branches and almost 1 thousand
automatic tellers.

Banorte's integration of Bancrecer's operations will be like "the
graduation of Banorte, having risen by several levels since its
privatization 10 years ago when it was a regional bank in
northern Mexico," said Banorte CEO Othon Ruiz Montemayor.

Banorte will be the third largest bank in Mexico, with a credit
portfolio equal to US$5.8 billion, or fourth largest based on
deposits, where the bank has 13-percent market share.


BUFETE INDUSTRIAL: Creditors May Seek Bankruptcy Action Soon
------------------------------------------------------------
Creditors of the embattled Mexican construction company Bufete
Industrial are now losing patience and may have to seek the
Company's bankruptcy soon, reports Mexico City daily Reforma.

Sergio Bolanos still has not injected the much-needed financing
that he agreed to put into Bufete.

A group of workers have already expressed interest in taking
control of the Company's assets in order to recover some of
millions of pesos owed in wages and severance of laid off
workers.

Meanwhile, on January 15, a US$30 million payment to Bancomext,
headed by Luis Romero Hicks, became due.



MEXICANA: Airbus 319 Replaces Boeing 727 To Reduce Fuel Costs
-------------------------------------------------------------
Mexicana de Aviacion, owned by airline holding company Cintra,
recently substituted two Boeing 727s for two Airbus A319s. The
switch is viewed as part of a program launched at the beginning
of last year to reduce costs, says Mexico City daily Reforma.

"The company's goal is to substitute all of the 727s for newer-
generation airplanes by 2003. With the two Airbuses, there are
still close to another 20 727s to replace," said Mexicana CEO
Fernando Flores.

The new airplanes use approximately 40-percent less fuel than the
Boeing models and are designed to fly with two turbine engines
and two pilots.

Some 20 Boeing airplanes still have to be swaped out. Flores says
that the changes won't involve big expenditures for Mexicana,
because the Company acquires its airplanes under lease.

CONTACT:  Jennifer L. Jenks
          Marketing Manager of Mexicana Airlines, U.S.A.
          Tel. +1 210-491-9764,
          Email: jennyjenks@mexicana.com


PULSAR INTERNATIONAL: Restructuring Delay Has Creditors Uneasy
--------------------------------------------------------------
Sources close to the negotiation say that Pulsar International is
still in the process of reaching an agreement to restructure its
debt, reports Mexico City daily Reforma.

According to the unnamed sources, each creditor bank may
authorize an agreement this week involving $400 million and the
sale of some of the Company's assets.

However, Pulsar's debt holders are now getting nervous or even
skeptical due to the continued delay in the process.

Pulsar International is a US$2.8 billion holding company based in
Monterrey, specializing in biotechnology, financial services,
construction, information technology and distribution. Pulsar's
subsidiaries include Seminis, Seguros Comercial Americana and
Cartones Ponderosa.


STARMEDIA NETWORKS: Milberg Weiss Reiterates Filing Deadline
------------------------------------------------------------
The law firm of Milberg Weiss Bershad Hynes & Lerach LLP
announces that a class action lawsuit was filed on November 20,
2001, on behalf of purchasers of the securities of StarMedia
Network Inc. ("StarMedia" or the "Company") (Nasdaq: STRM)
between April 11, 2000 and November 19, 2001, inclusive (the
"Class Period'). A copy of the complaint filed in this action is
available from the Court, or can be viewed on Milberg Weiss'
website at: http://www.milberg.com/starmedianetwork/

The action is pending in the United States District Court for the
Southern District of New York, located 500 Pearl Street, New
York, NY 10007, against defendants StarMedia, Fernando J.
Espuelas (CEO and Chairman) and Steven J. Heller (Chief Financial
Officer).

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
subsidiary, 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 bought the securities of StarMedia between April 11, 2000,
and November 19, 2001, you may, no later than January 21, 2002,
request that the Court appoint you as lead plaintiff. A lead
plaintiff is a representative party that acts on behalf of other
class members in directing the litigation. In order to be
appointed lead plaintiff, the Court must determine that the class
member's claim is typical of the claims of other class members,
and that the class member will adequately represent the class.
Under certain circumstances, one or more class members may
together serve as "lead plaintiff." Your ability to share in any
recovery is not, however, affected by the decision whether or not
to serve as a lead plaintiff. You may retain Milberg Weiss
Bershad Hynes & Lerach LLP, or other counsel of your choice, to
serve as your counsel in this action.

Milberg Weiss Bershad Hynes & Lerach LLP (
http://www.milberg.com)is a 190-lawyer firm with offices in New
York City, San Diego, San Francisco, Los Angeles, Boca Raton,
Seattle and Philadelphia, and is active in major litigations
pending in federal and state courts throughout the United States.
Milberg Weiss has taken a leading role in many important actions
on behalf of defrauded investors, consumers, and others, and has
been responsible for more than $20 billion in aggregate
recoveries. Please contact the Milberg Weiss website for more
information about the firm. If you wish to discuss this action
with us, or have any questions concerning this notice or your
rights and interests with regard to the case, please contact the
following attorneys:

          Steven G. Schulman or Samuel H. Rudman
          One Pennsylvania Plaza, 49th fl.
          New York, NY, 10119-0165

          Phone number: (800) 320-5081
          Email: starmedianetworkcase@milbergNY.com
          Website:  http://www.milberg.com


=======
P E R U
=======

SIMSA: Shareholders Disagree Over Problems, Solutions, Future
-------------------------------------------------------------
In a recent meeting, shareholders of the financially-strapped
Peruvian lead-zinc miner San Ignacio de Morococha (Simsa) voted
to seek bankruptcy protection in order to restructure the
Company's debt, reports Business News Americas.

Simsa CFO Jorge Best admitted that cost reductions had failed to
counter low zinc and lead prices, which "disrupteded" cash flows
and meant constant reprogramming of payments to suppliers and
financial institutions.

Legal action by some creditors only complicated things for Simsa,
as dealing with them took human resources and finances away from
returning production to previous levels, Best said. He added that
the Company was sure it could return to normality in the near
future.

Victor Ostolaza, representative of shareholder Galloway
Investments, pointed out mine production was low because of a
lack of basic materials due to insufficient working capital.
Though he recognized management's "huge effort" in reducing
costs, the Company's biggest problem was low output, he said.

Ostolaza supported bankruptcy protection because it would enable
Simsa to continue operating and give greater security of payment
to the workers and unsecured suppliers.

However, Phoenix-based Phelps Dodge, the world's number two
copper miner, which owns 40 percent of the Peruvian company,
suggested that Simsa should declare itself insolvent.

According to Phelps representative, and chairman of the
shareholders' meeting, Luis Carlos Rodrigo Prado, as zinc prices
were "catastrophic" and mine production low, the Company was
unviable and could not meet debts it had with workers and
creditors.

CONTACTS:  Jesus Arias Davila, Chairman
           Miguel Montestruque Zegarra, General Manager
           Felipe Guzman Haimberger, Manager

           Their Address:
           Compania Minera San Ignacio de Morococha SA (SIMSA)
           Calle Uno 795 Urbanizacion Corpac
           San Isidro Lima, Peru
           Phone   +51 1 224 3432
           URL: simsa.com.pe



               ***********


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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