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       T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Tuesday, January 22, 2002, Vol. 3, Issue 15

                           Headlines

A R G E N T I N A

BANCO BANSUD: Moody's Warns Of Possible Collapse
BANCO DE LA CIUDAD: Moody's Predicts Insolvency
BANCO DE GALICIA: May Be Upside Down Like The Rest Says Moody's
BANCO HIPOTECARIO: Conditions Deteriorate; Insolvency Looms
BANCO NACION: Largest Bank Not Immune to Insolvency Crisis

BANCO DE LA PROVINCIA: Recession Could Be Fatal, Warns Moody's
BBVA BANCO FRANCES: Moody's Predicts Impending Insolvency
HSBC ARGENTINA: On Moody's List of Banks Bound for Collapse
SCOTIABANK QUILMES: Moody's Warns Of Insolvency
* MOODY'S REPORT: Argentine Banks Heading for Disaster

ENRON: Brazilian Firm Expresses Interest In Argentine Stake
HSBC BANK: Shares Head Lower As Authorities Raid, Investigate
REPSOL YPF: Argentine Acquisition Yields Negative Effects


B R A Z I L

BAMERINDUS: Disgruntled Shareholders Still Investigating Sale
TRANSBRASIL: Flights To Resume in Two Weeks Says DAC


M E X I C O

GRUPO DINA: Remains Optimistic Despite Financial Difficulties
GRUPO MEXICO: Shares Up On Rumors Of Possible Debt Agreement
MINERA AUTLAN: Nears Debt-Restructuring With Creditors


P E R U

SIMSA: Operations Likely To Become Profitable Again


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

BANCO BANSUD: Moody's Warns Of Possible Collapse
------------------------------------------------
Moody's Investors Service predicted in its latest report that
Banco Bansud S.A. could become insolvent. Moody's cites
Argentina's lack of a coherent monetary and banking policy
framework coupled with paralysis in the local financial markets
as the basis of its projection.

Mexico's Banamex bank, a unit of U.S.-based Citigroup Inc., early
this month said it sold its majority stake in Banco Bansud due to
overlapping problems with Citigroup's operations in Argentina.
Bansud, which had 72 branches, 1,500 employees and assets of just
over ARS1billion, was sold to Banco Macro for around US$65
million.


BANCO DE LA CIUDAD: Moody's Predicts Insolvency
-----------------------------------------------
Moody's Investors Service included Banco de la Ciudad de Buenos
Aires in its list of Argentine banks that are facing insolvency.
In its latest report on numerous banks in the region, the rating
service detailed Argentina's lack of a coherent monetary and
banking policy framework coupled with paralysis in the local
financial markets as the basis of its projection.

In late December, Moody's lowered long-term foreign currency
deposits of Banco de la Ciudad to Ca from Caa3 due to the rapidly
deteriorating economic, financial and social conditions in
Argentina.


BANCO DE GALICIA: May Be Upside Down Like The Rest Says Moody's
---------------------------------------------------------------
Banco De Galicia Y Buenos Aires, S.A. is one of the Argentine
banks that are likely to face insolvency, Moody's Investors
Service said in its latest report.

Moody's recently lowered the bank financial strength rating
(BFSR) of Banco de Galicia y Buenos Aires, S.A. to E, from E+,
with a stable rating outlook.

The downgrade reflected 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 the bank, and raises the question of the availability
of full shareholder support to cover those losses.


BANCO HIPOTECARIO: Conditions Deteriorate; Insolvency Looms
-----------------------------------------------------------
Moody's Investors Service, in a recently released report,
included Banco Hipotecario in its list of the Argentine banks
that are facing insolvency.

Moody's recently downgraded the bank financial strength rating
(BFSR) of Banco Hipotecario to E, from E+, with a stable rating
outlook. 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.


BANCO NACION: Largest Bank Not Immune to Insolvency Crisis
----------------------------------------------------------
Banco de la Nacion Argentina, the country's largest bank, could
become insolvent, according to a latest report released by
Moody's Investors Service.

Banco de la Nacion Argentina had its long-term foreign currency
deposits downgraded by Moody's Investors Service last month to
`Ca' from `Caa3' due to deteriorating economic, financial and
social conditions in the country.


BANCO DE LA PROVINCIA: Recession Could Be Fatal, Warns Moody's
--------------------------------------------------------------
Banco de la Provincia de Buenos Aires is one of the Argentine
banks that Moody's predicted would face insolvency. Moody's
points to Argentina's lack of a coherent monetary and banking
policy framework coupled with paralysis in the local financial
markets as the current support of its prediction.

In December, Moody's lowered the Argentine bank's long-term
foreign currency deposits to Ca from Caa3 due to the rapidly
deteriorating economic, financial and social conditions in the
country.


BBVA BANCO FRANCES: Moody's Predicts Impending Insolvency
---------------------------------------------------------
Banco Frances, owned by Spain's Banco Bilbao Vizcaya Argentaria,
is likely to collapse in the near-term, according to the latest
report released by Moody's Investors Service.

Last week, Argentine police searched the offices of the bank as
part of an investigation into the transfer of deposits out of the
country.

Court documents revealed that at least two Argentine judges are
investigating allegations that banks in the country "subverted
the economy" by allowing depositors to transfer billions of
dollars overseas.


HSBC ARGENTINA: On Moody's List of Banks Bound for Collapse
-----------------------------------------------------------
Moody's Investors Service, in its latest report, included HSBC
Argentina in its list of Argentine banks likely to collapse in
the near term.

Several analysts have predicted that HSBC Holdings Plc, Europe's
largest bank by market value, is likely to write down as much as
$1 billion for bad loans last year from Argentina.


SCOTIABANK QUILMES: Moody's Warns Of Insolvency
-----------------------------------------------
In its latest report, Moody's Investors Service revealed
Scotiabank Quilmes is facing insolvency. Argentina's lack of a
coherent monetary and banking policy framework coupled with
paralysis in the local financial markets are the latest troubles
prompting the warning.

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




* MOODY'S REPORT: Argentine Banks Heading for Disaster
------------------------------------------------------

Moody's Investors Service says that Argentina's recent currency
devaluation and financial turmoil have driven the country's banks
to insolvency.

Moody's says that Argentine banks are insolvent even under a
benign scenario in part as a result of the asset-liability
mismatch created by the devaluation of banking assets,
unaccompanied by the redenomination of dollar liabilities.

Moody's notes: "At a minimum, a general write-down of dollar-
denominated obligations, including deposits, throughout the
Argentine financial system is required to fundamentally rebalance
the economy. Popular opposition to a write-down of deposits is
quite strong, however. The reluctance to recognize these deposit
losses is key to understanding the economic and monetary problems
presently facing the country. The price distortions created by
the present exchange rate regime are clearly exacerbating the
downturn in economic activity."

"The devaluation of the Argentine peso has also reduced the
repayment ability of debtors in foreign currency, " the agency
notes, "and presents the potential for extremely high credit
losses for the banks, resulting from an across-the-board
deterioration in asset quality. "

According to the agency, the cost to the Argentine financial
system will potentially represent a multiple of the system's
present capitalization levels unless liabilities are reduced via
redenomination; the system will therefore need considerable
external support to recapitalize.

"Right now, " the report concludes, "the asset side of the banks'
balance sheets is severely impaired, while the liability side
remains where it was before the crisis, resulting in severe
insolvency. The policy of forcing the banks to repay peso and
dollar deposits with dollars is unenforceable, since the banks
don't have the money, and neither does the government. "

"Therefore, the government's simplest option would seem to be to
1) declare the banks insolvent, 2) nationalize them, 3) convert
deposits into devalued pesos or into government bonds, 4)
recapitalize the banks with peso bonds, and 5) auction them off."

CONTACTS:  MOODY'S (New York)
           Jeanne Del Casino
           Vice President - Senior Analyst

           Gregory W. Bauer
           Managing Director


ENRON: Brazilian Firm Expresses Interest In Argentine Stake
-----------------------------------------------------------
Petrobras, Brazil's federal energy company, is looking to buy
U.S.-based Enron's stake in Argentine natural gas transport
company Transportadora de Gas del Sur (TGS), says Business News
Americas.

Enron, which filed for bankruptcy protection in early December,
owns 50 percent of the Ciesa holding company, which in turn owns
70 percent of TGS stock. Argentina's Pecom Energia owns the other
50 percent of Ciesa.

Enron filed for bankruptcy protection last year in the largest
Chapter 11 case ever after Dynegy Inc. abandoned its $23 billion
takeover of the Houston-based energy trader.


HSBC BANK: Shares Head Lower As Authorities Raid, Investigate
-------------------------------------------------------------
Argentine police continue to search the Argentine office of HSBC
as part of an investigation into the transfer of money ahead of
the imposition of capital controls.

According to a report in The Independent (London), HSBC's share
price fell 2 percent Friday due to the raids. The bank's shares
on Friday closed down 18p, or 2.2 percent, at 773.5p.

An HSBC spokesman in London has confirmed its offices had been
visited and said it was collaborating fully with the authorities.

Exactly what the police were searching for remains unclear. So
far, the bank hasn't been formally charged. Analysts believe the
banking giant could face losses of up to GBP1.4 billion from the
monetary crisis in Argentina.

However, according to a report released by The Guardian, it was
not fears about potential losses in Argentina - which analysts
reckon could top $1bn - that undermined HSBC. Rather, it is the
speculation of a multi-billion pound acquisition that did the
damage.

Rumor has it that HSBC is considering making an offer for Dexia,
the Franco-Belgian bank listed on the Euronext exchange and
valued at EUR19 billion.

In the eyes of many, a disappointing 12 months has left Dexia,
Europe's largest lender to local governments, exposed to a bid.
Dexia's shares have gone nowhere over the past year and its chief
executive has admitted that is a cause for concern.


REPSOL YPF: Argentine Acquisition Yields Negative Effects
---------------------------------------------------------
Argentina's economic crisis and the government's threats to
impose new oil taxes are slowly pulling down the value of the
Spanish oil company Repsol YPF, says El Cronista.

Repsol, which bought Argentina's YPF in 1999 for US$15 billion,
has seen its shares slide another 3.33 percent on the Stock
Exchange in Madrid, closing at EUR13.65 in the last round.

With this latest drop added to the 15 percent spiral since the
beginning of this year, the market capitalization of Repsol YPF
reached US$14.715 billion, an amount US$453 million less than the
US$15.168 billion paid by Repsol to acquire 98.2 percent of YPF
in 1999. The downward market cap adjustment was mainly caused by
the fact that the group has most of its oil and gas reserves in
Argentina.

Meanwhile, the Argentinean Government is studying a new taxation
format for oil exports, which would be negative for oil companies
in the country. In addition, the devaluation of the Peso will
hinder Repsol YPF in its attempt to repay its US$18-billion debt,
mainly generated by the acquisition of YPF.



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

BAMERINDUS: Disgruntled Shareholders Still Investigating Sale
-------------------------------------------------------------
Minority shareholders of the former Bamerindus bank continue in
their efforts to find proof of their allegations that the bank
was undervalued in the sale, reports sabi.

The 42,500 shareholders recently gained access to documents they
believe will help analyze the intervention of the Banco Central
in Bamerindus before its sale. Shareholders have also alleged
that HSBC received privileged information from the Banco Central
before the sale.

The shareholders have already had success in annulling the
evaluation of 184 pieces of real estate belonging to Bamerindus
to HSBC. Their losses in this case are estimated at R$200
million.


TRANSBRASIL: Flights To Resume in Two Weeks Says DAC
----------------------------------------------------
Brazilian airline Transbrasil will recommence its activities by
February 1, according to the country's airlines regulator DAC
(Departamento de Aviacao Civil), in a report released by Jornal
do Brasil. Transbrasil, however, does not have adequate credits
for fuel and owes money for salaries and benefits to 1,200 of its
employees.

DAC gave Transbrasil until February 3 to present a comprehensive
plan. DAC wants to know exactly how the company will resume
operations and which routes it intends to operate. The plan is
also expected to provide information on the condition of its
aircraft. If Transbrasil fails to present the plan by then, it
will lose its operating license.

Transbrasil's R$ 1 billion in debt makes it one of airlines that
is most affected by the steep depreciation of the Brazilian real
against the dollar last year. The Company's already dire
financial condition was amplified by downturn in travel after the
September 11 attacks on the United States.



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

GRUPO DINA: Remains Optimistic Despite Financial Difficulties
-------------------------------------------------------------
Nearly-bankrupt Mexican truck maker, Dina, remains hopeful that
it will reach an agreement with bondholders and employees in
order to save its brand name, says the Company's legal head
Francisco Mendoza in a Mexico City daily el Economista report.

Additionally, the Company hopes to strike an accord with
creditors for them to accept Dina's share holdings in companies
like MCI in the United States and a few assets in Mexico.

Dina's recovery in whole form is impossible, as executives are
likely to continue selling off assets, although there's not much
left of the company to go around.


GRUPO MEXICO: Shares Up On Rumors Of Possible Debt Agreement
------------------------------------------------------------
Shares of Grupo Mexico SA, the world's third-largest copper
producer, climbed 91 centavos, or 7.5 percent, to 13.09 pesos,
reports Bloomberg.

"Copper prices have recovered slightly, there's a rumor that the
Company is near an agreement to restructure its debt and
creditors never invoked a covenant that would have forced the
Company to set aside its export revenue," said Marco Reyes, an
analyst with Scotiabank Inverlat SA in Mexico City.

Grupo Mexico's shares have risen 45 percent this year.

CONTACTS:  German Larrea Mota-Velasco, Chairman and CEO
           Avenida Baja California 200, Colonia Roma Sur
           06760 M,xico, D.F., Mexico
           Phone: +52-5-264-7775
           Fax: +52-5-264-7769

           C.P. Hector Garcia De Quevedo Topete, Corporate Dir.
           Av. Baja California No. 200, Colonia Roma Sur C.P.
           06760 MEXICO, D.F.
           Phone: 55-64-70 66 ext 7238
           Fax: 55-64-3714

           UNDERWRITER: ING BARRINGS
           Corporate communication and public relations:
           C.P. HECTOR GARCIA DE QUEVEDO TOPETE
           CORPORATE DIRECTOR
           AV. BAJA CALIFORNIA No. 200
           Colonia ROMA SUR C.P. 06760
           MEXICO, D.F.
           Tel: 55-64-70 66 ext 7238 Fax: 55-64-3714
           moram@gmexico.com.mx


MINERA AUTLAN: Nears Debt-Restructuring With Creditors
------------------------------------------------------
Grupo Ferrominero and its Autlan subsidiary continues to
negotiate with creditors despite the setbacks that the groups
have experienced in their attempts to reach an agreement to
restructure their debts.

According to a report released by Mexico City daily Reforma, an
agreement was nearly reached at the end of last year. However,
some of the bank creditors derailed a potential deal by being
unwilling to consider a long-term restructuring agreement. The
hold-out group would prefer to take their money at a discount and
get out, says Mexico City daily Reforma.

However, Ferrominero is likely to reach an agreement by the end
of the first quarter to restructure its US$82 million in debt, of
which US$70 million dollars is related to Autlan.



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P E R U
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SIMSA: Operations Likely To Become Profitable Again
---------------------------------------------------
Peruvian lead-zinc miner San Ignacio de Morococha (Simsa), which
recently filed for bankruptcy protection in order to restructure
its debt, can become profitable. With an investment of up to
US$3mnpy the company could be processing 700,000tpy of ore with
net positive results, says Jose Cervantes of the Lima business
daily Gestion.

In a detailed overview of the Company, Cervantes added that the
Company may also obtain the help of a strategic investor to
restore its financial health.

Quoting unnamed sources, Cervantes said Simsa's total debt is
US$18.3 million - US$9.71 million to suppliers, US$3.06 million
to banks, US$2.46 million to the workforce, US$460,000 to the
authorities and US$2.6 million to others.

But as US$2.3 million of the total could be considered connected
to working capital and met via cash flow, the net debt is US$16
million. Cervantes quoted the sources as saying the gross debt
could be paid off in ten years at 4 percent annual interest.

Simsa has suffered from US$14 million of losses in the last two
years, low zinc prices, rockfalls at its underground operations,
fatal accidents, legal disputes among shareholders and sub-
standard production.

But the company plans to raise output by 50 percent to 60,000tpm
of mineral treated by year-end from the current 40,000tpm.

Subsequently, it would look to sustain that higher rate and
become a 73,000tpy zinc producer generating US$25.1 million of
revenue and US$3.9 million net profit at US$937/t zinc, Cervantes
projected. Assuming US$1.2 million to US$3mnpy investments, free
cashflow would be between US$900,000 and US$2.7mn, he added.



               ***********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter Latin American is a daily newsletter
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and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Fe Ong Va¤o, Editors.

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

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