TCRLA_Public/020201.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

            Friday, February 1, 2002, Vol. 3, Issue 23



ARGENTINE BOND ISSUERS: Potential Defaults Hinge On Govt. Bill
ARGENTINE BANKS: Fitch Says BK Law Will Result In Defaults
ARGENTINE CORPORATIONS: Bankruptcy Bill Leaves Fate In CB's Hands
YPF/REPSOL: Fitch Says Oil, Gas Sector Suffers From Devaluation
TRANSENER: Operation Likely To Affect National Grid


GLOBAL CROSSING: Despite Demise, Officials Defend Vision


ELETROPAULO METROPOLITANA: S&P Lowers Ratings On Mounting Debt
ENRON: Yet To Sell Brazilian Assets To Pay Debt
TRANSBRASIL: Govt. Suspends Resumption Pending Clarifications


TELEFONICA CTC: Chile Denies Request To Boost Rates
TELEX CHILE: Shareholders Approve US$387MM Capital Boost


AEROMEXICO: Economic Woes Prompt 11% Drop In Fares
BITAL: Announces Increase In 4Q01 Net Earnings
MEXICAN AIRLINES: Looking To Quash Asur's Rate Increases


SIDOR: Initiates Labor Talks To Find Financial Balance

     - - - - - - - - - -


ARGENTINE BOND ISSUERS: Potential Defaults Hinge On Govt. Bill
International credit rating agency Moody's Investors Service
believes that the bill banning most external payments will put 26
Argentine bond issuers at risk of default, reports Business News

"The bill bans external transfers with the exception of export-
related transactions, effectively prohibiting firms from paying
debt obligations to foreigners," said Moody's sovereign risk unit
managing director Vincent Truglia and bond default research head
David Hamilton.

"However, the proposed law does allow exemptions. Some of these
firms may avoid default due to the capital controls if they are
allowed a discretionary exemption or if they can use offshore
earnings to meet foreign debt payments," they explained.

Among the issuers, which Moody's consider to be at risk, are the
companies from the oil & gas sector such as, Pecom Energia, YPF,
Transportadora de Gas del Sur, Camuzzi Gas Pampeana, Camuzzi Gas
del Sur, MetroGas and Pan American Energy.

CONTACTS:  Pecom Energia S.A. de Perez Companc S.A.
           Maipo 1 - Piso 22 - C1084ABA
           Buenos Aires, Argentina
           Phone: (54-11) 4344-6000
           Fax: (54-11) 4344-6315

           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:

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

           Gonzalo Castro Olivera, Investor Relations

           Maria Victoria Quade, Investor Relations
           Tel: (5411) 4865-9077

           Walter F. Schmale, Chairman
           Eduardo Ojea Quintana, Vice Chairman and CEO
           Claudio Schuster, CFO

           Their Address:
           Transportadora de Gas del Sur S.A. (TGS)
           Don Bosco 3672, 6th Fl.
           C1206ABD Buenos Aires, Argentina
           Phone: +54-11-4865-9050
           Fax: +54-11-4865-7154

           Alberto Alfredo Alvarez, President
           William Harvey Adamson, First VP
           Gen. Director Enrique Barruti, HR Director
           Fernando Aceiro New Bus. Director
           Luis Domenech Admin. and Fin. Director

           Their Address:
           G. Araoz de Lamadrid 1360
           1267 Buenos Aires, Argentina
           Phone: (800) 422-2066
           Fax: (201) 262-2541

ARGENTINE BANKS: Fitch Says BK Law Will Result In Defaults
Fitch Ratings believes that, should the proposed bankruptcy
legislation be signed into law, defaults and restructuring of
most companies' foreign currency debt would be the result in
Argentina. Furthermore, the new rules would formally close
external financing options for most corporates. The proposed
legislation prohibits the transfer of dollars abroad, except for
those entities holding multilateral-sponsored obligations and
corporates with US dollar export revenues.

The economic and financial viability of several Argentine
companies has already been compromised following the impact of
the prolonged recession, government debt default, currency
devaluation, restrictions on bank withdrawals and transferability
outside of Argentina and the implementation of the currency
transfer controls. In addition, the emergency measures published
by the government, which are still uncertain, further increase
the Argentine risk perception by international investors. These
circumstances have affected the normal development of both the
industrial and service sectors, essentially paralyzing the
national economy.

The ongoing restrictions to the transferability of foreign
currency has forced several companies into technical default,
although many of these companies still have the capacity to
service the scheduled interest and principal payments in a timely
manner. Fitch expects this situation to worsen if the bankruptcy
legislation is approved. While financial flexibility and credit
profile of Argentine companies has been deteriorating due to
differences between income in pesos and the exposure to debt-
denominated in dollars, the transferability law will accelerate
the defaults in the corporate sector.

Furthermore, Fitch believes that the sovereign's decision to
default, coupled with ensuing measures such as the proposed
bankruptcy law, may have reduced the stigma associated with such
an action and has facilitated a company's decision to opt for a
measure deemed unthinkable a few months ago. While most companies
will have no option but to default, those with export funds
and/or obligations with multilateral institutions may ultimately
be faced with a willingness decision.

Under the prevailing uncertainties, Fitch is monitoring the
international ratings assigned to Argentine corporates,
maintaining them all on Rating Watch Negative. The enactment of
the bankruptcy legislation would result in the immediate
downgrade of most, if not all, companies' foreign and local
currency debt ratings.

CONTACTS:  Daniel R. Kastholm, CFA 1-312-368-2070, Chicago
           Ana Paula Ares +54 11 4327-2444

           Dolores Teran +54 11 4327-2444, Buenos Aires.

           James Jockle 1-212-908-0547, New York.

ARGENTINE CORPORATIONS: Bankruptcy Bill Leaves Fate In CB's Hands
The fate of the Argentine corporations on the verge of huge debt
defaults is now in the hands of the Central Bank following
Congress' proposal Wednesday of a diluted bankruptcy bill. The
new law is opposed by the International Monetary Fund (IMF).

According to a report released by Reuters, while the Lower House
of Congress left out a clause banning transfers of funds abroad
that would have given many corporations no choice but to default
on debts, existing legislation means such transfers must still be
approved by the Central Bank.

The bankruptcy bill, which still requires President Eduardo
Duhalde's signature before becoming law, suspends creditor action
for 180 days and also gives banks 90 days to renegotiate debts
before having to write them off as a loss.

Foreign lawyers and experts alike have been critical of the
bankruptcy act, saying it strips creditors of their rights and
could deter foreign lending in the future. IMF chief Horst
Koehler had said the bill was a bad decision and should be

YPF/REPSOL: Fitch Says Oil, Gas Sector Suffers From Devaluation
The emergency measures announced by the Argentine government will
be detrimental to the financial flexibility and credit profiles
of companies operating in the nation's hydrocarbon industry,
according to a special report by Fitch Ratings, the international
rating agency.

'The risk of inflation, coupled with the unsettled restructuring
of public service tariffs, potential difficulties in accessing
foreign exchange, ongoing hard currency capital investment
requirements and vulnerability to additional political
intervention, may quickly erode the industry's competitiveness,'
said Alejandro Bertuol, Senior Director, Fitch. 'Additionally,
most of Argentina's energy companies have balance sheets loaded
with leverage denominated in foreign currencies, and the peso's
adjustment immediately increased corporate debt burdens and is
expected to pressure the free cash flow generation ability of
many of the segment's participants.'

According to the new report, 65-85% of the estimated operating
expenses of the leading local oil companies are denominated in
pesos. For some players, this structure offsets some of the
adverse effects of the devaluation. In the case of hydrocarbon
exporters such as YPF, for example, the predominance of local
currency-denominated expenses serves to boost near-term
competitiveness in U.S. dollar-terms. Devaluation-driven gains,
however, may not be sustainable over the medium-term.

As of year-end 2000, crude oil and derivative product exports
totaled US$2.8billion and US$1.4billion, respectively. Thus,
implementation of a proposed 25% tax on the aggregate US$4.3
billion total would only generate US$1.06 billion, a fraction of
the estimated fiscal requirements of the proposed financial
sector bailout.

'The financial viability and ramifications of such a scheme,
however, depend in part on the behavior of international crude
oil prices, the floating peso's rate of depreciation and domestic
aggregate demand,' said Bertuol. 'As with the upstream segment,
the uncertainty associated with Argentina's outlook will likely
foster an emphasis on expanding export markets for downstream
products and a review of planned investment programs.'

CONTACT:  Alejandro Bertuol 1-212-908-0393, New York

          James Jockle 1-212-908-0547, New York

TRANSENER: Operation Likely To Affect National Grid
National Grid is privately admitting its operation of Transener,
the largest power transmission company in Argentina, is likely to
be adversely affected by recent events, according to a report in
the Evening Standard.

"With the fluid economic situation in Argentina, we are obviously
continuing to monitor the situation closely," said an unnamed
National Grid spokesman in response to speculations that
Transener is suffering from power bills not being paid after the
collapse of the Argentine economy.

"We recognize that where there are currency controls in place,
there is always the possibility that payment defaults could
occur. The economic situation is not yet settled enough for us to
assess the financial impact on Transener," the spokesperson

National Grid is believed to have sunk at least GBP110 million
into Transener and holds the operating license for it through a
42.5 percent stake in Transener's majority shareholder

Transener recently had its ratings downgraded by Standard and
Poor's. The ratings affected were:

                              To                From

- Local currency issuer credit ratings

                          CCC-/Negative/--     CCC+/Negative/--

- Foreign currency issuer credit ratings

                          SD/NM/--              CC/Negative/--


NAME: Global Crossing Ltd.
      Wessex House
      45 Reid St
      Hamilton, HM 12

PHONE: +1 (441) 296-8600



       Gary Winnick, Founder & Chairman
       John Legere, CEO
       Dan Cohrs, CFO
       Joseph Perrone, Executive VP for Finance

INVESTOR RELATIONS:  Ken Simril, VP Of Investor Relations
                     Investor Hotline: (800)836-0342
                     Tel. (310)385-5200
                     Fax. (310)385-3720



TYPE OF BUSINESS: Founded March 1997, Global Crossing Ltd.
(NYSE:GX) provides telecommunications solutions over the world's
first integrated global IP-based network, which reaches 27
countries and more than 200 major cities around the globe. Global
Crossing serves many of the world's largest corporations,
providing a full range of managed data and voice products and
services. Global Crossing operates throughout the Americas and
Europe, and provides services in Asia through its subsidiary,
Asia Global Crossing (NYSE:AX).

SIC: Utilities & Telecommunications


TOTAL ASSETS:  $25,511 (in millions) 3 mos. ended Sep. 30, 2001

TOTAL LIABILITIES:  $14,639 (in millions) 3 mos. ended Sep. 30,

REVENUES: $793 (in millions) 3 mos. ended Sep. 30, 2001

PUBLIC SECURITIES: 909.7 million shares outstanding as of Sep.

AUDITOR: Andersen
         33 W. Monroe
         Chicago, IL 60603
         Tel: 1 312 580 0033
         Fax: 1 312 507 6748

CREDITOR: J.P. Morgan Chase & Co.

LEGAL ADVISORS: Gibson, Dunn & Crutcher LLP
                Los Angeles Office
                Gibson, Dunn & Crutcher LLP
                333 South Grand Avenue
                Los Angeles,  California
                Telephone: 213-229-7000
                Fax: 213-229-7520

                Simpson Thacher & Bartlett
                10 Universal City Plaza - Suite 1850
                Los Angeles, CA 91608
                Phone: 818-755-7000
                Fax: 818-755-7009

FINANCIAL ADVISORS:  Morgan Stanley Dean Witter
                     Morgan Stanley
                     1585 Broadway
                     New York, NY 10036
                     Telephone: (212) 761-4000
                     Fax: (212) 761-0086

Global Crossing announced Wednesday the company's common stock
began trading on the OTC Bulletin Board (OTCBB), effective as of
the opening of business on January 29, 2002. The OTCBB is a
regulated quotation service that displays real-time quotes, last-
sale prices and volume information in over-the-counter (OTC)
equity securities. OTCBB securities are traded by a community of
market makers that enter quotes and trade reports. The company's
common stock will trade under the ticker symbol of GBLXQ.

On January 28, 2002, Global Crossing and certain of its
affiliates (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated proceedings
in the Supreme Court of Bermuda.

CONTACT:  Global Crossing
          Press Contact
          Becky Yeamans
          +1 973-410-5857

          Analysts/Investors Contact
          Ken Simril
          +1 310-385-5200

GLOBAL CROSSING: Despite Demise, Officials Defend Vision
Officials of the Bermuda-based Global Crossing Ltd. defended Gary
Winnick's strategy -- wrapping the globe in 100,000 miles
(160,000 kilometers) of fiber-optic cable and selling it directly
to telecoms and Internet service providers -- saying it was a
sound move.

"In the last six months, it's almost a perfect storm kind of
environment. Everything crashed at once," said Dan Cohrs, Global
Crossing's chief financial officer.

Winnick, a former Wall Street financier, started Global Crossing
Ltd. in 1997. Within a year or so, the Company was selling space
on its high-speed voice and data link. It raised billions of
dollars and created a global fiber-optic network.

The vision propelled Winnick and many of his early investors into
the realm of the super wealthy. Winnick briefly was known as the
richest man in Los Angeles, with an estimated worth of US$6

However, that early promise came to a crashing halt in the face
of recession, rising debt, a drop in demand for high-speed data
transmission and the collapse of other upstart telecom firms that
soured the banking environment.

Early this week, after racking up debts of US$12.4 billion,
Global Crossing filed for bankruptcy protection in one of the
largest corporate failures ever.

Today, lenders that include J.P. Morgan, Merrill Lynch, Citigroup
and SBC Communications are scrambling to recover a fraction of
their original investments.

Global Crossing spent nearly US$15 billion over the last five
years to build the most far-reaching and up-to-date fiber network
in the world. It spans four continents and 27 countries and
claims more than 100,000 customers.

Shareholders, who helped make Global Crossing a company worth
US$55 billion in its heyday, are unlikely to recoup anything, the
Company said. Stock that was once above US$60 a share now trades
for pennies.


ELETROPAULO METROPOLITANA: S&P Lowers Ratings On Mounting Debt
Standard & Poor's lowered its local currency rating to double-
'B'-minus from double-'B', and its national scale rating to br-
single-'A' from br-single-'A'-plus on Eletropaulo Metropolitana
Eletricidade de Sao Paulo (Eletropaulo). The outlooks for the
local currency and national scale ratings remain negative. The
foreign currency rating is affirmed at double-'B'-minus/negative.

These actions reflect an increasing debt burden, as well as
significant near-term refinancing risk. On July 21, 2001,
Electricite de France (double-'A'-plus/Negative) and The AES
Corp. (double-'B'/Stable) signed a restructuring agreement to
redistribute their equity interests in LIGHT-Servicos de
Eletricidade S.A. and Eletropaulo, respectively; Eletropaulo is
indirectly owned through AES Elpa (previously LightGas Ltda.).
The transaction was approved on October 10, 2001, by the electric
utility regulator, and is expected to be consummated by the end
of February 2002.

AES Elpa retains US$539 million of the original Eletropaulo
acquisition financing debt. In addition, another interim holding
company, Transgas, was formed during 2000 to acquire preferred
stock shares of Eletropaulo. The remaining liability, totaling
BrR1.1 billion, will be paid off over two years. These additional
holding company obligations are viewed as obligations of
Eletropaulo because cash generated at Eletropaulo will service
them. Furthermore, Eletropaulo has a large, unfunded pension
obligation, which is viewed as debt, as well as several firm
purchased power commitments, which are considered debt-like.
Adjusting for these liabilities, funds from operations (FFO)
interest coverage and FFO to debt are expected to approximate
only 2 times (x) and 10%, respectively, during the next several
years. FFO interest coverage and FFO to debt (adjusted for off-
balance-sheet liabilities) were only 2.3x and 14%, respectively,
for 2000.

Eletropaulo is the electric distribution company for the city of
Sao Paulo, Brazil, and surrounding areas. Its ratings reflect the
challenges of operating in an emerging market and in an industry
in transition. Eletropaulo is highly leveraged when off-balance-
sheet liabilities are included, with adjusted total debt to
capital expected to average 80% over the next five years.
Eletropaulo has risk from currency fluctuations (about 60% of
third-party debt), although 83% of cross-border debt was hedged
in September 2001.

Offsetting these weaknesses are a stable service area, a 30-year
monopoly to distribute electricity in the most developed region
in Brazil, and strong operating parameters; energy losses of 9%
are low for a Brazilian distributor. Eletropaulo's customer base
has a large residential component, with high consumer incomes
compared to the rest of Brazil. Demand in this sector, the most
profitable one for Eletropaulo, is the least affected by economic

Standard & Poor's considers regulatory risk in Brazil to be high,
despite some positive developments. The government has negotiated
a settlement with distributors, whereby distributors will recover
the bulk of revenues lost due to energy rationing, which was
imposed in June 2001 because of Brazil's energy crisis;
Eletropaulo's sales volume declined by 25% in the third quarter
of 2001 compared to the same period in 2000. Per the recently
announced Energy Market Agreement, Eletropaulo will recover lost
revenues via an extraordinary tariff (6% on average) to be
recovered over three years. About 90% of the cash is expected to
be advanced by Banco Nacional de Desenvolvimento Economico
(BNDES), with the first tranche (one-third of total loan) to be
disbursed in February and the remainder when the Energy Market
Agreement is signed by all participants. Such loan will be repaid
with revenues from the tariff increase. The settlement will also
compensate Eletropaulo for noncontrollable costs (parcel A)
incurred in 2001.

Annual tariff reviews have been in accordance with concession
contract guidelines; Eletropaulo received a 16.61% increase in
July 2001. However, annual rate increases have not ensured full
recovery of noncontrollable costs, such as large power purchases
from Itaipu (a company owned by Paraguay and Brazil), which is
linked to the dollar. A recently created task force has
introduced an indexing mechanism that will track costs from 2002


The negative outlook reflects concerns over Eletropaulo's
refinaning risk. Given the high current interest rate
environment, Eletropaulo has opted not to fix debt at term and
has used short-term instruments to rollover its debt. This
exposes the company to material refinancing risk (46% of debt
matures in 2002). While Eletropaulo has demonstrated strong
access to bank and capital markets in the past, higher capital
markets volatility in 2002 due to presidential elections in
Brazil and the crisis in Argentina could increase cost of
financing and even make access to foreign markets difficult for
the second half of the year.

Analyst:  Anna Paula Dal Secco, Sao Paulo (55) 11-5501-8955
          Cheryl E Richer, New York (1) 212-438-2084

           Luiz D. Travesso, Chairman and President
           Orestes Gon‡alves Jr., VP Finance/Investor Relations

           THEIR ADDRESS:
           Avenida Alfredo Egidio de Souza Aranha 100-B,
           13 andar 04726-270 San Paulo
           Phone: +55-11-548-9461, +55 11 5696 3595
           Fax: +55-11-546-1933

ENRON: Yet To Sell Brazilian Assets To Pay Debt
Swiss investment bank UBS Warburg will take over Enron Corp.'s
trading business, and rival Dynegy Inc. expects this week to
acquire one of the fallen energy giant's most prized assets: the
16,500-mile Northern Natural Gas Pipeline system, the Associated
Press reports.

The move will leave Enron with all or part ownership of three
smaller pipelines and several money-losing assets that are also
up for sale to help pay company debt. Those assets include power
operations in Brazil and India, Enron's broadband unit and Azurix
Corp., which owns, operates and manages water and wastewater

Stephen Cooper, the veteran restructuring specialist chosen to
take the helm of embattled Enron Corp., expressed confidence that
the fallen energy giant is strong enough to survive bankruptcy,
even without its trading business.

"It's certainly not going to be easy, there will certainly be a
number of speed bumps and potholes, but ... from hindsight,
hopefully in the not too-far-distant future, we'll be able to say
this worked out as well as it possibly could have worked out for
all parties' interests," Cooper said.

Cooper said Enron's current organization, its businesses, its
customer base and liquidity remain adequate to survive its
Chapter 11 filing and some day emerge, although smaller and
without its flagship trading platform.

TRANSBRASIL: Govt. Suspends Resumption Pending Clarifications
The Brazilian government is yet to approve the resumption of
Transbrasil's operations pending a clear documentation of the
recent ownership change for the airline. In addition, officials
expect clarification of exactly where the new influx of capital
for the airline has come from, reports South American Business

Transbrasil's new owner, Dilson Prado da Fonseca, has not yet
established contact with Shell or BR Distribuidora to negotiate
fuel supplies for the airline, which were cut off for non-payment
of bills in December. Transbrasil owes BRL4 million to Shell and
BRL14 billion to BR.

Prado has said that he would use the initial capital, from a
debenture issue, to pay the fuel companies, passengers with
tickets and the Company's employees.

Word on the street is a deal may be in the works with a US
freight carrier such as Fedex or Atlas, or that the sale of the
company is a ruse by which the previous owner can avoid having
goods seized by creditors.


TELEFONICA CTC: Chile Denies Request To Boost Rates
Telefonica CTC Chile suffered a big blow when the government
shunned its bid to overturn a reduction in calling rates. The
country's largest telephone company calls the decision
"disconcerting and inadequate."

According to a Bloomberg report, Chile's Economy Minister Jorge
Rodriguez and Transport Minister Javier Etcheberry informed
Telefonica CTC in a letter that they had rejected Telefonica
CTC's request to revise its rates.

The decision, which came after almost three years of haggling,
leaves Telefonica CTC, a former state-run monopoly, empty-handed.
Telefonica CTC has suffered three years of losses due to the
reduction in calling rates.

The Company, a division of Telefonica SA of Spain, lost 173.7
billion pesos ($256 million) from 1999 through the first nine
months of last year as revenues continually fell. It plans to
report fourth quarter earnings this week.

The rejection is a blow to Bruno Philippi, who was named chairman
of Telefonica CTC in March in an effort to reverse losses and
persuade the government to stop fixing the Company's rates.
Analysts said the lower fees would crimp earnings until the
decree expires in 2004. Last year, Telefonica threatened to sue
the government if its appeal was denied.

CONTACTS:  Bruno Phillippi Irarr zabal, Chairman
           Claudio Mu¤oz Zuniga, CEO
           Julio Covarrubias Fernandez, CFO
           Ver˘nica Gaete, Financial Analyst
           Marˇa Jos‚ Rodrˇguez, Financial Analyst
           Florencia Acosta, Financial Analyst
           Gisela Escobar, Head of Investor Relations

           THEIR ADDRES:
           Compa¤ˇa de Telecomunicaciones de Chile S.A.
           Av. Providencia 111, Piso 2
           Santiago, Chile
           Phone: +56-2-691-2020
           Fax: +56-2-691-2392

TELEX CHILE: Shareholders Approve US$387MM Capital Boost
Telex-Chile's shareholders officially agreed to a CLP263-billion
(US$387 million) capital increase for the company. The deal marks
the start of a three-stage process of a shareholders' pact
whereby US-based investment fund Southern Cross is to up its
stake in the Chilean telecoms operator, Business News Americas
reports. The amount approved is CLP14 billion more than what the
board announced at an extraordinary general meeting held

Southern Cross is yet to embark on a US$106-million debt buy-back
program that will slash the Company's debt to US$10 million -
US$12 million, and a public tender offer for Telex shares in
February, in order to consummate the pact.

Southern Cross expects to subscribe for US$100 million worth of
the capital increase, subsequently taking control of Telex about
30 days after the public tender, said Southern Cross
representative Raul Sotomayor.

The debt acquisition program includes a US$10-million cash
injection from Southern Cross, Sotomayor said, adding that the US
fund is seeking a US$15-million line of credit.

In the meantime, according to Telex Chairman Juan Pablo Roman,
the board will set up a committee to handle operations during the
change in ownership.

Investment banks and creditors took over 51 percent of Telex in
October 1999 from the Ibanez and Radic families as part of a
series of measures designed to recoup their investments. Telex
had debts of US$220 million and was forced to sell its mobile and
local telephony subsidiaries as part of the financial


AEROMEXICO: Economic Woes Prompt 11% Drop In Fares
Aeromexico, which is controlled by government-owned holding
company, has seen its fares decrease by 11 percent since October
2000 as a consequence of the economic slowdown and declining
demand, reports Mexico City daily Reforma. Aeromexico Marketing
Director Alejandro Yberri said that little ground was recovered
during the most recent tourist season.

"Demand for airline services is linked to countries' economic
growth. We've registered a light recovery, but we are still 14
percent or 15 percent down with respect to the year before," said
Yberri. Meanwhile, Yberri announced that the airline will invest
US$350,000 to put emergency medical equipment on planes.

BITAL: Announces Increase In 4Q01 Net Earnings
Consolidated net earnings at Mexican financial group Grupo
Financiero Bital climbed to MXN98.0 million in 4Q01 from MXN90.4
million in the same period in the previous year, reports Reuters.

The group's banking unit posted fourth-quarter net earnings of
80.5 million pesos, compared with 143.9 million pesos a year
earlier, the group said in a news release.

The group's capitalization index stood at 13.13 percent at the
end of the fourth quarter, up from 12.26 percent at the end of

The past due loan portfolio was 7.0 percent of total loans at the
end of 2001, an improvement over the 7.1 percent reported at the
end of 2000 and 7.3 percent at the end of the third quarter of

Bital has languished as one of the most poorly capitalized banks
in Mexico.

CONTACTS:  Engr Luis Berrondo Avalos, Chairman
           Atty Jaime Ruiz Sacristan, CEO
           German Osuna Castelan,  General Manager Finance
           Atty Fenando Ysita Del Hoyo, Secretary

           THEIR ADDRESS:
           Grupo Financiero Bital SA de CV
           Paseo de la Reforma No 243 Cuauhtemoc
           Mexico DF    06500
           Phone   +52 5 721 5286
           Home Page

MEXICAN AIRLINES: Looking To Quash Asur's Rate Increases
Aeromexico, Mexicana, Aerolitoral and Aeromar launched a suit
against the Communications and Transport ministry, reports Mexico
City daily Reforma. The suit seeks to nullify airport management
company Asur's rate increases registered in the second half of

However, Asur Finance Director Adolfo Castro Rivas said the suit
is not against his company. According to him, the rate increases
are based on regulations, fixed by an operations committee, and
finally approved by the ministry.

As of June 1, 2001, Asur's various rates were increased by
between 6 and 10 percent after remaining static for the previous
24 months, said Castro. The airlines have refused to pay some
MXN4 million related to the increased fees.

           Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or

           Jenny Jenks, Marketing Director, International
           Division of Mexicana Airlines, +1-210-491-9764, or


SIDOR: Initiates Labor Talks To Find Financial Balance
Venezuelan integrated steelmaker Sidor managed to start wage
negotiations in a "harmonious environment." The Company is making
a bid to preserve the its financial health, said chairwoman
Maritza Izaguirre.

Izaguirre said that SIDOR has learned from its mistakes in the
past, citing 2001 when an impasse in talks led to a bitter 22-day
stoppage with strikers padlocking the steel mill's gates,
followed by threat of a national strike. Since then, the global
steel market has gotten tougher, prices have fallen and Ciudad
Guayana-based Sidor has defaulted to the tune of US$31.3 million
on loan repayments. Its majority shareholder, multinational
consortium Amazonia, defaulted by US$8.1 million.

"We have learned from past errors and now both parties are
talking under the premise that the Company is going through a
series of adjustments caused by variations in the global steel
market, which has led to the union being more receptive," she

The steel crisis has already led the company to ditch plans for
investing another US$360 million to take capacity to 4Mtpy within
two years. SIDOR currently expects to limit the increase to
3.1Mtpy. Investments and process improvements expanded capacity
by 17 percent to 2.8Mtpy in 2000-01.


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