TCRLA_Public/020220.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

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

            Wednesday, February 20, 2002, Vol. 3, Issue 36


A N T I G U A   &   B A R B U D A

LIAT: Inaugurates Two New Daily Flights


AEROLINEAS ARGENTINAS: Air Comet To Restart NY Flights In March
ARGENTINE CORPORATIONS: Ratings Suffer Despite Veto On BK Law
BANKING SYSTEM: CB May Emulate Korean Model for Crisis Solution
BANCO GALICIA: Takeover Looms Under Mounting Pressure
CABLEVISION: Recent Default Prompts S&P To Downgrade Ratings
IMPSAT: Finalizing Debt Restructuring Plan With Morgan Stanley


EMBRATEL: Negotiating to Maintain Existing Debt Structure


BANCO DEL PACIFICO: Ecuador To Boost Capital, Preps For Sale


AHMSA: Nears Securing US$9-Mln Loan From Banca Afirme
BITAL: Federal Auditor Orders IPAB To Re-Audit Portfolio
BITAL: Shares May Rise On Approval Of Capital Increase
GRUPO ALFA: Inaugurates Fifth Plant At Nemak Car Parts Factory
MEXLUB: Mulls Two Options Before Appealing To Pemex's Decision


SIDERPERU: Bankruptcy Yields Better Results
SIMSA: Halves Net Losses On Cost Reduction Efforts

T R I N I D A D   &   T O B A G O

BWIA: Redesigns Business Plan To Secure All Jobs
BWIA: Explains Removal Of Agents' Access To Ticketing System


GALICIA URUGUAY: Solvency Not A Concern

     - - - - - - - - - -

A N T I G U A   &   B A R B U D A

LIAT: Inaugurates Two New Daily Flights
Caribbean airline LIAT inaugurated last week two daily services
from its Barbados hub to and from the Grenadine Islands, relates
The Barbados Advocate.

These services, which heralded the return of LIAT to the
Grenadine Islands, are being operated in response to market

The new LIAT flights will be operated by its CaribSky Alliance
Partner TIA, the carrier based in Barbados, using Twin Otter

One flight will link Barbados directly with Mustique, Union
Island and Carriacou, while the other one will operate between
Barbados, Canauan and Bequai.

In November, LIAT obtained a much-needed capital boost from the
governments of Antigua & Barbuda and St. Vincent & the
Grenadines. Concurrently, all of the nine Caribbean governments,
to which LIAT owed money, agreed to the airline's offer to accept
shares in lieu of debt.

CONTACTS: Garry Cullen, CEO
          David Stuart, VP of Marketing
          LIAT Limited Corporate Headquarters
          V.C. Bird International Airport
          P.O. Box 819
          St. John's, Antigua
          West Indies
          Telephone: 1 (268) 480-5600/1/2/3/4/5/6
          Facsimile: 1 (268) 480-5625


AEROLINEAS ARGENTINAS: Air Comet To Restart NY Flights In March
Air Comet will restart Aerolineas Argentinas' flights to New York
at the beginning of March in a bid to regain Aerolineas'
international routes after it ceased its activities and file for
bankruptcy protection.

Air Comet, the new owner of Aerolineas Argentinas formed by the
Spanish travel operator agency Marsans, Spanair and Air Plus, has
also launched a promotion of international tariffs in Argentinean

Aerolineas Argentinas' new owner aims to complete this year with
a US$900 million turnover to improve the financial situation of
the Argentine airline, which had to call in the receivers with a
debt of US$1.1 billion.

Through Air Comet's management, Aerolineas Argentinas has
increased its market share in national flights from 26 percent to
54 percent.

ARGENTINE CORPORATIONS: Ratings Suffer Despite Veto On BK Law
Although the government has vetoed certain articles in the
Bankruptcy Law, S&P said the ratings on Argentine corporate
credits are still under pressure.

The veto, which was declared on February 15, 2002, removed, among
other provisions, Article 15 of the law as passed by Congress in
late January, which established that banks were given a 90-day
period to restructure all loans through an agreement with each

If, at the end of that term, no agreement was reached, the
financial institution had to make provisions for 100 percent of
the debtor's loan.

According to S&P, the application of this provision would have
implied compulsory renegotiations, circumstances that would be
considered a default. However, it said uncertainties remain
regarding the capacity of Argentine entities to service debt in a
timely manner.

S&P said it still views the decree establishing the mandatory
pesification of financial obligations originally contracted in
foreign currency and a potential change in maturity schedules as
a material change in the original terms of the financings.

"All of these factors, at least initially, will mean a worsening
of terms from the creditor's perspective, and are therefore
considered similar to a default," S&P said.

BANKING SYSTEM: CB May Emulate Korean Model for Crisis Solution
Argentine central bank adviser Guillermo Nielsen revealed that
Argentina, in its bid to find a solution to its current debt
crisis, is considering replicating Korea's system of setting up a
company to buy billions of dollars of bad debts that are then
repackaged and sold, reports Bloomberg.

However, the potential plan has spurred skepticism among

"Korea was able to do it because it's Korea, not Argentina," said
Wilbur Ross, chairman of WL Ross & Co., which raised $1.5 billion
of investment for South Korea in 1997 and 1998.

According to Ross, foreign investors lack confidence in its
bankruptcy laws and courts, which Korea depended on to attract
foreign investment to buy distressed debt taken over by the Korea
Asset Management Corp..

Argentina, which analysts estimate needs to assume about a
quarter of state banks' $26 billion of loans, is unable to borrow
after defaulting on most of its $141 billion of debt and has
failed to persuade the International Monetary Fund to resume

The central bank's initial plan may focus only on bad loans held
by Banco de la Nacion and other state banks. Banco de la Nacion
and Banco de la Provincia de Buenos Aires, also controlled by the
government, hold about 30 percent of the nation's banking assets.

Analysts say smaller private banks may fail, while larger
foreign-owned banks such as Banco Santander Central Hispano's
Banco Rio de la Plata may reduce business or decide to pull out
of Argentina to avoid further losses, estimated at tens of
billions of dollars.

Argentina also will need to design a banking system that
depositors, who pulled out 17 percent of their savings last year,
will trust, Nielsen said.

BANCO GALICIA: Takeover Looms Under Mounting Pressure
Banco de Galicia y Buenos Aires SA, Argentina's third-largest
bank, is due to be taken over soon before it caves in.

According to a report released by Bloomberg, Argentine state bank
Banco de la Nacion Argentina will take over Galicia to avert its
collapse but economy minister Jorge Remes Lenicov and central
bank president Mario Blejer are yet to decide on how to put the
takeover into effect.

Galicia closed its unit in Uruguay this week for at least 90 days
after it lost US$500 million, or a third, of deposits there since
November. Argentina's central bank, which has lent to Banco
Galicia to keep it afloat, said in a statement it would take "all
available actions" to protect depositors and workers.

           Teniente General Juan D. Perón 456, Piso 3
           1038 Buenos Aires, Argentina
           Phone: +54-11-4343-7528

CABLEVISION: Recent Default Prompts S&P To Downgrade Ratings
CableVision, the largest cable-TV provider in Argentina, has had
its ratings downgraded by Standard & Poor's Corp to D from CC/SD.

The rating action, according to an AFX report, came after
CableVision failed to make a principal maturity payment on its
US$100 million floating rate notes due February 15, 2002.

"CableVision's financial flexibility is severely constrained by
the default, as well as the deterioration of available credit due
the political and economic uncertainties, and the onerous
interest payments that the Company has to face in 2002," S&P
credit analyst Ivana Recalde said.

According to the ratings agency, CableVision has about US$70
million in revolving short-term bank lines and has to cover
coupons for about US$6 million in March and about US$36 million
in May. The Company has about US$865 million in debt, including
the FRNs and US$624 million of rated bonds issued under a US$1.5-
billion global medium-term note program.

S&P noted that CableVision made the interest payment on the FRNs
due February 15, and has asked FRN holders to defer the capital
payment for 120 days while the terms are renegotiated. However,
this request has not been granted yet.

"Nevertheless, the Company has an aggressive financial profile
and a high financial burden, with increased refinancing risk,"
the ratings agency added.

IMPSAT: Finalizing Debt Restructuring Plan With Morgan Stanley
Impsat Fiber Networks' board of directors and the investment bank
Morgan Stanley are finalizing a plan to restructure the Argentine
telecom company's US$1-billion debt.

According to an El Cronista report, the plan will see an increase
of Morgan Stanley's equity participation in the Argentine company
from 16 percent to control almost the total of its shares.

Pescarmona, which at the moment owns 46 percent of Impsat's
capital, is studying the possibility of leaving this business
entirely. British Telecom has 19 percent of Impsat's shares.

Morgan Stanley is one of the main creditors of Impsat and it
would capitalize the debt in shares.

Impsat owes US$660 million in corporate bonds, US$260 million to
technology suppliers (like Nortel Networks and Lucent
Technologies) and US$80 million to other financial companies.

CONTACT: IMPSAT Fiber Networks, Inc.
         Investor Relations:
         Guillermo Jofre / Gonzalo Alende Serra
         Houlihan Lokey Howard & Zukin Capital
         John McKenna / Lily Chu
         Citigate Dewe Rogerson Inc.
         John McInerney / Robin Weinberg


EMBRATEL: Negotiating to Maintain Existing Debt Structure
Aiming to maintain its current debt structure, Brazil's leading
long-distance telephone operator Embratel is negotiating a
syndicated loan of US$300 million from a group of Brazilian and
foreign banks, reports South American Business Information.
Embratel's debt at the end of 2001 totaled BRL3.7 billion, of
which BRL1.1 billion comes due soon.

The Company's strategy for this year is to generate cash, with
its Ebitda rate (profit before taxes, interest, depreciation and
amortization) expected to increase by 70 percent.

A new system of call monitoring according to client profiles
should help to diminish customer defaults. The Company also
intends to avoid price wars similar to those encountered with
Intelig last year.

To see Embratel's financial statements:

CONTACT:  Embratel Participacoes S.A.
          Silvia M.R. Pereira
          Investor Relations
          tel: (55 21) 2519-9662
          fax: (55 21) 2519-6388
          Helena Duncan/Mariana Palmeira
          Press Relations
          tel: (55 21) 2519-3653/3654
          fax: (55 21) 2519-8010


BANCO DEL PACIFICO: Ecuador To Boost Capital, Preps For Sale
Ecuador will boost state-owned Banco del Pacifico SA's capital by
US$121 million in an effort to increase the bank's attractiveness
as it readies it for sale.

According to a Bloomberg report, the regional development bank
Andean Development Corp. will provide US$76 million of the funds,
while the central bank will invest the remaining US$45 million.

"The capitalization will provide the necessary liquidity to back
the deposits of the bank and support the growth of its
operations," the central bank said.

Pacifico was intervened and taken over by the government during
Ecuador's 1998-1999 financial crisis. The bank was originally
scheduled to be sold this year. However, due to this year's
elections and the financial crisis in Argentina that had scared
off international investors to invest in Latin America, the bank
won't be sold until 2003.

In October 2001, Interdin & Ahead Advisory took over the bank's
management in a bid to make Pacifico more attractive to foreign

Pacifico had US$528.1 million in assets as of Dec. 1, which
accounted for 8.9 percent of the assets of the banking system.
About 46 percent of its loans are non-performing.

           Ec. Javier S nchez Pulley, Presidente del Directorio
           Dr. F,lix Herrero Bachmeier, Presidente Ejecutivo

           P. Ycasa 200 GUAYAQUIL EuroADOR
           Tel:  + 593 566010
           Fax:  + 593 564636


AHMSA: Nears Securing US$9-Mln Loan From Banca Afirme
Altos Hornos de México (AHMSA) is close to securing a US$9-
million loan from Banca Afirme, reports Mexico City daily el
Economista. The loan will be used to pay off its suppliers in
order to insure its future supply of raw materials and services.

According to Elizondo Delgado, head of the National Manufacturing
Chamber Canacintra, this loan would be paid as soon as the
Company sells its product.

Delgado revealed AHMSA had paid just over US$14.1 million to
local providers last week, paying only 10 percent of the debts
owed to each supplier.

The Company has a total debt of US$1.8 billion.

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

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

BITAL: Federal Auditor Orders IPAB To Re-Audit Portfolio
Bital and several other Mexican banks will undergo another audit
by the Bank Savings Protection Institute (IPAB), reports Mexico
City daily El Universal.

According to Bernardo Gonz lez Aréchiga, new independent board
member of the IPAB, the audit was ordered by the Federal Auditor
in order to detect irregular credits.

The new audits will concentrate on the credits classified as `Aa'
by Canadian auditor Michael Mackey during his previous audit of
Mexico's banks, says the report.

Still, "If it's necessary, as much of the portfolio as is
necessary will be audited," said Gonzalez.

In the case of the discovery of irregular credits, the loans
would be returned to the banks and that would decrease the cost
of the bank bailout, said Gonz lez Aréchiga.

The `Aa' rated portfolio is worth around MXN22 billion (US$2.42

Gonz lez Aréchiga said that once the audits are complete, IPAB
would be able to exchange Bank Fund for Savings Protection
(Fobaproa) promissory notes.

BITAL: Shares May Rise On Approval Of Capital Increase
The price of Grupo Financiero Bital SA's shares, Mexico's fifth-
largest bank by assets, may increase after the Company announced
its shareholders approved the sale of US$400 million in new
shares to help strengthen its finances.

Jose Luis Berrondo, Bital's chairman, said existing shareholder
will buy about US$100 million worth of shares, while the
remaining stake will be sold to a group of foreign investors that
may include ING Barings LLC and General Electric Capital Corp.

Part of the capital increase is the cancellation of 383.4 million
series `O' shares and replacingthem with 863.4 million new series
`O' shares valued at MXN2 per share for a total amount of
MXN1.726 billion.

Furthermore, the group will also issue 126.9 million new series
`L' shares valued at MXN2 per share for a total amount of 253.9
million shares.

After the capital increase, the group's share capital will amount
to MXN1.73 billion, comprising MXN1.29 billion of series `O'
shares and the remaining 440 million pesos in series ``L''

Bital has until yearend to sell the shares.

Bital, like most Mexican banks, was brought to its knees by a
December 1994 peso crash, which pushed interest rates over 100
percent and caused millions of debtors to default on loans.

GRUPO ALFA: Inaugurates Fifth Plant At Nemak Car Parts Factory
Enrique Florez, communications director at Mexico's Alfa group,
announced that the industrial conglomerate has opened a fifth
plant at its Nemak car parts factory in the northern city of
Monterrey, reports Business News Americas.

The new plant, which required total investment of US$225 million,
has a total area of 18,000 sq. m. and annual production capacity
of 1.4 million aluminum blocks for auto engines.

"This is plant number five and four others are in operation,
producing 7.2 million pieces last year," Florez said. The new
plant will create around 1,200 jobs.

Nemak is aiming for half of the U.S. market for engine cylinder
heads within four years, said company Director Manuel Rivera. The
company currently has 47-percent market share in the United
States, Mexico and Canada, and expects to reach 54 percent by

"Nemak is the largest producer of aluminum heads in the world,"
Rivera said.

The Alfa group's main business is petrochemicals, followed by
iron and steel. It also has interests in foodstuffs.

In January, the group announced that its consolidated net debt
decreased by US$36 million in the final quarter of 2001. At the
end of the year, Alfa's net debt totaled US$2.648 billion, down
US$212 million in 12 months.

MEXLUB: Mulls Two Options Before Appealing To Pemex's Decision
Mexicana de Lubricantes (MexLub) only had until February 15 to
decide whether to file an appeal against Petroleos Mexicanos'
(Pemex) move to cancel its contracts and cut ties with the
Company, says Mexico City daily el Economista.

If MexLub decides to initiate legal action, two cases could be
filed, one by Impulsora Jalisciense and another through Mexicana
de Lubricantes. Additionally, MexLub would plan to import basic
products in order to operate, since Pemex has cancelled its
contract to supply the Company with products.

However, MexLub is also considering two alternatives before
opting for a lawsuit: to allow Pemex to buy 49 percent of
Impulsora Jalisciense, Pemex's partner in MexLub; or to sell
Pemex a stake in Mexlub and the latter would continue to produce
a line of lubricants.

Sources at Pemex have disclosed that the decision to end the
Mexlub contract for oils and lubricants and take away the Mexlub
brand name license was based on irregularities in the Company's
financial and labor records.


SIDERPERU: Bankruptcy Yields Better Results
Peruvian integrated steelmaker Siderperu, which is operating
under the Peruvian form of Chapter 11 bankruptcy protection,
expects recovery to come this year, reports Business News

The chimbote-based company told the Lima stock exchange that its
average monthly operating margin has climbed back to 7.5 percent
of sales (PEN2.7 million) in the 2H01 after falling to 4.5
percent (PEN1.8 million) in the 1H01.

The 2H01 performance improvement came despite a worsening in
Peru's three-year recession in which construction, the sector,
which consumes most of its output, has been particularly badly

Siderperu said the other main factor behind its better
performance in the recent months was the bankruptcy process,
which is leading to an agreement to a debt refinancing with its
creditors. The final vote is due February 20.

Siderperu has a liquid steel capacity of 520,000tpy, and makes
long and flat products. Among its key clients is Moly-Cop in Peru
and Chile that manufacture steel grinding balls for mills. The
three companies are managed by GS Industries of South Carolina.

SIMSA: Halves Net Losses On Cost Reduction Efforts
Peru's San Ignacio de Morococha (Simsa) reaped the rewards of its
cost reduction efforts, reports Business News Americas.

The Peruvian lead-zinc miner boasted to the Lima bourse that it
managed to slash by half its net loss to PEN18.3 million (US$5.27
million) in 2001, from 2000's PEN35.9 million.

Costs fell 23 percent in the final quarter of 2001 to US$38.39/t,
though production was down.

Despite the improvements, shareholders voted to go into
bankruptcy protection late December. Latest reports, however,
revealed that a proposed restructuring of its US$18.2-million
debt should be ready for creditors to vote on by June.

Simsa's debt is divided among suppliers with US$9.71 million,
banks US$3 million, workers US$2.46 million, tax authorities
US$460,000 and others US$2.6 million.

Simsa's biggest single shareholder is the world's number two
copper miner, Phoenix-based Phelps Dodge, which had recommended
at the shareholders' meeting that the Company declare itself

Simsa mines at San Vicente in the Chanchamayo area of Junin
department in central Peru and ranks as a medium-sized Peruvian
mining company.

T R I N I D A D   &   T O B A G O

BWIA: Redesigns Business Plan To Secure All Jobs
In a bid to save jobs, the executive and management of BWIA West
Indies Airways are redesigning a business plan to improve the
airline's efficiency without having to retrench workers, BWIA
Area Manager Dawn Murray announced in The Stabroek News report.

Murray's announcement came in reaction to BWIA Chief Executive
Officer Conrad Aleong's recent announcement in the media of
possible staff cuts at all levels of the Company to keep it
afloat in the aftermath of the September 11 terrorist attacks on
the USA.

Dawn Murray predicted that re-designing exercise might last for
another "couple of weeks."

The Company is still finalizing a review of its operations.
Murray refused to speculate about the outcome of the review, but
assured that the Company was trying hard to save jobs.

BWIA: Explains Removal Of Agents' Access To Ticketing System
BWIA, in January, removed local travel agents' access to its
domestic ticketing system, reports The Trinidad Express. At the
end of January, travel agents no longer had access to BWIA's
Sabre booking system for the Tobago route on their computer

Unable to see what flights are available to passengers on the
Bwee Express service, agents are complaining that they have to
make phone calls back and forth between passengers and BWIA to
book a flight.

However, BWIA said that by removing the access, it is saving
money from a high service charge which arises out of Sabre system
bookings that was biting into its already break-even position on
the domestic route.

BWIA's director of Corporate Communications Clint Williams
explained that the removal of the system will help the
financially-strapped airline save money.

The domestic ticket of US$47 or TT$300 was attracting a service
charge of US$7 ($44) through the use of the Sabre system to book
tickets. The airline essentially was picking up the $44 charge on
every $300 Tobago ticket.

"For an airline seeking to restructure in post September 11
circumstances, clearly this a very heavy burden to bear on each
ticket," Williams said.

The availability of 150 telemarketing agents at BWIA's Call
Centre also made the telephone system more viable for travel
agents to call and check Tobago flights, he said.

Acknowledging that there might be some hiccups in making the
change-over, Williams maintained that it was a move by BWIA to
reduce costs and to sustain the TT$300 airfare to Tobago.


GALICIA URUGUAY: Solvency Not A Concern
Grupo Financiero Galicia SA is facing liquidity problems not
solvency in Uruguay, Guillermo Laje, a senior executive at the
bank, revealed in an article released by Dow Jones Newswires.

"Galicia Uruguay has sufficient reserves. What it doesn't have is
sufficient liquidity," Laje said.

Uruguay's Central Bank last week suspended activity at the bank,
which is wholly controlled by Argentina's Banco Galicia y Buenos
Aires SA (GAL). The suspension for 90 days came after US$500
million, or a third of the bank's deposits, were withdrawn.

According to analysts, Banco Galicia's depositors in Uruguay
pulled funds on concern the bank would collapse after Argentina
defaulted on US$95 billion of bonds, seized deposits and devalued
its currency.

Already, Uruguay's Central Bank President Cesar Rodriguez Batlle
announced that he has no plans to provide funds to bailout
Galicia Uruguay as he considered it an "offshore" bank and
therefore undeserving of central bank aid.

          World Trade Center
          Luis A. Herrera 1248 Piso 22 Montevideo
          Tel.:(+598-2) 628-1230


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 VaĄo, Editors.

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

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