TCRLA_Public/020226.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

            Tuesday, February 26, 2002, Vol. 3, Issue 40

                           Headlines



A R G E N T I N A

BANCO GALICIA: Seeks Equity for Debt Bailout From Central Bank
BNL: Fitch Affirms Ratings, Downgrades Outlook To Stable
SALTA HYDROCARBON: S&P Lowers Ratings To `CCC+', WatchNeg
SUNSHINE MINING: Pirquitas Mine Virtually Defunct
TGS: S&P Cuts $176 Mln, $75 Mln IADB B loans


B E R M U D A

GLOBAL CROSSING: SEC Includes Velocita In Growing Investigation
GLOBAL CROSSING: Finkelstein, Thompson Files Class Action Suit
GLOBAL CROSSING: Shareholders Group Files Plan Bail Out Company
GLOBAL CROSSING: Asian Buyers Reaffirm But Won't Sweeten Offer
GLOBAL CROSSING: To Offer Employees Voluntary Separation Package
GLOBAL CROSSING: CSC Terminates $400M Outsourcing Deal
GLOBAL CROSSING: Chairman Resigns From Board of K1 Ventures


B R A Z I L


CESP: Shares Up Interest Rate Cut
EMBRAER: Blames Slower Recovery on US Attacks, Sector Weakness
TRANSBRASIL: Finance Ministry Freezes Assets On Unpaid Debt


M E X I C O

GRUPO ALFA: Shares Up On Expectation Of Recovery, Debt Rollover
GRUPO VITRO: Selling Remaining Joint Venture Stake To Whirlpool
MEXLUB: Reiterates Decision To End Contract With Impulsora


     - - - - - - - - - -


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

BANCO GALICIA: Seeks Equity for Debt Bailout From Central Bank
--------------------------------------------------------------
Beleaguered Argentine bank Banco Galicia has asked the Central
Bank to take over around half the Company in return for massive
debt forgiveness.

Galicia director Daniel Llambias said Galicia wants to exchange
part of the roughly ARS2 billion (US$985 million) it owes the
Central Bank for new shares. The proposed deal would give the
Central Bank or another state entity "about half" of Galicia's
capital.

"We have few other options," Llambias said, adding the amount of
debt to be swapped was being negotiated with the Central Bank,
but the government could end up with majority control of the
bank.

"This will improve our image, because it improves Galicia's
financial stability," Llambias said.

Meanwhile, other talks between Galicia and its creditors made
some progress, according to a statement released Friday evening.

"Conversations progressed with local and international creditors
who showed their willingness to provide up to $1.12 billion," to
the bank, the statement said.

Overall, prospects for a rescue package look bleak. The
government, near bankrupt itself following last month's default
on part of its $141 billion debt and a traumatic currency
devaluation, showed little initial enthusiasm for a possible
deal.

In response to a question about Galicia on Friday morning,
Economy Minister Jorge Remes Lenicov said: "This is an issue that
goes beyond a strictly financial and banking realm, but it is not
in our spirit to take on private banks. We want private banks to
strengthen themselves."

Founded in 1905, Galicia grew to become Argentina's largest bank
without state ownership, holding about US$16 billion of assets,
more than a third in state debt, before the government defaulted
on US$95 billion of bonds and devalued the peso last month.
Depositors, fearing it would collapse without a dominant
international or state owner, withdrew money faster from Galicia
than from other banks.

CONTACTS:  BANCO DE GALICIA Y BUENOS AIRES
           Teniente General Juan D. Per›n 456, Piso 3
           1038 Buenos Aires, Argentina
           Phone: +54-11-4343-7528


BNL: Fitch Affirms Ratings, Downgrades Outlook To Stable
--------------------------------------------------------
Fitch Ratings affirmed Friday the Long-term and the Short-term
ratings of Banca Nazionale del Lavoro ("BNL") at 'BBB+' and 'F2'
respectively, with the Support rating at '2' and the Individual
rating at 'C/D'. The Outlook, however, is lowered to 'Stable'
from 'Positive'.

The lowered Outlook reflects the setback to BNL's improving
financial condition stemming from the crisis in Argentina. Fitch
welcomes the bank's conservative approach in completely writing
down through EUR527 million of provisions for its investment in
Argentina. The impact from this will cause operating profit for
2001 to fall to a low level. As a result of uncertainties in
BNL's operating environment, the agency considers that net income
and, through retained earnings, the bank's capital base will
remain strained in 2002 and probably into 2003.

BNL owns Banca Nazionale del Lavoro SA ("BNLSA"). At year end-
2001, preliminary accounts showed that BNLSA had equity of
USD305m (representing c.8% of the group's equity), total assets
of USD3.3bn, and reached break even for the year. The group is
recovering from high levels of doubtful loans, undistinguished
profitability, as well as a thin capital base - factors that have
restricted its ability to absorb large shocks. BNL intends no
further investment in Argentina, which should help preserve the
group from additional shocks. Meanwhile, the bank continues to
carry out necessary restructuring. The parent bank is improving
its risk management and is profitable.

CONTACTS:  Paolo Fioretti, Milan, Tel: +39 02 87 90 87 202
           Matthew Taylor, London, Tel: +44 (0)207 417 4345

           BNL Contacts:
           Luigi Abete, Chairman
           Davide Croff, Managing Director, CEO
           Ricardo Lupe, CFO

           BNL Address:
           Via Vittorio Veneto, 119
           Rome, Italy
           Phone: +39-(0)06-47-02-1
           Fax: +39-(0)06-47-02-7336
           http://www.bnl.com.ar


SALTA HYDROCARBON: S&P Lowers Ratings To `CCC+', WatchNeg
---------------------------------------------------------
Standard & Poor's lowered Friday its rating on Salta Hydrocarbon
Royalty Trust to triple-'C'-plus from single-'B'-minus. The
rating remains on CreditWatch with negative implications, where
it was placed on July 13, 2001, following Standard & Poor's
reassessment of the Province of Salta's oil and gas industry
risk, on which the transaction's cash flow is dependent (see
list).

Recent economic measures, coupled with the many uncertainties
surrounding the sector, continue to significantly increase risk
to the oil and gas industry in the province of Salta. The
sector's economics have changed. In order to fully determine the
impact, some short-term definition is needed. However, further
deterioration is possible since natural gas prices will have to
be lowered as a result of the currency devaluation. In addition,
the recently instituted 20% export duty on crude oil will further
erode realized profits, especially in an environment of lower
West Texas Intermediate.

Furthermore, retail prices are very likely to be controlled,
explicitly or by the mere threat of price controls, in order to
control inflation. Given the new adverse economic scenario for
the sector, investments will very likely be cut down
significantly, affecting future production capacity.

The rating on Salta Hydrocarbon Royalty Trust remains on
CreditWatch with negative implications due to the continuing high
volatility and uncertainty in the current economic, political,
and financial situation in Argentina.

    Salta Hydrocarbon Royalty Trust
    $234 million notes due 2015                 CCC+        B-

CONTACTS:  STANDARD & POOR'S
           Jorge Solari, Buenos Aires, +54-114-891-2114
           Juan Pablo De Mollein, Buenos Aires, +54-114-891-2113
           Diane Audino, New York, +1-212-438-2388
           Lidia Polakovic, Buenos Aires, +54-114-891-2130
           Pablo Lutereau, Buenos Aires, +54-114-891-2125


SUNSHINE MINING: Pirquitas Mine Virtually Defunct
-------------------------------------------------
Sunshine Mining and Refining Company (OTCBB:SSMR) announced
Friday the substantial completion of the mothballing and securing
of its Sunshine Mine in northern Idaho and the placing of the
Pirquitas Mine in northern Argentina on reduced care and
maintenance.

As a result of continued depressed silver prices, Sunshine was
unable to recommence any of its operations at its Idaho or
Argentine properties and used proceeds of its credit facility to
secure the properties and place them in a position for future
reopening or sale to third parties.

As of October 3, 2001, Sunshine had borrowed the full $6.5
million commitment under its credit facility. Since that time,
Sunshine's only source of funds has been from the sale of assets
released from its lenders' security interest and from optional
advances from its lenders. Debt to its secured lenders is now
approximately $7.4 million and Sunshine has no income from
operations.

Sunshine's employees have been reduced to six full-time and three
part-time persons, most of whom are involved in providing
security at the mine properties and administrative functions. It
is expected that the Company's employees will be reduced further
and that there may not be any full-time employees if it does not
obtain additional financing in the near future.

The Company was named a defendant in a purported class action in
Idaho against the Company, its mining subsidiary and other mining
companies in the Coeur d'Alene mining district in which the
plaintiffs seek to have the mining companies fund and administer
a blood level monitoring program for citizens in the Coeur
d'Alene basin and for damages for an alleged trespass to property
due to the depositing of minerals from mining operations into the
environment. The Company believes the suit to be without merit
and that the alleged claims were discharged by the Company's
bankruptcy effective February 5, 2001.

The Company expects to be able to continue in this severely
curtailed state only if its lenders continue to make optional
advances or if silver prices rise to such levels that other
financing alternatives would become available to the Company or
if its Argentina and Idaho properties are sold to a third party.

CONTACT:  Sunshine Mining and Refining Company, Dallas
          Mike Owens, 214/265-1377


TGS: S&P Cuts $176 Mln, $75 Mln IADB B loans
--------------------------------------------
Standard & Poor's lowered Friday its rating on TGS S.A.'s $176
million and $75 million IADB B loans to double-'C' from triple-
'C'-minus, following the downgrade of the local currency rating
of the underlying obligor for this transaction, the Argentine
utility, Transportadora de Gas del Sur S.A. (see list).

The downgrade of TGS's local currency rating follows the
governmental decree 293, dated February 12, 2002, which gives the
Ministry of Economy 30 days to create a commission responsible
for the renegotiation of concession contracts, and a total of 120
days for the renegotiation package to be presented to the
president, thus further increasing pressure on already weakened
public services companies' creditworthiness as already pointed
out by Standard & Poor's in the commentary article, "Argentina's
Renegotiation of Utilities Concession Contracts Means More
Delays, No Good News," published on Feb. 15, 2002.

In addition to this prolonged renegotiation period, there are
still many uncertainties regarding the terms of the renegotiation
of the concession contracts, including concerns about the tariff
setting mechanism, that is, inflation adjustment of tariffs, the
pass through of dollar-related costs, the quality of service, and
the tenure of the concessions. Standard & Poor's believes that
the current scenario involving frozen tariffs, the free flotation
of the peso, and a delayed renegotiation of the concession
contracts, in conjunction with a very depressed economic
environment that is affecting collections, will result in most
companies experiencing difficulties meeting the peso equivalent
amount of their financial obligations, since there are no
facilities available to finance working capital needs. If
companies cannot meet their financial obligations in a timely
manner, a massive renegotiation of debt terms and conditions
could occur, which in turn would translate into an increasing
level of defaults under Standard & Poor's criteria.

TGS's $176 million and $75 million IADB B loans benefit from
Inter American Development Bank's preferred creditor status
umbrella. The next payment for the transaction is due in May
2002, and the continued performance of the deal will depend on
TGS's ability and willingness to make the respective payment in
U.S. dollars.

    RATING LOWERED
    TGS S.A.                                    To          From
    $176 million and $75 million IADB B loans   CC          CCC-

CONTACTS:  STANDARD & POOR'S
           Jorge Solari, Buenos Aires, +54-114-891-2114
           Juan Pablo De Mollein, Buenos Aires, +54-114-891-2113
           Diane Audino, New York, +1-212-438-2388
           Lidia Polakovic, Buenos Aires, +54-114-891-2130
           Pablo Lutereau, Buenos Aires, +54-114-891-2125



=============
B E R M U D A
=============

GLOBAL CROSSING: SEC Includes Velocita In Growing Investigation
---------------------------------------------------------------
Velocita Corp. announced that it has received a third-party
subpoena from the United States Securities and Exchange
Commission seeking documents in connection with the SEC's
investigation of Global Crossing Ltd.

The company said in an official statement that it intends to
cooperate fully with the SEC's request for such documents.

About Velocita

Velocita Corp. ( http://www.velocita.com), based in the greater
Washington, D.C. area, is a nationwide broadband networks
provider serving communications carriers, Internet service
providers, and corporate and government customers. Founded in
1998 as a facilities-based provider of fiber optic communications
infrastructure, Velocita has agreements with AT&T to construct
approximately half of AT&T's nationwide next generation fiber
optic network of the future. These construction agreements with
AT&T serve as the foundation for Velocita, formerly known as
PF.Net, to grow and expand its own network, as well as add
service offerings. Cisco Systems, Inc. provides all the optical
and IP equipment to power Velocita's nationwide network. The
Velocita network, currently expected to be substantially
completed in 2002, will pass through 175 metropolitan areas
including 40 of the top 50 MSAs, as well as most tier two and
tier three markets.

CONTACT:  VELOCITA CORP.
          Janis Langley, Media-Industry Analyst
          +1-703-564-7277, janis.langley@velocita.com

          Maureen Crystal, Financial Analyst,
          +1-703-564-6414, maureen.crystal@velocita.com


GLOBAL CROSSING: Finkelstein, Thompson Files Class Action Suit
--------------------------------------------------------------
Finkelstein, Thompson & Loughran has filed a securities class
action law suit against directors and officers of Global
Crossing, Ltd. (NYSE: GX) in the United States District Court for
the District of Columbia, on behalf of all persons who acquired
Global Crossing common stock between January 2, 2001 and October
4, 2001, inclusive.

The complaint charges that certain officers and directors of
Global Crossing violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 by, among other
things: violating Generally Accepted Accounting Principles to
artificially inflate the Company's revenues and earnings and
issuing false and misleading statements regarding the Company's
past financial performance, the global market for bandwidth on
its fiber optic network and the Company's anticipated future
revenues.

The full extent of Global Crossing's cash flow crisis, and its
failure to compete in the market for customized communications
services, began to emerge on October 4, 2001 with a string of
stunning announcements. As a result of these announcements, the
price of Global Crossing stock plunged and the company is now in
bankruptcy.

Plaintiff seeks to recover damages on behalf of all investors who
purchased Global Crossing stock during the Class Period and who
suffered damages as a result, and is represented by the law firm
of Finkelstein, Thompson & Loughran, of Washington, D.C. For more
information contact Andrew J. Morganti or Donald J. Enright with
Finkelstein, Thompson & Loughran, toll-free at 866-592-1960, or
by e-mail at ajm@ftllaw.com or dje@ftllaw.com .


GLOBAL CROSSING: Shareholders Group Files Plan Bail Out Company
---------------------------------------------------------------
A group of Global Crossing Ltd. shareholders on Friday filed a
letter of intent and term sheet with the federal bankruptcy court
for an infusion of as much as $5.5 billion in new capital to
bring the Company out of bankruptcy. The proposed plan would
repay all creditors and honor all obligations to bondholders,
employees, ex-employees and retirees.

The filing objects both to the proposed investment by Hutchinson
Whampoa Limited and Singapore Technologies Telemedia Pte. Ltd.
and to Global Crossing's proposed procedures for consideration of
alternative investment proposals, noting that the process "fails
to address alternative conventional financing mechanisms which
are available to the shareholders."

The shareholders' group asked Judge Robert E. Gerber to determine
it a qualified investor, allowing it to participate in the
court's debtor's auction for the assets of Global Crossing. The
group proposes warrant offerings totaling as much as $5.5 billion
over three years to recapitalize the company and pay its debts.

After the proposed offerings, the existing shareholders would
continue to own at least 37.7% of the company, with the warrant
holders owning the remainder. Although the group would like to
work with most of the company's current management, it also
proposes to name eight members of a new 11-member Board of
Directors.

All Global Crossing shareholders are invited to join the
shareholders' group with no financial obligation to themselves
and no obligation to participate in any offering. The group's
filings and other information are available at
www.kabgroupllc.com, the Web site of the K.A.B. Group, L.L.C.,
itself a substantial Global Crossing shareholder and the advisor
to the shareholders in regard to the projected refinancing plan.

Kennon A. Brennen, the managing partner of the K.A.B. Group, said
that many Global Crossing shareholders consider the Hutchinson
Whampoa and Singapore Technologies Telemedia proposal to be worth
much less than the value of Global Crossing's assets. "We found
in chat rooms and discussion groups on the Internet a substantial
amount of interest among shareholders in an alternative plan that
would give the company's shareholders a continuing stake in its
future," he explained.

Mr. Brennen, an investment banker and, until recently, president
and chief executive officer of Phyto-Riker Pharmaceuticals, Ltd.,
added that the group represents thousands of shareholders and
millions of shares of Global Crossing stock. "Our goal is to have
one-third of the 30,000 shareholders join our group by the end of
March," he said. "We expect that shareholders and creditors alike
will find our proposal substantially superior in every way to the
only other proposal on the table. We believe the other proposal
greatly under-values the company's assets."

David E. Mersereau, an investment advisor in Connecticut, noted
that the plan allows the company to remain viable as the industry
awaits the end of the current imbalance between fiber-optic
capacity and demand. "With little additional capacity being added
and with demand growing at double-digit rates, it's just a matter
of time before Global Crossing's unique network is fully
utilized," he said. "As it is, it is the most valuable such
network in the world, and it would cost more than $10 billion to
duplicate it. The company just needs time. This plan gives it
that time."

Everett Hopkins, of Hopkins, Lawrence & Bailey, P.C., the filing
attorney, said, "We trust that any future filings in the case by
shareholders will likely be consolidated with today's filing,
making the shareholders advised by K.A.B. Group the lead
representatives of Global Crossing shareholders." He stressed
that the relief requested in today's filing is common in such
cases and that the company's proposed procedures for
consideration of alternative investment proposals are "unduly
onerous as applied to shareholders." He added that the K.A.B.
filing is totally different from, and not in contention with, the
numerous class-action lawsuits filed against Global Crossing.

Specifically, the shareholders' group proposes that the company
issue two classes of new warrants:

--  1 billion class "A" warrants priced at $1.00 and convertible
    into Global Crossing common shares 18 months from the date
    of issuance at a price of $2.00 per share, and

--  500 million class "B" warrants priced at $2.00 per share and
    convertible into Global Crossing common shares 36 months
    from the date of issuance at a price of $3.00 per share.

The warrants would be offered to the existing shareholders of
Global Crossing, including preferred shareholders, and to
bondholders, short-term debt holders and creditors who are
shareholders or who hold shares as security. It is expected that
the warrants would be listed on a stock exchange with the to-be-
relisted Global Crossing common stock.

The company would benefit from the proceeds of the warrant
offerings, which are expected to occur within six months, and
from the proceeds of the warrant conversions. If all of the
warrants are sold, Global Crossing would receive an infusion of
$2 billion this year, with an additional $2 billion at the first
conversion date if all of the class "A" warrants are converted
and $1.5 billion at the second conversion date if all of the
class "B" warrants are converted. Under the proposal, the company
would use the proceeds to fund its ongoing business.

CONTACT:  Stern & Co.
          Mark Perlgut, 212/888-0044, ext. 41
          mperlgut@sternco.com


GLOBAL CROSSING: Asian Buyers Reaffirm But Won't Sweeten Offer
--------------------------------------------------------------
Hong Kong-based ports-to-telecoms conglomerate Hutchison Whampoa
Ltd and Singapore government-owned Singapore Technologies
Telemedia Pte said that they are still interested in bidding for
Global Crossing.

However, in a Reuters report, they said they had no plans to
sweeten their offer despite an alternative proposal presented by
a group of shareholders.

"We are still prepared to invest in Global Crossing, provided
that all the terms we have laid out are met," ST Telemedia
spokeswoman Melina Tan said.

Hutchison Whampoa and ST Telemedia last month proposed to take
joint control of the bankrupt firm for a combined US$750 million.
Under that plan, Global Crossing's creditors will take a severe
haircut and existing shareholders would be left with nothing.

Global Crossing has said it is seeking higher bids for its
assets, which include a network linking 200 cities in 27
countries. The deadline for alternative proposals from investors
is April 23. 2002.


GLOBAL CROSSING: To Offer Employees Voluntary Separation Package
----------------------------------------------------------------
Global Crossing announced Friday a program that offers incentives
to employees based in the United States who voluntarily leave the
company's payroll as part of an overall expense reduction effort.
Employees who volunteer to leave and are accepted into the
program will receive a cash payment based on their salary grade
and length of service, as well as a period of continued benefits.

The company said the total number of people who leave under the
program would be determined by the needs of individual groups
within the company and the effect of other expense reduction
programs. Employees who are considered essential to the company's
operations will not be accepted into the program. The program is
also closed to certain other employees, such as those who have
already submitted resignations, who have already received
separation notices or who are contract employees.

Employees will be able to apply for the program between February
22 and February 27, 2002. Those accepted will be informed on
March 4 and March 5, 2002 and their last day of employment will
be March 8.

CONTACT:  GLOBAL CROSSING
          PRESS:
          John Schmidt, +1-973-410-8466,
          john.schmidt@globalcrossing.com

          Becky Yeamans, +1-973-410-5857,
          rebecca.yeamans@globalcrossing.com

          ANALYSTS/INVESTORS
          Ken Simril, +1-310-385-5200
          investors@globalcrossing.com


GLOBAL CROSSING: CSC Terminates $400M Outsourcing Deal
------------------------------------------------------
Computer Sciences Corporation (NYSE: CSC) announced Friday that
its information technology (IT) outsourcing agreement with Global
Crossing, which was announced on November 8, 2001, will terminate
effective March 1, 2002.

The $400 million contract, which had not yet been implemented, is
being terminated by mutual agreement following a determination
that the agreement no longer serves the interests of both
companies.

CONTACT:  COMPUTER SCIENCES CORPORATION (CSC)
          Mike Dickerson, Sr. Manager, Communications, Corporate
          +1-310-615-1601, mdickers@csc.com

          Bill Lackey, Director, Investor Relations, Corporate
          +1-310-615-1700, blackey3@csc.com


GLOBAL CROSSING: Chairman Resigns From Board of K1 Ventures
-----------------------------------------------------------
Gary Winnick, the chairman of troubled U.S.-based Global Crossing
Ltd., has resigned from the board of Singapore's K1 Ventures, but
didn't give any reason behind his move, reports the Associated
Press. K1 is the venture capital arm of Singapore government-
linked Keppel Corp.

Winnick's resignation came after the New York Times released a
report suggesting that the executive had arranged a side deal
last autumn with K1 Ventures, a Singapore investment firm that
has ties to the Asian alliance now trying to buy Global Crossing
out of bankruptcy.

According to the report, the deal, which also involved another
director of the financially troubled company, Steven J. Green,
was conducted without the board being officially informed and was
not disclosed to creditors or shareholders last month when a
US$750-million offer for Global Crossing's assets was made by ST
Telemedia and Hutchison Whampoa.

However, K1 Ventures has denied any involvement in the proposed
bid by ST Telemedia and Hutchinson Whampoa to acquire Global
Crossing, adding it doesn't have any intention to acquire the
same.

It also clarified that Temasek Holdings, which owns a stake in ST
Telemedia through Singapore Technologies Pte Ltd, has no direct
interest in K1 Ventures and its deemed interest is derived
principally from Temasek's stake in Keppel Corp.

"K1 Ventures operates independently and as a separate company
from Temasek and its group of companies," it said.

Global Crossing, a global fiber-optics network giant with listed
assets of US$22.4 billion, filed for Chapter 11 bankruptcy
protection last month.



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


CESP: Shares Up Interest Rate Cut
---------------------------------
Cia. Energetica de Sao Paulo (Cesp), Brazil's third- biggest
power generator, saw its shares climb on optimism lower interest
rates will reduce financing costs for utilities and phone
companies, says Bloomberg.

Cesp, which has approximately US$4 billion (BRL8 billion) in
debt, of which 80 percent is dollar-denominated, rose 2.3 percent
to BRL15.50.

According to Geoffrey Dennis, head of Latin America equity
strategies with Salomon Smith Barney in New York, utilities would
gain after the surprise interest rate cut in Brazil. Companies in
the industry have a lot of debt, so they would benefit from lower
interest rates, and they are the easiest stocks to buy when
investors are more optimistic about the country, he said.

CESP is 53-percent owned (74 percent voting shares) by the state
of Sao Paulo and its state-owned companies. After several
attempts to privatize CESP failed, the decision to sell the
Company was put on hold indefinitely due to the current energy
crisis in Brazil.


EMBRAER: Blames Slower Recovery on US Attacks, Sector Weakness
--------------------------------------------------------------
Brazilian aircraft maker Empresa Brasileira de Aeronautica SA
(Embraer) said it would deliver 145 aircraft in 2003, an increase
of 10 from this year's forecast of delivering 135 aircraft.

The 7.4 percent increase in the deliveries for next year from
this year shows Embraer is recovering more slowly than expected
from the effect of the U.S. attacks on its sales, said Carl
Weaver, an analyst at Bear Stearns do Brasil, who rates the stock
"neutral."

He declined to say what figure he had expected but said it was
significantly higher.

"This is an implicit recognition by management that the recovery
is going to be slower than expected," said Weaver.

Embraer President Mauricio Botelho said in September that the
Company would fire 1,800 workers, or 14 percent of its employees,
after airlines delayed orders worth US$1.9 billion for its
regional jets.

He added that Embraer would deliver 135 jets in 2002, down from a
previous estimate of 205. Embraer last year delivered 161 jets,
the company said in a statement.

"A conservative stance is still the most appropriate for the
present circumstances," said Botelho. "A pragmatic vision is the
best way to keep our company on the right track," he added.

Embraer had a backlog of firm orders worth US$10.7 billion and
US$12.6 billion in options on December 31, 2001.

CONTACTS:  EMBRAER
           Bob Sharp, Press office mgr.
           bob.sharp@embraer.com.br
                  OR
           Wagner Gonzalez, Press officer
           wagner.gonzalez@embraer.com.br
           Phone +55 12 3945 1311
           Fax + 55 12 3945 2411


TRANSBRASIL: Finance Ministry Freezes Assets On Unpaid Debt
-----------------------------------------------------------
Brazil's Finance Ministry has decided to freeze the assets of the
grounded carrier Transbrasil Airlines SA, in a move that will
drive the airline to bankruptcy, reports the Associated Press.

The ministry made the decision as part of an attempt to recover
the BRL342 million (US$141.3 million) it is owed by the country's
fourth-largest carrier.

Transbrasil was grounded December 3, when its fuel suppliers
refused to extend further credit to cover its bills.

Since 1999, Transbrasil has posted losses of BRL365.5 million
(US$151 million). The airline has a debt of more than BRL1
billion (US$413 million).

The country's fourth-largest carrier was grounded Dec. 3, when
its fuel suppliers refused to extend further credit to cover its
bills. Since 1999, Transbrasil has posted losses of 365.5 million
reals (dlrs 151 million). The airline has a debt of more than 1
billion reals (dlrs 413 million).

CONTACT:  Antonio Celso Cipriani, CFO
          Rua Geral Pantaleao Telles, No. 4,
          Jardim Aeroporto
          04355-040 Sao Paulo, Brazil
          Phone: +55-11-533-7111
          Fax: +55-11-543-9083



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

GRUPO ALFA: Shares Up On Expectation Of Recovery, Debt Rollover
---------------------------------------------------------------
Shares of Alfa SA, a Mexican industrial group with subsidiaries
in auto parts, mining and petrochemicals, may rise after Jorge
Beristain, an analyst at Deutsche Bank, raised the company to
"buy" from "market perform" on optimism that the company has
survived the worst, relates Bloomberg.

Alfa avoided a bankruptcy at its steel making subsidiary Hylsamex
SA and is poised to benefit from a U.S. economic recovery,
Beristain said in his report. Hylsamex SA is said to be in
negotiations with banks at present to roll over short-term debt
and may be forced to sell off assets or take in an outside
investor.

"In simple terms we believe Alfa is through the looking glass in
terms of perception and results," the analyst said.

Alfa's shares rose MXN0.32, or 2.3 percent, to MXN14.25.

CONTACT:  Dionisio Garza Medina, CEO
          Raul Gonzalez Casas, Investor Relations
          TEL. 52 8748-1177  FAX. 52 8748-2544
          rgonzale@alfa.com.mx


GRUPO VITRO: Selling Remaining Joint Venture Stake To Whirlpool
---------------------------------------------------------------
Vitro, S.A. de C.V. (NYSE: VTO and BMV: VITRO A) announced Monday
that it has reached an agreement in principle with Whirlpool
Corporation, to sell its majority stake in Vitromatic, S.A. de
C.V., an appliance manufacturing and distribution company located
in Mexico.

Vitro intends to sell its controlling 51% interest to Whirlpool,
which currently holds the remaining 49 % interest.

The transaction, which is subject to regulatory and shareholders'
approvals (in the case of Vitro), is expected to be completed
during the second quarter of this year. Terms of the transaction
were not disclosed.

Federico Sada, Vitro's Chief Executive Officer, indicated that
"after working together since 1987 to build a successful
appliance business in Mexico, with significant exports to other
countries in Latin America, Vitro has decided to sell its 51 %
interest to Whirlpool, to continue to concentrate in Vitro's core
businesses."

Mr. Sada added that "Vitro will continue to focus its resources
and energy to maintaining and developing its glass-oriented
businesses throughout the world. Vitro will use the resources
obtained from this transaction, to strengthen its financial
position and operations."

Vitromatic's sales exceeded $600 million dollars last year.
Vitromatic is headquartered in Monterrey, Mexico, has five
production facilities and employs 6,000 people. The joint venture
manufactures ranges, refrigerators and laundry equipment for the
domestic and export markets under the Acros, Supermatic, Crolls
and Whirlpool brand names.

Vitro, S.A. de C.V., through its subsidiary companies, is a major
participant in four distinct businesses: flat glass, glass
containers, glassware and household products. Vitro's
subsidiaries serve multiple product markets, including
construction and automotive glass, wine, liquor, cosmetics,
pharmaceutical, food and beverage glass containers, fiberglass,
plastic and aluminum containers, glassware for commercial,
industrial and consumer uses, and household appliances. Founded
in 1909, Monterrey, Mexico-based Vitro has joint ventures with 10
major world-class manufacturers that provide its subsidiaries
with access to international markets, distribution channels and
state-of-the-art technology. Vitro's subsidiaries do business
throughout the Americas, with facilities and distribution centers
in seven countries, and export products to more than 70
countries. Vitro's website can be found at: http://www.vto.com

CONTACTS:  VITRO, S. A. DE C.V.
           Media:
           Albert Chico Smith, 011 (52) 8863-1335
           achico@vto.com

           Financial Community:
           Beatriz Martinez, 011 (52) 8863-1258
           bemartinez@vto.com

           BREAKSTONE & RUTH INT.
           U.S. Contacts:
           Luca Biondolillo/Susan Borinelli
           (646) 536-7012 / 7018
           Lbiondolillo@breakstoneruth.com
           Sborinelli@breakstoneruth.com



MEXLUB: Reiterates Decision To End Contract With Impulsora
-----------------------------------------------------------
Officials of Petr¢leos Mexicanos (Pemex) have responded to the
lawsuit brought by Impulsora Jalisciense, which operates MexLub
(Mexicana de Lubricantes), saying they will uphold their decision
to end the contract with Mexlub.

Pemex officials have deemed Impulsora's financial structure as
"weak and poor." According to them, in eight years of operations,
MexLub lost MXN595 million (US$65.4 million), and today the
Company's liabilities outweigh its capital.

Pemex's move to cut ties with Impulsora will open the competitive
field in the oil and lubricants market in Mexican service
stations.

However, a federal court ruling on Wednesday banned Pemex to
change its franchise contracts with service stations, nor end the
exclusivity agreement with Mexlub in its service station
franchises.

CONTACT:  Octavio S nchez Mejorada, Manager
          Av. 8 de Julio N  2270, Z.I.
          Guadalajara, Jal. 44940
          Phone: 31-34-05-00
          Fax: 31-34-05-00
          E-mail: export@mexlub.com.mx
          URL: http://www.mexlub.com.mx




               ***********


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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